Minimum Wage Has Cost

Posted on July 03, 2010

Teens are having a tough time finding a job this summer (“Competition fierce as fewer teen jobs added this summer,” BusinessRockford.com, June 20), and one often overlooked reason are wage mandates that create a barrier between teens who want to work and employers who want to hire.

Between July 2007 and July 2009, Congress increased the federal minimum wage 40 percent. Research from Ball State University attributes the loss of 310,000 teenage part-time jobs to this wage hike. Illinois mandates a wage rate even higher than the federal level and is scheduled to increase its minimum wage again this July.

Minimum wages raise the cost of hiring and training entry-level employees like teens. As consumers continue to demand low prices, employers respond by cutting staff hours or positions and are forced to turn to more cost-effective alternatives like automation and self-service.

These unemployed teens are deprived of the valuable invisible curriculum that comes from reporting to a supervisor, showing up on time, and working as part of a team. Northeastern University research shows teens without job opportunities — especially economically disadvantaged teens — are also more likely to drop out of high school or get tangled up in the criminal justice system.

Michael Saltsman, research fellow
Employment Policies Institute, Washington, D.C.