A sum­mer bum­mer for young job-seek­ers

Com­ing min­i­mum wage hikes make sum­mer em­ploy­ment scarce

The Washington Times Daily - - OPINION - By Richard Ber­man Richard Ber­man is the pres­i­dent of Ber­man and Com­pany, a pub­lic re­la­tions firm in Wash­ing­ton, D.C.

On July 1, 17 states and lo­cal­i­ties will make a dif­fi­cult youth sum­mer job mar­ket even worse by rais­ing their starter wages. These raises fol­low the 42 sep­a­rate wage hikes that took place on New Year’s Day.

For those skep­ti­cal that in­cre­men­tal min­i­mum wage in­creases re­duce job op­por­tu­ni­ties, a new Univer­sity of Wash­ing­ton study out this week is in­struc­tive. The paper, au­thored by a non­par­ti­san group of lead­ing la­bor econ­o­mists, con­cludes Seat­tle’s in­com­ing $15 min­i­mum wage has caused em­ploy­ers to cut pay­rolls, put off new hir­ing, re­duce hours and let their em­ploy­ees go. It has also re­sulted in a fewer num­ber of starter jobs avail­able. Co-au­thor Joseph Vig­dor said the min­i­mum wage was “re­mov­ing the bot­tom rung of the ca­reer lad­der.”

These lost job op­por­tu­ni­ties couldn’t come at a worse time for young peo­ple look­ing to pick up some sum­mer work ex­pe­ri­ence. Fewer than one in three youths across the coun­try cur­rently has a job, well be­low the his­tor­i­cal norm and one of the few la­bor mar­ket in­di­ca­tors that hasn’t shown much of a re­cov­ery since the Great Re­ces­sion.

Last year, the Con­gres­sional Bud­get Of­fice re­leased a re­port show­ing that one in six young men aged 18 to 34 was ei­ther job­less or in­car­cer­ated — up from one in 10 in 1980. The re­port iden­ti­fied the swath of starter wage in­creases at the state and lo­cal level as one rea­son for the de­clin­ing em­ploy­ment prospects.

These statis­tics are brought to life in the nu­mer­ous ex­am­ples of low-mar­gin busi­nesses that have had to lay off em­ploy­ees or close al­to­gether be­cause of starter wage in­creases. In Flagstaff, Ariz., where the min­i­mum wage will hit $10.50 this week­end, Satchmo’s BBQ and Flagstaff Nut House have laid off em­ploy­ees. And Buster’s Restau­rant and Bar, Coun­try Host restau­rant and Cul­tured Cafe have all closed en­tirely be­cause of min­i­mum wage costs.

In Wash­ing­ton, D.C., the ris­ing min­i­mum wage, which hits $12.50 this week­end, chased off two planned Wal-Mart Su­per­centers to be lo­cated in parts of the city des­per­ate for eco­nomic devel­op­ment and job op­por­tu­ni­ties.

In San Fran­cisco’s Bay Area, where sev­eral cities are rais­ing their starter wages on Satur­day, there has been what one lo­cal pub­li­ca­tion calls a “death march” of restau­rant clo­sures. Busi­ness op­er­a­tors can­not ab­sorb 40 to 50 per­cent in­creases in their la­bor costs with­out dra­matic con­se­quences. (Spe­cific sto­ries can be found at Face­sof15.com.)

These are busi­nesses that once hired a mostly young work force — of­ten staffing up for the sum­mer. And when youths can’t get sum­mer work ex­pe­ri­ence, they lose out on more than just a pay­check that can go to­ward movies and shop­ping. They lose out on learn­ing the soft skills such as punc­tu­al­ity, cus­tomer ser­vice and team­work that help them through­out their ca­reers.

Aca­demic re­search shows that these soft skills picked up at first jobs help em­ploy­ees earn sig­nif­i­cantly more through­out their ca­reers than their coun­ter­parts with­out such ex­pe­ri­ence. As Fed­eral Re­serve Chair­woman Janet Yellen re­cently pointed out in a speech in Wash­ing­ton, D.C., those with early work ex­pe­ri­ence also fare bet­ter dur­ing eco­nomic down­turns.

Sadly, the lack of sum­mer youth em­ploy­ment op­por­tu­ni­ties — ex­ac­er­bated by min­i­mum wage in­creases — hits poor com­mu­ni­ties the hard­est. Many cities in the coun­try al­ready have youth un­em­ploy­ment rates above 30 per­cent. But in some zip codes — in­clud­ing the South Side of Chicago or in D.C. east of the Ana­cos­tia River — the youth un­em­ploy­ment rate ex­ceeds 50 per­cent. Two Brook­lyn teenagers re­cently penned an op-ed in the New York Post ex­plain­ing how the city’s $15 min­i­mum wage has only made their sum­mer job search more dif­fi­cult.

How­ever, there are some en­cour­ag­ing signs. In Cook County, where the min­i­mum wage in­creases by more than 20 per­cent on Satur­day on its way to $13, over 50 vil­lages have opted out — cit­ing the neg­a­tive im­pact on lo­cal busi­nesses and starter em­ploy­ment prospects. Given that pub­lic pol­icy usu­ally changes through the copy­cat phe­nom­e­non over in­de­pen­dent judg­ment, it’s an en­cour­ag­ing sign that dozens of lo­cal lead­ers have stood up to lib­er­als and their threats to the en­try-level job mar­ket.

These opt-outs, along with other signs, like Bal­ti­more’s Demo­cratic mayor ve­to­ing $15 leg­is­la­tion, sug­gest the Fight for $15’s mo­men­tum is be­ing hi­jacked by stark eco­nomic re­al­i­ties. That’s a small sil­ver lin­ing to the dark clouds over tens of thou­sands of young peo­ple look­ing to get hired this sum­mer.

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