Minimum Wage Hikes Raise Costs

I grew up in a family who had to stretch their money the best way they could. So I understand those in our nation who labor hard to pay their monthly bills. As our economy continues to struggle, the President and his congressional allies are proposing another hike in the federal minimum wage. I have already written about the racist roots of the minimum wage. The Davis-Bacon Act of 1931 was intentionally designed to prevent blacks from being hired for federally funded work projects. Raising the minimum wage also raises the cost of all kinds of goods and services for consumers, rich and poor: if the grocery store has to pay more to have its shelves stocked, it will have to raise the price of groceries. And I have also written about how raising the minimum wage will undoubtedly raise unemployment rates among the lowest skilled workers.

This third concern was raised in a recent report by the non-partisan Congressional Budget Office (CBO), which analyzed the probable effects of the proposed minimum wages increases. The report stated that the changes would most likely eliminate at least 500,000 jobs (or as many as 1 million) by the time they were in full effect. In return, they would raise the annual income of families in poverty by about $300 a year.

Today, the black unemployment rate remains over twice the unemployment rate of whites, and the unemployment rate of black teenagers is over 43%. These two figures are undoubtedly linked: a few years of steady employment make anyone’s resume more attractive to employers in a competitive job market. Adults without a college diploma or helpful family connections are most likely going to remain unemployed if they have no work experience.

But if the minimum wage continues to rise, the entry level job will become a thing of the past. When I was young, it was normal for teenagers to offer eagerly to cut your lawn, shovel your driveway or babysit your children for a couple of bucks. This was a time-honored rite of passage: you started with odd jobs and maybe worked your way up to a paper route or a steady job at McDonalds. This gave you spending money, or maybe even helped out with the bills, because back then Mom and Dad weren’t willing (or able) to hand you fifty bucks to go out with your friends.

But of course just because you worked at McDonalds for minimum wage after school didn’t mean that you expected to work there for the rest of your life. Back then, after graduating from high school, you might enter trade school, join the military, or start a business. If your family had the money, you might go to college. Regardless of how wealthy or poor your parents were, no one expected you to keep the same job you had in high school and somehow be able to support a family of four on the wages.

Paying one’s dues by holding a low-paying job offered many benefits for both middle class and working class young people. It taught them how to show up to work on time and how to be respectful and professional to a boss, coworkers and customers. It gave them a chance to prove they could be reliable and to obtain valuable character references for the future. It also motivated individuals to see the value in learning specialized skills, whether they did that through college or through some other option.

But a lot has changed since I was a child. In many suburban areas today, teenagers are unwilling or uninterested in babysitting or mowing lawns, because their parents give them as much money as they ask for. These same teenagers attend colleges which cater to their every whim and then enter the work force expecting to have flexible hours and to be allowed to work from home. Author Dan Schawbel describes the typical Millennial generation worker as “self-centered, needy, and entitled with unrealistic work expectations.” Could these unrealistic work expectations have anything to do with the fact that so few of them had to pay their dues with a low-paying job?

While an increasing number of wealthy and upper middle class young people are entering the work force with a sense of entitlement, many working class young people are finding it difficult to enter the work force at all. Raising the minimum wage with the idea of making every single job in America pay a so-called “living wage” will simply keep more and more Americans out of the workforce entirely.

None of this is meant to suggest that there are not adults for whom working a minimum wage job is the only option to support themselves and their children. Nor does it mean that it is easy for these individuals to work long hours for low pay. However, the answer to this problem is for these individuals to have opportunities to improve their job skills, not to force all employers to pay every single teenager a “living wage.” I urge you to let your legislators know how you feel about the minimum wage hike.

Bishop Harry Jackson is chairman of the High Impact Leadership Coalition and senior pastor of Hope Christian Church in Beltsville, MD.