Michael Saltsman: Ohio minimum wage hike threatens summer jobs


By Michael Saltsman



Scooping ice cream. Flipping burgers. Keeping watch at the local swimming pool. These jobs have defined teens’ summer employment opportunities for generations.

President Barack Obama recently recalled the lessons he learned working in an ice-cream shop as a young man and called on other employers to “create summer job opportunities for young people who need them.”

It’s a worthwhile goal — with one problem: Who’s going to pay a $10.10 or $12 starting wage to hire them for that entry-level job? That’s a question President Obama and Ohio Democrats must answer as they champion a higher minimum wage in the state of Ohio.

The president laments that “landing that first job is all too difficult for students,” and he’s right. Bureau of Labor Statistics data paints a troubling picture of the entry-level job market. While the U.S. unemployment rate for teens ages 16 to 19 fell to 15.6 percent in February, the statistical improvement in the unemployment rate has come at the expense of more than 1.2 million discouraged teens who’ve stopped looking for work altogether.

Teens in Ohio, where the unemployment rate still averages close to 20 percent, face similar challenges. While they surely appreciate the president’s sympathy, he’s partially to blame for their current predicament.

The administration was stymied in its own 2013-14 push to raise the federal minimum wage to $10.10 an hour. (A Congressional Budget Office report put the price tag of that policy at a half-million lost jobs, more than 20,000 of which would be lost in Ohio.) Instead of reconsidering the wisdom of this approach, Labor Secretary Tom Perez took the show on the road, “stressing the need for higher minimum wages, particularly at the state and local levels.”

In locales that have followed his advice, the consequences are impossible to ignore. In New York state, for instance, a $2.50-an-hour wage hike for full-service restaurants has rippled across the state’s small businesses. Longway’s Diner, a 24/7 favorite of locals and travelers alike, was forced to cut its night shift and lay off two employees as a consequence of the cost increases. Medici House in East Aurora was forced to close its doors entirely. (Stories from other states around the country can be found at http://FacesOf15.com.)

Perhaps the most compelling illustration can be found at a Ben & Jerry’s franchisee, in Saratoga Springs, New York. The owner told the Daily Gazette that, at higher minimum wage levels, there’s “a whole underclass of jobs for high-school and college kids that’s going to go away.” The irony appears to be lost on President Obama that the job he used to take his first step on the career ladder will now be eliminated thanks to a public policy he’s championing.

The dollars-and-cents consequences of missing out are clear: Economists from the University of Virginia and Middle Tennessee State University found that those with part-time work experience in high school earned about 20 percent more annually a decade after graduation, compared to those who didn’t work. More troubling, an analysis from economists at Welch Consulting and the University of North Carolina found that teens who are unemployed today are more likely to be unemployed in the future

The $10.10 or $12 minimum wage level — one or both of which will be considered in Ohio this year — promises to be uniquely devastating for young adults. Voters and policymakers should take note: To keep summer job opportunities open for another generation of young employees, ignore the misguided calls to raise the minimum wage.

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By Michael Saltsman

Michael Saltsman is research director at the Employment Policies Institute, which receives support from restaurants, foundations, and individuals.

Michael Saltsman is research director at the Employment Policies Institute, which receives support from restaurants, foundations, and individuals.

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