Kokomo Tribune; Kokomo, Indiana

March 28, 2014

Put teens to work by laying off minimum wage rhetoric

Taylor Armerding
CNHI News Service

Editor's note: CNHI newspapers that are not weekly subscribers to Taylor Armerding's column may publish this one if they notify him at t.armerding@verizon.net.

I can tell spring is in the air.

Not because of the weather, at least in most of the country where winter isn’t letting go. It’s in the air because, just as inevitably as crocuses, forsythia and robins appear, you once again hear mayors and governors whining about how there aren’t going to be enough summer jobs for teens.

Of course, the lack of work is always the fault of “major employers” who aren’t “stepping up to the plate” and “creating jobs" that magically last just long enough for the summer season; are designed for young people who have marginal skills; and won’t displace or even reduce the hours of any regular employees.

It will just be incidental, of course, that those jobs will make those politicians look good to their constituents. If the teen job market was booming, mayors and governors would be clamoring for credit. When it’s not so good, well, it is obviously the private sector’s fault.

Apparently it is a mystery to them why, nearly five years after the recession officially ended, the national unemployment rate for teens is more than 20 percent while the official rate for the entire workforce has declined to around 7 percent.

Certainly a piece of that gap comes from highly misleading statistics about overall unemployment. As economists of all political persuasions point out, “official” unemployment statistics don’t count those who have become so discouraged that they have quit looking for work, or those who are underemployed. Actual unemployment is more like double the official rate.

That means, as it is delicately phrased, a “still-weak" job market drives older, more experienced workers to take jobs that might otherwise be available to teens.

The other, much bigger factor is something over which politicians have more control – a factor they studiously ignore and try to help the public ignore by pointing at the private sector: It is that the political class dictates to the private sector what it must pay entry level workers through a mandated minimum wage. They hope you will ignore the connection between them making it more expensive to hire workers and the number of jobs that are available.

Yes, federal law allows for teens to be paid just $4.25 an hour for the first 90 days with an employer. But those jobs can’t displace regular workers, or even reduce their hours or benefits. And a higher minimum wage for them will make it less likely that businesses will be able to take on teens for the summer.

As President Obama casts about for anything to distract the public from the disastrous rollout and expensive realities of his signature health care program, we have all been hearing in recent months that an increase in the minimum wage will have only positive effects.

A government-mandated increase of 20 to 30 percent or more in the minimum wage will, Obama and these politicians contend, give lower-wage workers more money to spend, which they will immediately feed into the economy, creating even more jobs as businesses hire more workers to keep up with increased demand. The economy will spiral upward to prosperity and full employment.

Right. The reality is, year after year, cities and states spend millions on “summer jobs programs” and lay guilt trips on businesses for not being good corporate citizens because they don’t want to spend extra money pretending they have three-month jobs for low-skilled workers.

Yet, every year youth unemployment gets worse – to the point that some economists describe it as a crisis on the level of the Great Depression.

It is definitely a problem. Summer jobs for teens are a good thing for obvious reasons: It gives them something productive to do, rather than being idle. It teaches them responsibility – to show up on time, do a job, work with others and in many cases learn how to deal with customers.

Yes, a little bit of money is nice, but that is not the most important thing – not even close. My summer job at a camp when I was a teen paid next to nothing. In retrospect, I figure I should have been paying them for the apprenticeship I received. It had far more long-term value than an artificially inflated wage.

More significantly, I might never have gotten the job if the camp had to pay me, or its regular employees, a higher minimum wage. My real market value was next to nothing. I was eager, willing and energetic, but I needed regular training and supervision.

And that points to the other reality that the minimum-wage hucksters hope you won’t notice: The real minimum wage, no matter what the government says, is zero. If jobs aren’t there, neither is a wage.

The private sector is not as heartless as the pols claim it is. Companies want a skilled workforce and are willing to participate in training the teen generation. Some will do it even in the face of government disincentives. But, as those disincentives increase, fewer will.

The private sector is not to blame for that. It is the public sector that needs to step up or, in this case, step back.

Taylor Armerding is an independent columnist. Contact him at t.armerding@verizon.net