Now that teenage unemployment has reached 25 percent among those still actively seeking work (source), it seems like a good time to look at regulations that might discourage companies from hiring teenagers. Economists have traditionally said that the minimum wage law is the primary weapon wielded by older workers against the young. With a high minimum wage, companies won’t want to hire the inexperienced so the next generation will be hobbled in their attempts to build a sufficiently strong resume to unseat the current generation of workers.
At a party here in Massachusetts, I asked a group of comfortable middle-aged folks how they felt about the minimum wage. All were strongly in favor of a minimum wage law and thought that it benefited entry-level workers. I asked “Wouldn’t a minimum wage, of whatever amount, cause companies to refrain from hiring any worker that wasn’t worth the mandated wage?” Absolutely not, the group agreed. A restaurant would need burger flippers and they would pay whatever the government told them to pay. I observed that it would be pretty tough to live on the current $8 per hour minimum wage here in Massachusetts. Wouldn’t it be better to set it at $50 per hour? If $8 is good, surely $50 would be better. “Maybe that is too high,” one person said. They accepted that a $50 per hour minimum wage would discourage hiring, but believed that an $8 one would not.
What about in their own households? Nearly all of these folks employed cleaners, landscapers, babysitters and nannies. Suppose that the government mandated that they pay their helpers more than they were currently paying. “We’d clean the house ourselves,” one couple said. “I’d let the weeds grow,” said another. “We would stay home and watch TV instead of hiring a sitter and going out,” said a parent. Would a business faced with a minimum wage law behave similarly? “Absolutely not, companies are completely different from consumers,” was the response.
Why was it more common in California for households to employ helpers than here in Massachusetts? Was it because immigrant labor is available at much lower prices than here in Massachusetts? That a gardener at $10 per hour is appealing to a homeowner than a $30 per hour gardener? “No, it is mostly because there are more people available and it is easier to find someone.”
“We need the minimum wage for social stability,” one guest asserted. I asked if they considered Norway, Singapore, Switzerland, and Sweden to be unstable, as those countries had no minimum wage law. Then I asked if they thought it made our society more stable to have 25 percent of the young workforce out on the street instead of working at a job.
Not a single person changed his or her mind as a result of my questioning. Support for the minimum wage remained solid at 100 percent.