Commentary: Minimum wage harms young job seekers

by Shayne SpenceShayne Rotator

The “living wage” movement is back, folks, and it has some serious support.  Low-wage workers in NYC, Chicago, Milwaukee, and Detroit, among others, started a strike in late July calling for an increase in the minimum wage to at least $15/hour, from $7.25 currently. Proponents of the increase cite a lack of economic mobility and increasing cost of living as reasons to raise the wages.  In his 2013 State of the Union address, President Obama said “This single step would raise the incomes of millions of working families.”  The Washington, D.C. city council recently passed a measure that would have required Wal-Mart to pay its employees $12.50/hour, a higher rate than most city employees receive. What all of these initiatives ignore are the millions who will be forced out of the job market by these policies.

The real minimum wage is not set by the government.  The real minimum wage is $0, because that’s what you get when it is not worth it to hire you.

First, let me explain something about wages that is often forgotten by those fighting for the “living wage”; employers pay what employees are worth.  As a 15 year old working my first job at the local McDonald’s, I didn’t have any work experience, and all I was allowed to do by law was take the orders.  Yet McDonald’s was required by law to pay me the same amount as someone who could do anything in the store.  My labor was obviously less valuable than an older employee’s labor, but I was compensated the same.  Luckily I got the job, but think of how many other young people applied for that job and were turned away, because it simply was not worth it for the company to hire them?

Minimum wage laws effectively remove the lowest rungs on the economic ladder.  Many young people are not as lucky as I was in getting and keeping jobs through high school and college.  With the increasing costs of hiring new people, compounded by an increasing tax burden and uncertain economic future (not to mention mandates in ObamaCare), many businesses are simply deciding it isn’t worth it to hire new people.  This disproportionately affects the youth, the poor, and the uneducated, as these are the people with the least to offer a potential employer.  Low-wage, low-skill jobs provide vital job experience and training people need; discipline, punctuality, and a strong work ethic.  Working at McDonald’s taught me more of that in six months than I had ever learned in years of school.

Some discount that job experience as unimportant; after all, isn’t McDonald’s just flipping burgers?  Easy, right?  Anyone who has worked in fast food, or in the service industry in general, knows it is not easy.  The conditions are never great, there are always those few hostile coworkers who hide in the bathroom instead of helping clean up the Shamrock Shake a child just barfed up, and don’t even get me started on the customers that can detect traces of unwanted pickle with the efficiency of a shark sniffing out blood.  But the amount that can be learned about working from these jobs is significant.  Teenagers learn to keep a schedule, arrive on time, clean-shaven and neatly dressed, and work in a high-paced, high-pressure environment.  Having participated in a few group interviews in my life, I know that is experience that many in my generation lack and minimum wage laws simply prevent more young people from getting.

While some may say my wages at McDonald’s were too low, I was also being compensated with invaluable experience, which cannot be measured in dollars and cents.  The experience I gained at McDonald’s opened the door to my getting jobs that pay better than minimum wage.  By the end of my three years at McDonald’s, I rose to the position of Crew Leader.  As Crew Leader I gained valuable interpersonal skills, in finding the best way of interacting with crew I was managing.  I also learned how to effectively delegate responsibilities, which I then put to use in an even better job as Field Director on a political campaign.  While some may say my wages at McDonald’s were too low, I was also being compensated with invaluable experience, which cannot be measured in dollars and cents.

By increasing the minimum wage government would simply be adding another barrier to entry to young people.  We are already severely underemployed, with youth unemployment topping 16%.  We’ve been sold high-priced education and accrued over $1 trillion in student loan debt doing it, but yet many of us still can’t find jobs.  By removing another rung from the ladder, we would exclude millions of young people who need to work to pay for college, people who want to start their lives, and people who are just trying to put food on the table.  While based on a noble sentiment, the “living wage” would drive more young people out of the job market at a time when we need more job opportunities, not less.  I think it’s about time the folks in Washington thought of us.

{ 4 comments… read them below or add one }

John McClaughry September 2, 2013 at 11:45 am

It’s unusual for a young person to be perceptive enough to figure this out. I hope the message spreads. Minimum wage is a job killer.

Reply

laurel laframboise September 2, 2013 at 2:20 pm

In my “ideal” US Constitutional Amendment (see my website) I included the right of an employee to a living wage, the right of an employer to a maximum wage, and the right of those who can’t work to minimum living conditions.

It was economics founder David Ricardo who in the early 1800s realized that it was the responsibility of the employer to pay at least the cost of a laborer’s minimum living expenses and one dependent (their replacement). If they don’t, SOMEONE is going to have to pick up the tab for the working poor–in our country, that’s our government.

In my amendment I stated that dependents (of employees or government) could work for less than living wage. They need only show proof of their dependent status and then the market would set the wage they receive. Since each employee includes 1 dependent, and since poor disabled/aged are dependents of government, there will be plenty of low wage earners for the service industry to choose from.

In my amendment the minimum living wage is calculated using local costs and includes food, shelter, commute, dependent care, healthcare (with a lifetime cap) and, if the job requires it, higher education costs. It is adjusted annually and automatically by every employer using local government statistics on cost of living, with methodology standardized by the federal government. By requiring the employer to pay the full cost of labor the government shall not be involved (precluded by the amendment) in food/fuel assistance, daycare assistance, tax rebates to low income renters/property owners, subsidized public transport, and most importantly, meddling in health care delivery.

We’ve got to find common ground with those who feel strongly about social justice and environmental protection. We’ve got to stop using broad terms to define our belief systems. I consider myself a fiscal conservative, a social moderate, and an environmental liberal. I created my “ideal” amendment in the belief that most Americans feel similarly trapped by broadly stated ideologies, and can find common ground when we consider specific solutions to our country’s problems and vote for those solutions rather than for vague ideologies.

Shane, don’t get trapped in “conservative” ideology. Use your noggin to figure out solutions to our problems Americans of all stripes can agree make sense. Then push those solutions rather than constantly haranguing “liberal” solutions.

Reply

Rob September 4, 2013 at 12:22 am

Laurel, where is the employer supposed to get the money to pay this living wage? You seem to think that companies have an infinite store of funds, and they pay low wages to people for the fun of it. In order for McDonalds to pay their employees anything, McDonalds has to sell hamburgers. An employee cannot be paid more than the amount earned by selling hamburgers. If the employee is netting $10 an hour for the company, the company can’t pay that employee $15 an hour. At least, not for very long. To say that government should mandate that companies pay a living wage is as foolish a proposition as saying that government should pass a law mandating that the working poor should just stretch their salaries to cover their needed expenses. In both cases, you are pretending resources are there when they are not. The key to lifting people out of poverty is economic growth. Shayne is on the right track.

Reply

Doug Richmond, Underhill April 10, 2014 at 7:36 pm

Shayne sez, “While some may say my wages at McDonald’s were too low, I was also being compensated with invaluable experience, which cannot be measured in dollars and cents” and “Working at McDonald’s taught me more of that in six months than I had ever learned in years of school.”
From my mouth also. I tell most baggers at the grocery that I learned more from the Grand Union, tough boss, and Ehler’s Sunoco, nice boss, MORE than I learned from the Univ. of Vacant Minds. Without those first rungs on the ladder, I would have been hard pressed to go for a ‘real job’. From those jobs I ended up at $3.25 an hour, with 1 weeks paid vacation, my University paid for! Then $87 a month for 80 hour a week working for the US Army. Go figure!!

Reply

Leave a Comment

{ 2 trackbacks }

Previous post:

Next post:

About Us

The Ethan Allen Institute is Vermont’s free-market public policy research and education organization. Founded in 1993, we are one of fifty-plus similar but independent state-level, public policy organizations around the country which exchange ideas and information through the State Policy Network.
Read more...

Latest News

Second Homeowners Testify Condos’ Office Okayed Voting In Vermont

by Rob Roper The case surrounding voter irregularity in Victory, Vermont, currently in the Essex superior court, involves a number of people who do not live in the...

“Clean Energy” vs. Renewable Energy Jobs

by Guy Page The solar power industry in Vermont employs about 1,680 Full Time Equivalent (FTE) workers, based on calculations derived from statistics in a 2017 report. The...

Another Carbon Tax Proposal!

by Rob Roper The Carbon Tax really is the zombie, body snatcher legislation that will not die. The past couple of months have seen a massive ramping up...

CON Laws Hurt The Most Vulnerable

by David Flemming Brookside Health and Rehabilitation Center, a nursing home in White River Junction is set to close, leaving 33 seniors in the lurch. The nursing home’s...

The Communism Centennial

by John McClaughry A hundred years ago last week armed Bolsheviks seized the Winter Palace in Petrograd—now St. Petersburg—and arrested ministers of Russia’s provisional government. The world’s first...

Video