Minimum wage hikes are killing summer jobs

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Limiting the teen workforce’s job opportunities can hinder future success.

by ALFREDO ORTIZ

 

The school year is winding down, which means millions of teens across the country will be transitioning from classrooms to summer jobs. For decades, summer employment as a lifeguard, bus boy or tennis instructor has been a mainstay of American culture – featured in television shows dating back to Leave it to Beaver or in more recent films like High School Musical 2.

But unfortunately, this iconic tale is becoming less common and has been trending downward for decades. According to data from the Bureau of Labor Statistics, the labor force participation rate for Americans aged 16 to 19 has experienced a steep decline since 2000. Following its peak in the late 1970s, teenage labor force participation has dropped by more than 60 percent. And by the year 2024, it’s estimated that only one in four 16 to 19 years olds will be involved in the job market.

While other factors, such as increased college attendance and changing dynamics around immigration, have been responsible for lower workforce participation in young adults above the age of 20, government policy is more directly to blame for the declining participation trend in high school aged teenagers.

Enter the minimum wage, a policy that mandates a wage floor, which proponents claim is intended to ensure that even low-skilled workers receive fair pay. However, the reality around the issue is very different, and the associated consequences hurt the very people the policy intends to help.

Forcing employers to compensate employees at a higher rate than what the position is worth helps neither the employee nor the business. To balance budgets, businesses are forced to make up the increased labor costs by reducing employee hours, cutting staff numbers, or closing the business altogether. And the first positions that are usually eliminated are the entry-level, low-skilled jobs that can easily be added to someone else’s duties, outsourced or completed by a machine. Look no further than the automated kiosks that have been replacing cashiers at fast food restaurants all across the country.

These disappearing entry-level jobs are the very positions that high school students apply for during the summer months because it’s unlikely they already have sufficient work experience to gain a higher position. So when these employment opportunities recede, so do the chances of landing a summer job, which discourages young people from entering the workforce.

This same trend harms small businesses disproportionally than other more established companies because smaller enterprises usually rely more on entry-level, seasonal and part-time workers. Additionally, small rises in the price of labor can affect the bottom line of small business budgets more drastically because profit margins are likely to be small.

The U.S. has gotten into a bad habit of increasing mandated wages during the past few decades. According to a recent analysis from the Mercatus Institute, the average entry-level wage in the U.S. – adjusted for inflation and state population – has increased by 20 percent since the year 2000.

The correlation between minimum wage increases and the decline in the workforce participation rate of teenagers is difficult to ignore. And while it’s impossible to definitively prove a causal relationship, mountains of anecdotal evidence imply the connection.

It’s obvious that in a desperate attempt to artificially increase U.S. wages, policymakers are eliminating the opportunity for young people to gain work experience that will both help them climb the career ladder in the future and make money to help pay for college or pay living expenses once they’re living on their own.

Teenagers already have a difficult time growing up and fitting in, let’s not make their lives worse by limiting their job opportunities and hampering future success.

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