Minimum-Wage Hikes Will Mean Fewer Entry-Level Jobs

Employees and customers at a Dunkin’ Donuts in Santa Monica, Calif., in 2014. (Mario Anzuoni/Reuters)

It’s almost like our elected leaders don’t want them.

The first paying job I ever had was at age seven — I picked up trash at a construction site where my dad was working. I recall making $2 per hour. It wasn’t much. From there, I went to deck construction, asparagus picking, being a camp counselor, and then to roofing. Those jobs were too difficult, so I went to college and now work in public policy.

My first jobs were entry-level and low-paying. I didn’t need a specific degree or skill to do them. But they were valuable nevertheless. They taught me important life lessons, such as the importance of showing up on time, getting the little things right, communicating openly with my boss, and establishing priorities. I also learned what I was good at, what type of work I really enjoyed, and the pleasure of a job well done. Without those lessons, I could never have climbed the ladder of opportunity.

Most people I talk to think about their first few jobs the same way. They may or may not remember how much they made. But they definitely remember gaining experiences and skills that last for life. Moreover, they want everyone to be able to find their best path upward, which usually starts with those early jobs.

But it seems to me that policymakers have forgotten the importance of entry-level jobs. How else can I interpret the growing calls for minimum-wage hikes? Whatever else those policies do, they always cut off the lowest rungs of the ladder of opportunity. It’s almost like our elected leaders don’t want entry-level jobs.

Minimum-wage hikes are everywhere these days. A few years ago, the idea of doubling the minimum wage to $15 an hour was almost unheard of. Now Florida has enacted that policy statewide, and President Joe Biden is demanding it as part of his pandemic-relief plan.

The arguments pushed by advocates of higher minimum wages are heavy on anecdotes and short-term benefits. Take President Biden: “If you work for less than $15 an hour and work 40 hours a week, you’re living in poverty.” But this misleading statement distracts us from the reality that few minimum-wage earners are sole providers of a household or are single parents struggling to make ends meet.

Only about 15 percent of low-wage workers are from poor households. The rest are second earners — like my wife, who makes close to minimum wage — and teenagers and young adults from wealthier households. Half of minimum-wage earners are under the age of 25, most of them just getting their foot in the door. That door may get slammed shut when the minimum wage gets hiked.

The consensus of economists is that a hike in the minimum wage costs jobs. It makes sense: If employers are required to pay more in wages to their employees, they will be able to afford fewer of them. Economists and others may disagree about how many jobs will be lost and whether the trade-off for higher wages is worth the cost, but most people will lose when this policy passes.

For instance: The Congressional Budget Office estimates that a $15 minimum wage would likely lead to a loss of 1.3 million jobs. It also found that fewer jobs would offset the higher wages, meaning a loss of income overall. Fewer jobs and less pay is not a good policy decision.

Even economists who advocate a higher minimum wage acknowledge that raising the minimum wage will not drive down poverty rates, because most people who live in poverty don’t have jobs. There is real-life proof: A 25-year comparison of low-income workers in states that hiked the minimum wage with those that did not shows no difference in their wage growth.

Add it all up, and the evidence cautions against increasing the minimum wage. It will not lift many people out of poverty but instead will make fewer jobs available to the unemployed and those looking for their first jobs.

I’ll never forget the lessons from my first jobs. It’d be a shame if we blocked future generations from finding and building on a foundation of their own.

Jarrett Skorup is the director of marketing and communications at the Mackinac Center for Public Policy, a research and educational institute based in Midland, Mich.

Next Post

Raimondo’s education legacy: an ambitious agenda, but incomplete goals

Tue Feb 2 , 2021
Raimondo is now leaving office sooner than she imagined, to join President Joe Biden’s cabinet as Secretary of Commerce. A US Senate committee is expected to vote on her nomination Wednesday, and she could be confirmed by the full Senate by the end of the week. As she prepares to […]