Youth, Labor, Recessions and Minimum Wages

One of the most frustrating aspects of being conservative is that it’s too easy for the other side to fall back on a “you hate X” where X is any group that you are really, in fact, trying to assist.

An easy example to consider is a school child and her homework.

When I was a teacher I could very easily “give” the student an A on her blank homework.  However, I felt that it would do her more good in the short term, the long term and in other character building aspects if she actually worked for and earned that grade.

In today’s liberal dialogue, I would be said to “hate kids”.  Or, if the individual liberal were truly on his game he could claim that I “hate girls”.

Silly example?  Perhaps.  But consider modern day minimum wage laws.

Everyone but the most “curmudgeony” Mr. Scrooge wants to see people and society make it good.  Of all the jobs I’ve had, only one really tried to exploit my time and my labor.  The rest really wanted me to do well.  The entry level jobs all had the expectation that as I learned I would get a raise.  And when I had reached my potential, I would take another job in the company, or as was often the case, I would move on to another job.  A job up the labor ladder.

Certainly these companies didn’t lavish me with bonuses and crazy wages; they had fiduciary responsibilities they had to meet.  But when they could, more often than not, they did.

Now, each of the jobs I had started me out at minimum wage.  Some offered benefits that augmented that wage.  I got to work at the pizza joint; they provided free pizza and a social scene.  I got to work at the gas station, they provided a fantastically flexible schedule.  I got to work at the movie theater, I got to see free movies.

However, in case, they were all the same in one crucial aspect; they couldn’t afford to hire the new and inexperienced kid at a wage higher than the minimum wage.  The new kid was always slow.  Made mistakes.  Was rude.  Or didn’t exhibit reasonable work traits; showing up on time, doing what your told, dressing appropriately and multitasking.  As the kid mastered these things, he’d get a raise; often a promotion.

In our quest to provide “living wages” to people who have yet to earn them, to demonstrate that they have the productive ability to provide value back to their employer, they simply will not be hired; they’ll remain idled.  That labor will never be tapped.  And this completely avoidable circumstance has two devastating results.

  1. Those folks who are unable to be hired due to the price of labor being higher than their productive value aren’t earning and spending.  Rather, they may only end up consuming otherwise valuable capital.
  2. And this might be the devastating factor – These folks stop advancing up that “labor ladder.”  Without a job that teaches the value of showing up on time, they never learn to show up on time. If they never learn and practice the value of innovation, they’ll never obtain a higher order job that pays significantly for innovative individuals.

And what are we seeing in the real world?

US jobs gap between young and old is widest ever

WASHINGTON — Squeezed by a tight job market, young Americans are especially struggling. They have suffered bigger income losses than other age groups and are less likely to be employed than at any time since World War II.

And what does this mean to our young friends?

– The share of young adults 18-24 who are employed has dropped to 54.3 percent, the lowest level since the government began tracking such data in 1948.

– In the downturn, the employment decline has been steeper for this age group than any other; at the end of 2011, the unemployment rate was 16.3 percent for 18-to-24-year olds and 8.8 percent for adults ages 18-64.

– Young adults working full time have median weekly earnings of $448, about 6 percent less than in 2007, as employers found it easier to restrict the wages for entry-level jobs than to cut the pay of more experienced workers.

– About 19 percent of men ages 25-34 were idle in the weak job market, neither working nor attending school. That’s up from 14 percent in 2007.

Fewer than half of young adults who are currently working say they have the education and skills necessary to advance in their careers.

This chart below shows the damage being done to our kids.  They’re out of work.  And because they’re not working, they’re not learning.  All in the name of “helping” people by providing a “fair and living wage” we are destroying the chance of those folks from ever LEARNING to get their own jobs:

This chart demonstrates that as the minimum wage has been raised, the unemployment rate of teens exceeds the national unemployment rate by larger and larger amounts.  As we make labor more expensive, the new entrant and the marginal employee, the very folks we’re trying to help, suffer the most.

It’s time the liberal acknowledges that simply giving an “A” to a student without expecting mastery of a subject isn’t really helping them; it’s setting them up for a lifetime of failure.

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