Minimium wage hike dims teens’ chances

Original Article:

  • Author: Jill Jenkins

  • Publication Date: August 2007

  • Newspaper: The San Diego Union-Tribune

  • Topics: Minimum Wage

School’s out for the summer. And it’s harder than ever to find a job if you’re a teen.

The Center for Labor Market Studies at Northeastern University estimates that this summer about 64 percent of 16-19 year-olds won’t have a job. That matches the worst rate recorded in the last 57 years.

And the percentage of teens classified as “unemployed” – those who are actively seeking a job but can’t get one – recently increased to three-and-a-half times the national unemployment rate, and the highest it’s been in nine months.

Is it just a coincidence that over that same nine-month period there were 16 state-level minimum wage hikes? Economic research has shown time and again that increasing the minimum wage destroys jobs for low-skilled workers while doing little to address poverty. And testimony from employers across the country confirms that it wreaks havoc on the summer job market.

Michigan’s Goodwill Industries has been hiring students from low-income families for training-oriented employment for over a decade. The Detroit News reports that Goodwill reduced its number of summer employees by 50 percent in anticipation of the July 1 increase in the state’s minimum wage. According to one of its directors, “We took July into consideration when deciding how many kids to hire this year – It’s tragic to me.”

Jack Holland owns a Dairy Queen in Erie, Pa. He recently told the local Times-News that the state’s minimum wage has forced him to cut down his summer staff by a fifth because that’s “all I can afford.”

Scott Zana runs three Arby’s restaurants in Grand Island, Nebraska. According to The Omaha World-Herald, Zana “can’t absorb” the recent hike in the federal minimum wage, and expects that “high school kids working for spending money and young adults trying to get through college” will be the first to get fired.

You don’t need a business degree to understand why employers are making these cuts.

The classic summer jobs – cashier, restaurant waiter, grocery clerk – can help an employer with increased service or make up full-time employees’ vacations and sick leave.

When the minimum wage gets boosted, however, employers hold off on hiring teens to fill those slots. Most of the work still gets done. But customers may get stuck standing in longer lines. And teens lose out because they’re stuck at home watching reruns of the “Price is Right.”

What’s more, low-skilled positions have high turnover rates, so employers spend unusually large amounts of time and money training new people to fill them. The higher minimum wage makes that training more expensive. For many employers, it’s no longer worth it to keep hiring.

Economic data confirm these common-sense observations. Just for starters: Research from the University of Georgia, the University of Connecticut and Cornell University indicates that increasing the minimum wage causes four times more job loss for employees without a high school diploma than it does for the general population.

Ironically – no, incredibly – some of the most influential players in the debate over the declining teen job market are actually advocates for the job-killing minimum wage.

Last June, New York Times columnist Bob Herbert wrote that the federal government would be “condemning the nation’s lowest-paid workers to this continuing slide into ever deeper economic distress” if it didn’t increase the minimum wage. Now, a year later, he’s writing in the Times that the summer job market for low-income teens is “beyond bleak.” Hello? Anybody home?

Jared Bernstein, an economist at the Economic Policy Institute, also vocally supported the federal hike. In a mind-boggling bit of double think, he recently told The Wall Street Journal that declining teen employment can’t be explained by “diminished opportunities.”

Herbert’s and Bernstein’s diagnoses are correct, even if they don’t realize they’re the ones prescribing the poison pill causing the disease.

So here’s an important thing to remember: A summer job for a teen is much more than a paycheck: It’s a chance to get some skills and – just as important – to learn what it’s like to be employed.

There’s an invisible curriculum of learned skills (punctuality, answering to a boss, getting along with people who aren’t friends, following through on deadlines) that can’t be learned in the classroom. But Herbert, Bernstein, and the rest of the minimum wage advocates see dollars as the only metric for success. And in their crusade to sweeten the pot, they’re killing off valuable job opportunities.

Here’s hoping they connect the dots and stop burying teenage workers with good intentions.