Exempting teen workers from the minimum wage would hurt teen workers and their families, and would not address the decline in teen workforce participation – which has nothing to do with the minimum wage. Moreover, such an exemptions would offer few benefits for employers, since teens make up a very small share of Iowa’s workforce and of the workers who would benefit from a minimum wage increase. Polk County should reject any proposed subminimum wages or exemptions for teen workers.
A Subminimum Wage for Teenagers Would Be Harmful and Is Unnecessary
- Exempting teens from the minimum wage would offer little benefit for employers, since 87 percent of low-wage workers in Polk County are adults 20 or older,1 and teens are just 3.4 percent of the county’s workforce.2
- Many teen workers provide essential income to struggling low- and middle-income households. Cutting them out of a minimum wage increase would hurt their households more.
- Today more than 70 percent of college students work as they struggle with high tuition and debt – an average of 30 hours per week.3 Exempting them from a higher minimum wage will force them to work more hours, take longer to graduate, and take on more debt – hurting their economic futures.
- Iowa law already allows businesses to pay a lower minimum wage of $6.35 for the first 90 days of a new hire’s employment, 4 giving employers the ability to pay teens and other new workers a lower rate during training. A lower permanent minimum wage for teens would be ill-advised.
- A teen subminimum wage will hurt adult workers – especially in high unemployment areas – who are competing to find jobs.
Low Teen Employment Levels Have Nothing to Do With the Minimum Wage
- Minimum wage opponents argue that teens will lose job opportunities if their minimum wage is increased. But as Bloomberg News reports, “a wave of new economic research is disproving those arguments about job losses and youth employment.”5 State-of-the art research on teens and the minimum wage by economists at the University of California6 found that higher minimum wages have no effect on teen employment, including for African-American teens.
- While African American teens face much higher unemployment than their white peers, this trend has nothing to do with the minimum wage, and has persisted whether the minimum wage has gone up or stayed flat.7
- Overall teen employment has been falling for decades,8 regardless of whether the minimum wage has been flat or increasing – making it clear that this decline has nothing to do with the minimum wage.
- There are multiple reasons for this trend, including the fact that today more teens are full-time students, that fewer upper income teens work, and that working class teens face increasing job competition from adult workers, many of whom cannot afford to retire.9
- The solution for low teen employment levels is not to exempt teens from the minimum wage, but to institute and expand support for targeted and subsidized hiring programs, such as publicly supported summer jobs programs. With adequate funding, these programs are among the most effective means of boosting teen employment.
- Peter S. Fisher, The Case for a Polk County Minimum Wage, The Iowa Policy Project, May 2016, http://www.iowapolicyproject.org/2016docs/160516-minwage-Polk.pdf.
- NELP analysis of U.S. Census, 2014 American Community Survey 1-Year Estimates, Sex by Age by Employment Status for the Population 16 Years and Over.
- Anthony P. Carnevale, Nicole Smith, Michelle Melton, and Eric W. Price, Learning While Earning: The New Normal, Georgetown University, Center on Education and the Workforce, 2015, https://cew.georgetown.edu/wp-content/uploads/Working-Learners-Report.pdf.
- Iowa Workforce Development, Wage Frequently Asked Questions, http://www.iowadivisionoflabor.gov/wage-frequently-asked-questions.
- Bloomberg View Editorial Board, “Raise the Minimum Wage,” Bloomberg, April 16, 2012, http://www.bloombergview.com/articles/2012-04-16/u-s-minimum-wage-lower-than-in-lbj-eraneeds-a-raise.
- Sylvia Allegretto, Arindrajit Dube and Michael Reich, “Do Minimum Wages Really Reduce Teen Employment? Accounting for Heterogeneity and Selectivity in State Panel Data,” Industrial Relations 50: 205-240, 2011, http://www.irle.berkeley.edu/workingpapers/166-08.pdf.
- Ann Thompson, What Is Causing Record-High Teen Unemployment? Range of Economic Factors Drives High Teen Unemployment, But Minimum Wage Not One of Them, National Employment Law Project, October 2011, http://nelp.3cdn.net/5f5063b72229a9081a_lym6bkbrw.pdf. See also Allegretto et al., ibid.
- Teresa Morisi “The Early 2000s: A Period of Declining Teen Summer Employment Rates,” Monthly Labor Review, Bureau of Labor Statistics, May 2010, http://www.bls.gov/opub/mlr/2010/05/art2full.pdf.
- Anne Thompson, Op.Cit.