Teen minimum wage costs them jobs
May 21st, 2008 | by Brian |Daily Herald, Chicago, April 28, 2008
“Suburban teenagers might have trouble finding summer employment, but some businesses say they fear they’ll have even fewer work opportunities next year.
If an Illinois proposal to make the teenage minimum wage equal to adults’ pay becomes law, teen-friendly businesses may slice hours or give their 15- to-17-year-old workers the boot.” …
York Theatre in Elmhurst also would be forced to downsize its 40-person staff of mostly high-schoolers if the higher wages became law.
“Being a family-run company, there’s not a whole lot in the budget for payroll,” said Trevor Murakami, general manager of York Theatre.
See also this editorial in the Investors Business Daily:
As a basic point of economics, it’s a given that anytime you raise the cost of anything, you will use less of it. As such, the minimum wage hike that took effect in Massachusetts this year has been a job-killer for thousands of untrained youths, many of them minorities.
We’re not the only ones to see this, by the way.
Economists David Tuerck and Paul Bachman at The Beacon Hill Institute did the math. They figured a hike in the minimum wage in Massachusetts from $6.75 an hour to $8.25 an hour (the level to which it originally was supposed to rise) would cost 26,970 jobs and subtract $371 million in wages across the state.
If you adjust that by knocking off a couple thousand of those jobs and a few million in wages, you get a good idea of what Massachusetts is paying to have the highest minimum wage in the nation — one that is 37% above the federal minimum of $5.85.
It’s the same everywhere, nationwide or by state: Hiking the minimum wage sounds generous and decent, but in fact hurts small businesses and workers alike, squeezing profits, destroying jobs and forcing businesses to pare back their paid benefits.
It’s not just Massachusetts. The U.S. also is facing this problem. The U.S. minimum wage will be hiked to $6.55 an hour this July. But hold the applause please. The National Federation of Independent Business reckons it will kill some 217,000 jobs.
Faced with a mandatory hike in their wage costs, small businesses have a choice: either fire workers, raise prices or do both. Just letting people go often is easiest.
Small wonder that teens — often at the bottom of the labor ladder, and with the least to offer in terms of productivity, training and education — are the first fired and the last hired.
Want to end Massachusetts’ teen job meltdown? Can the minimum wage, and watch teen employment soar.
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