I ran across this column by Thomas Sowell today – pointing out that it isn’t true compassion to raise the minimum wage. Those who are lucky enough to keep their jobs will get paid more yes, but jobs will disappear overall. There will be a reduction in jobs available, increased unemployment as marginally valuable jobs are cut. It will put people out of work, and we should care about these people, too.
(A business owner, whether he runs a restaurant, a non-profit, a laundromat, an accountant’s office, a corporation has to respond if costs change. Increasing the hourly wage = increase in expenses. People responsible for their organization have to either bring in more money to keep the same people employed, but that’s not always possible. They’ll need to find a way to get expenses below income so they don’t go out of business. We know that many will cut out jobs to make up for the higher costs.) The biggest groups affected are of course the poorest and the youngest.
Unemployed young people lose not only the pay they could have earned but, at least equally important, the work experience that would enable them to earn higher rates of pay later on.
When I was growing up and in high school, you could get a job and earn pocket money with a paper route, part time service job, lawn mowing… I see very few options for my own children to earn money outside of us or their grandmother creating jobs for them to do around the house. I tell them there are 3 ways to earn money: 1. labor, 2. producing a product/service someone is willing to buy, or 3. selling/exchanging their assets (toys, bike, etc.)
Since working for someone else (1.) is no longer an option and since (3.) is usually a dead end, my kids are looking at (2) and seeing examples of young people (like Nick D’Aloisio) who created an app or set up a YouTube channel and made their fortune or at least their future. We’re cultivating them as entrepreneurs. This is a good thing! Innovation can help counter the economic malaise, can challenge the crony capitalists…
I’m hoping that the lack of jobs and employment for our youth has a silver lining and will cause more folks to take charge of their own economic lives, and create new opportunities.