Raising the minimum wage has an impact, especially on our youngest workers, writes columnist Richard S. Davis.
Dead-end jobs get a bum rap. They provide young and inexperienced workers the skills — and sometimes the motivation — required to get ahead. As a state legislator said during a welfare-reform hearing in the ’90s, “Everyone’s first job is a dead-end job.” You start there, then you move on.
According to McDonald’s, about one in eight Americans has worked under the Golden Arches. I put in my time my senior year in high school, back when the company measured burgers sold in the millions.
The franchise was owned by a rarely seen woman we called “The Whip.” Her son-in-law dropped in periodically to check on things, generally at the end of the late shift. He’d put on a pair of white gloves and ostentatiously check the grill and fry bin, invariably finding them unsatisfactory. The manager we saw most often was a young Marine back from active duty. We liked him and thought he might be on the corporate track.
My crew was made up entirely of high-school boys — it was a different time. We learned important lessons. Communicate clearly and professionally with co-workers and customers. Get to work on time. Don’t bring personal hassles to the workplace. Work together as a team. Follow orders. Get along with people whether you like them or not.
Today, teens have a hard time developing those workplace skills. The Brookings Institution reports that for teens aged 16 to 19, the employment rate in the 100 largest metropolitan areas in the country “plummeted from 45 percent in 2000 to 26 percent in 2011.” It’s tougher here: Seattle had the 86th biggest drop, falling from 46 percent to 25 percent in 2012, according to updated metro data from the Brookings website. That seemingly small shift in percentage points is significant.
Washington’s teen unemployment rate has been consistently high. Preliminary 2014 data show that teens aged 16 to 19 have an unemployment rate of 23.2 percent, compared with a U.S. rate of 19.6 percent. When you take out the teenagers, we’re right at the national average of 5.7 percent. Given the abundant research showing the minimum wage impacts young and inexperienced workers most directly, it would be silly to disregard it as a cause.
The Brookings analysts point out that, for young people, employment should complement education. It doesn’t have to be one or the other. They note, “Teen employment is associated with improved employment and earning outcomes later in life.”
Reducing opportunities for teens to gain valuable work experience, then, has lasting negative consequences.
The $15 minimum wage in Seattle will probably further depress teen employment. I know this has been a strange couple of weeks here for considering the effects of the minimum wage, particularly on the restaurant industry. First we heard that restaurants were closing because of the prospective wage hike — though it doesn’t begin to phase in until next month. Then, we discovered that the reports of the industry’s death had been, to paraphrase Mark Twain, an exaggeration. That’s a different story.
Seattle restaurateurs will adapt. As Washington Restaurant Association President Anthony Anton told The Seattle Times, “There’s going to be restaurants in Seattle. It’s just going to be different, and that’s OK.”
One difference is that there will be fewer jobs for teens. I doubt we’ll see either significant layoffs or restaurant closures, particularly in this affluent area. Adaptations will manifest differently: price hikes, increased use of technology (place your order by tablet), menu changes, and so on.
Economists Jonathan Meer and Jeremy West have done convincing research indicating that increases in the minimum wage influence employment primarily by slowing growth in hiring. That’s most likely what we’ll see here. I’m no fan of the minimum-wage hike in Seattle, or of proposals in Olympia to boost the statewide wage. But the consequences for most businesses and many employees will occur over time. Doors won’t slam shut. They’ll close slowly and softly. And they’ll re-open hesitantly.
Some firms won’t be able to adapt. Some marginal operations will falter faster. But most will survive — some even thrive.
The same, however, won’t be true of the young workers who will find themselves priced out of the labor market. That’s why a training wage makes sense — it allows teens a chance to gain important work experience.
In one of the more remarkable speeches of the legislative session, state Rep. Matt Manweller, R-Ellensburg, argued against a boost in the state minimum wage, reminding his colleagues of the law of demand. When prices go up, demand goes down. We buy less. The House rejected the argument, voting along partisan lines to boost the statewide minimum to $12 by 2019. The bill faces an uncertain future in the state Senate.
By raising the minimum wage, we’re buying fewer opportunities for our young people. That’s not what we should be doing.