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.