The quantitative masterminds at the Wall Street Journal editorial board are at it again.

Back in 2007, I showed how they cooked up a bogus graphic purporting to demonstrate that “Lower corporate tax rates with fewer loopholes can lead to more, not less, tax revenue from business”:

Today, the Journal denounces the 2007 law that has increased the minimum wage over the last three years, writing, “Rarely has a law hurt more vulnerable people more quickly.” To support this claim, it provides the following analysis:

The nearby chart compares the three-stage increase in the minimum wage with the jobless rate for teens age 16 to 19 since 2007. The first increase, to $5.85 from $5.15, came after a decade of no increases and when the overall jobless rate was below 5% and the teen rate was 14.9%. The demand for labor was sufficiently strong in many areas that most employers were probably willing to absorb the higher wage.

But as the minimum wage increased even as the overall job market began to worsen, the damage to teen job seekers became more severe. By the time the third increase to $7.25 from $6.55 took effect in July 2009, the teen jobless rate was 24.3%, and by October it peaked at 27.6% before dropping to 26.4% in January.

The story is even worse for black teens, who often have lower than average education levels or live in areas with fewer job prospects. Their jobless rate climbed from 38.5% before the third wage hike to 49.8% in November 2009, before falling back to 43.8% in January. For black male teens, the rate climbed to 52.2% in December from 39.2% in July. The difference between the jobless rates for black teens and the entire population widened by six percentage points from June 2007 to January 2010. Even assuming those rates fall as the job market improves this year, they will remain destructively high.

While it’s certainly plausible that the increases in the minimum wage over the last three years have worsened teen unemployment, correlation doesn’t prove causation. Any variable that trended in one direction during the current economic downturn will be correlated with the unemployment rate among teens or any other group.

More importantly, unemployment is rising across the board, which cuts against the WSJ’s hypothesis that the minimum wage is having a particularly devastating effect on teens. To illustrate the point, here is a replication of the Journal’s graphic with a line added to indicate the general unemployment rate (i.e. among everyone 16 and over) — the lines are essentially parallel (correlations of .86-.97):

In fact, the seemingly dramatic increases in the unemployment rate among teens and black teens noted by the Journal (while disturbing) are actually smaller relative to the initial rates in those groups than among adults generally. To see this more clearly, I’ve plotted the data as a proportion of the unemployment rate in January 2007:

Finally, the sample size is very small, but a preliminary examination shows no obvious statistical evidence of a relationship between the minimum wage and the teen or black teen unemployment rates once we account for the upward trend in joblessness.

In short, the Journal could be right, but we can’t tell from their analysis, which is below Econ 101 standards. It will take a far more systematic examination of the data to know what effect the minimum wage increases have had.

Update 3/5 2:42 PM: TNR’s Jon Chait links with amusing comments.