Unemployment among teenagers is sitting close to 24%. It's easy to shrug this off, since most teens live with their families and their lack of income isn't likely resulting in some great wave of human suffering. Still, it has long term repercussions; the kids who don't wind up working in their teens go into the work force as adults with significant disadvantages. They haven't learned such basic work skills as showing up on time and how to conduct themselves among work peers.
Getting a quarter of our future work force off to a stumbling start is a pretty sure guarantee of problems down the line. I think it may be time to think about killing one of the sacred cows of the social safety net: The minimum wage.
First of all, as a libertarian, I accept the notion that there shouldn't be a minimum wage, period. I understand the impulse behind it, but is there any actual evidence that minimum wage laws raise people out of poverty? For years, people have warned that raising the minimum wage would raise unemployment. Usually, it hasn't, because the real world wage of most workers was well above the minimum anyway. And, up until 2008, the debt economy had enough people spending money they hadn't earned on stuff they didn't need that employers sometimes had to hire anyone with a pulse, which is frequently the sole job skill a teenager possesses.
Politically, we could probably never roll back the minimum wage for everyone. We'd get every local TV news show in the nation out talking to forty year old single mothers of eight kids earning minimum wage and the outrage ginned up would scare off even Rand Paul. But, what about a different minimum wage for people under 21? If you aren't old enough to buy beer, then you don't need to be paid enough to get drunk. Either repeal the minimum entirely before age 21, or maybe set it to half the adult minimum wage.
I'm sure I sound heartless proposing this. But I've mainly been thinking about this problem because I know a few unemployed teenagers, and would like to see them catch a break. This seems like a possible path to make them attractive to employers again.
"[T]he kids who don't wind up working in their teens go into the work force as adults with significant disadvantages. They haven't learned such basic work skills as showing up on time and how to conduct themselves among work peers."
ReplyDeleteSorry, James, but I don't buy this. I think you're overstating the problem. You mean to tell me that school doesn't teach a teenager how to be on time, how to meet deadlines, how to get along with peers, etc.?
I had a job for about a month as a sophomore (long story). That was my only formal employment during high school. Yet somehow, when entered the work force for good in college, I managed.
James,
ReplyDeleteI've been (slowly) reading Thomas Sowell's Basic Economics, and he provides a devestating critique of minimum wages. Really worth a read.
P.S. I do not speak as an unbiased party. My dad employed my for three years below minimum wage. Sounds cruel, but I wouldn't have had any pocket money without it, and I was worth at the time what the government told him to pay me.
Watermaster, I'm not all that worried about kids who can get into college. I'm worried about kids who are less motivated and accomplished. Some people may simply say, "Screw 'em if they are too lazy to make something of themselves." I'd like to see them have a chance.
ReplyDeleteThe fact is that a lot of low-skill, low brain-power jobs have been eliminated because it's gotten cheaper to automate or just shift the work back onto the consumer. Shoppers now routinely ring themselves out, bag their own groceries, and carry them to the car. $7 an hour is too much to pay for a kid to cart groceries out to cars. But what if you could pay that kid $3 an hour, plus tips? I just don't see the downside.
Loren, I don't think it's cruel for your dad to have you work for less than minimum wage. For centuries, it was common practice for kids to work alongside their parents to learn job skills. In the name of protecting children from being exploited, a worthy goal, we've also hobbled the early bloomers who might actually want to make a few bucks washing dishes when they are 12.
For the record, I wasn't one of these early bloomers. I had jobs forced on me occassionally in my teens, but it wasn't until I was a junior in college that I actually went and found a job on my own. Looking back at my teenage years, I really can't even imagine what I did with all my spare time. A 4 hour shift bussing tables just felt like eternity.
James,
ReplyDeleteI can offer you the minimum wage principle of Germany. "Every one working a 40-hour job should earn enough money to get by".
Keep in mind that the higher the taxes, the higher the pay, which has been proven over and over again. The German worker makes the BMW's at an hourly wage of $20-40/hour and they do not enough workers.
No, I do not find the libertarian views practical, but I would prefer to discuss it with you at an appropriate time.
Jack van Dijk
Thanks for writing, Jack. I'm curious about this statement:
ReplyDelete"Keep in mind that the higher the taxes, the higher the pay, which has been proven over and over again." Are you saying that nations that have high tax rates have higher average incomes that nations with low tax rates? I'm also curious about the causality. I'll accept that you find high taxes and high wages together frequently, but I wonder if the high taxes cause the high incomes or if high incomes support higher taxes.
Strictly on data from the United States, I think it's true that some of the states with high tax rates have high average salaries. But, census data also shows a pretty strong trend of people moving away from high tax states to low tax states. Texas and Florida are gaining population while New York and California are losing population, for instance.
Cost of living also has to be taken into account. In New York, I'd be a pauper at my current income. In North Carolina, I'm hardly affluent, but I'm certainly comfortable. Since writers get paid the same no matter where they live, doesn't it make sense to live in areas with a reasonable balance of taxes and services? Living in New York wouldn't magically cause my publishers to pay me more per book.
Of course, I don't want to move to a place with no government services or taxes. In theory, I could move to Haiti and instantly be one of the richest men on the island with no income other than my novel sales. But I want some level of government, like a police force, water and sewage systems, and a post office. I'm a libertarian, not an anarchist.