Minimum wage hikes are killing teens’ summer jobs
Author: Jill Jenkins
Publication Date: August 2007
Topics: Minimum Wage
Summer’s almost over. And for too many teens this year the answer to “What did you do over summer vacation?” will not be, “I had a job.”
Manhattan’s teen employment rate is less than 17 percent – that’s the lowest among major American cities. And between 2005 and 2006 the number of New York State teens classified as “unemployed” – those who are actively seeking a job but can’t get one – jumped by almost 6 percent to 19.5 percent.
Nationally, the percentage of unemployed teens recently increased to 3 1/2 times the overall unemployment rate, 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, including a 6 percent boost in New York?
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.
New York’s Summer Youth Employment Program, which pairs job-hungry students with local businesses, recently reported that this year it found employment for 20 percent fewer people than it did eight years ago. A major cause of the decline is “the higher state minimum wage [which] added to the challenge of funding SYEP by increasing the cost per participant,” according to David Jason Fischer, an analyst at the Center for an Urban Future.
It’s a similar story for Michigan’s Goodwill Industries, which has been hiring students from low-income families for training-oriented employment for more than 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.
Jack Holland owns a Dairy Queen in Erie, Pa. He recently told the local Times-News that the state’s minimum wage had forced him to cut down his summer staff by a fifth because that’s “all I can afford.”
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 fill in for full-time employees taking vacations or 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 commonsense observations. Just for starters: Research from Cornell University, the University of Connecticut and the University of Georgia 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 year in 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. This past June he wrote that the summer job market for low-income teens is “beyond bleak.”
Jared Bernstein, an economist at the Economic Policy Institute, also vocally supported the federal hike. Then recently, in a mind-boggling bit of doublethink, he told The Wall Street Journal that declining teen employment can’t be explained by “diminished opportunities.”
Herbert and Bernstein don’t realize they’re the ones prescribing the poison pill causing the disease.
It’s important to remember that a summer job for a teen is much more than a paycheck: It’s a chance to get some skills and, just as crucial, 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.