July 7, 2016

Self-Awareness Fail: Boston Globe Editorial Cites Lost Summer Jobs Due to Higher Minimum Wage

A June 30 Boston Globe editorial moaned about how “state funding for youth jobs” in Massachusetts “faces damaging cuts.”

Two kinds of “cuts” are occurring. One is, as of the time of the editorial, an absolute cut in dollar funding for the related government program, known as YouthWorks. However, there is another more significant cut in the number of jobs which could be provided even if dollar funding had stayed the same because of … wait for it … the Bay State’s minimum wage increase from $10 per hour to $11 (HT PJ Media; bolds are mine):

Fund summer jobs for low-income teens

… The program provides money for YouthWorks, which pays the wages of 4,400 low-income teens in eligible cities who work for nonprofits or local government agencies in the summer. The Senate originally proposed the same funding amount as last year, $11.5 million. Level-funding actually means 600 fewer positions, though, because of the rise in the state’s minimum-wage increase to $10 per hour this year and $11 per hour next year. Maintaining the number of positions would take $13.34 million. But the compromise budget bill lawmakers filed Wednesday night included $10.2 million for the program, which translates into about 1,000 jobs lost.

The summer job reductions come in a shrinking youth employment market. Teen employment has dropped significantly since the late 1990s, when more than 50 percent of teenagers had jobs. The number now is below 30 percent, and as the minimum wage continues to rise, that percentage will be challenging to maintain. Advocates estimate that only 1 in 4 teens who apply for state-funded jobs actually gets work.

In June 2013, a Globe editorial supported raising the minimum wage to $10 per hour by 2015. To be fair, it advocated a wage as low as $6 per hour for “seasonal employees under age 20, who work five months or less.” To be appropriately critical, the editorial also claimed that “The jury is still out on whether increasing the minimum will cause many employers to pare back hiring.”

Well, the employer known as the government of Massachusetts, before it cut the absolute dollar amount of funding, indeed had to “pare back” planned hiring. So the jury that was “out” in 2013 is now in. Why does the Globe think things would be any different for the vast majority of private businesses which can’t just raise prices without negative consequences?

The Globe’s June 30 editorial also failed to note the irony in its complaint about shrinking teen employment. It’s shrinking because employers who were able to hire teens at $6.75 per hour before 2005 can’t afford to pay inexperienced workers 60 percent more, or about 35 percent more in real terms (inflation in the intervening 11 years has been about 25 percent).

In the la-la land of the Globe’s editorial writers, all the legislators need to do is find more money:

Lawmakers should make state-funded jobs for youth a clear priority. Should economic predictions for the Commonwealth improve in the near future, they must restore funding for YouthWorks to support upward of 4,000 annual jobs.

A few million dollars in cuts is practically meaningless in the Legislature’s proposed $39.1 billion budget, but it would have very real impact for the most vulnerable teens in need of a foothold in the Massachusetts economy.

Wait, is the Globe telling us that “economic predictions for the Commonwealth” aren’t very strong right now? If so, maybe that’s because the current minimum wage has raised compensation costs across the board and made the state less competitive than other states. And if the cuts which would be necessary elsewhere are so “meaningless,” maybe the Globe can make concrete suggestions instead of punting on the tough call.

Tom Knighton at PJ Media observes:

Those who are fighting for an increased minimum wage ignore the simple economics of running a company. Businesses only have so much money available to pay people. The difference between YouthWorks and private business is that only one gets to vote on how much they have available.

Well, it turns out that the government of Massachusetts “only has so much money available” in its budget, which, like most other states, must be balanced by law. If the hourly wage of YouthWorks participants has to increase, either money has to be taken from somewhere else to pay for the same number of participants, or the number of participants has to be reduced.

I should note that though the Bay State has a Republican Governor, both houses in the Massachusetts General Court, the formal name for the commonwealth’s legislature, are heavily dominated by Democrats.

Wait, I thought Democrats were champions of youth employment. Apparently not when a higher minimum wage gets in the way.

Cross-posted at NewsBusters.org.

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