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Why shouldn't a teenager make 20 an hour? At 16 your looking down the road at 2 very expensive options. 1) Go to college and earn a degree for 120-240k dollars

by lumost 5y ago

Why shouldn't a teenager make 20 an hour? At 16 your looking down the road at 2 very expensive options. 1) Go to college and earn a degree for 120-240k dollars 2) Start paying rent, owning your own car, healthcare, food, and leisure activities. Both of these are expensive directions to take. It used to be that someone could pay for school with a summer job, why shouldn't it be now? It doesn't appear the education changed at all.

xyzzyz 5y ago
> Why shouldn't a teenager make 20 an hour? It's not that he "shouldn't". Rather, many businesses cannot afford to both pay teenage employees $20/h, and also to not raise the prices. Some businesses can raise prices just fine, but others are not able to, as the customers will stop buying at higher price point. For example, if all groceries doubled their food prices, I'd still buy food (though maybe less than before), and likely spend more on it than I used to. However, if all restaurants doubled their prices, I'd pretty much stop eating out altogether, except special occasions.
- lumost 5y ago
  However if all groceries doubled their prices then all workers would demand higher wages to compensate. Other businesses would need to become more efficient with their labor or reduce margins. In the short-term this means CEOs get paid less, and investors see higher ROI in labor efficient business models. It's obvious that teenagers can't make 1k/hr without breaking the economy - but I don't see any reason why $20/hr would be outside of historic norms. In 1981 the minimum wage was ~$3.25/hr, translating to ~9.71/hr today. Given the advances in technology that have driven a more than 2x increase in real economic productivity over that period why shouldn't the starting wage be $20/hr for teenagers?
  - xyzzyz 5y ago
    All workers demand higher wages at all times. Workers demanding higher wages stronger and harder won't raise aggregate wages by much, as there is only so much that is actually being produced, and aggregate wages can pretty much only be increased through increase in aggregate supply: the margins are already pretty thin, especially in retail and food service business, and the CEO pay is pretty small component in grand scheme of things (CEOs also don't actually consume much of their earnings, they invest most of it, so you can't actually transfer much of consumption from them to workers). > Given the advances in technology that have driven a more than 2x increase in real economic productivity over that period why shouldn't the starting wage be $20/hr for teenagers? The growth in economic productivity hasn't been uniformly distributed across industries, and it's been pretty low exactly in the industries depending on cheap, low skill labor. What are the advances in technology between now and 1981 that made restaurants 2x more productive?
    - rswail 5y ago
      > What are the advances in technology between now and 1981 that made restaurants 2x more productive? Microwaves, dishwashers, steam-injection ovens, just-in-time logistics for raw ingredient deliveries, credit cards, online ordering...
      - xyzzyz 5y ago
        Microwaves and dishwashers were popular in commercial environment before 1980, and I don’t think credit cards make a restaurant more productive.
        lumost 5y ago
        > I don’t think credit cards make a restaurant more productive. They certainly reduce the potential for theft/shrinkage! It used to be that you needed a trusted business manager/employee to manage the register, now anyone can do it and it's much harder for someone to siphon funds. All transactions are now viewable to management to more easily see what's selling and what's not.
        xyzzyz 5y ago
        That’s a good point, haven’t thought of that.
    - lumost 5y ago
      Workers do not demand appropriate wages commensurate with their value at all times. I recall making $7.25/hr and having colleagues "doing well" by making $7.50/hr. At the time it was not uncommon for "good" employers in the service sector to promise something along the lines of a $.25/hr raise every 6 months to a year. Now the problem with this is that the effect is to lower expectations for wages by taking advantage of financial literacy. Someone working for them for 4 years receiving a raise every 6 months earns $2/hr more. The employer/seasoned employees point to this and say that a starting wage $2/hr higher is unreasonable. Unfortunately the fixed rate wage increases diminish over time, and if you think that moving into management/higher level positions would entitle you to more money... then I have a bridge in Brooklyn to sell you. When employers mirror this strategy or take other similar approaches, then you end up with wages that are depressed relative to the value of the labor being provided ( or the opportunity value if that labor was applied to other activities, or used more efficiently ).
- rswail 5y ago
  If all restaurants doubled their prices, but, at the same time, paid their employees a proper wage (and made that public) and removed tipping, they could effectively raise their prices 20% (the expected tip) without any impact on the customers. McDonalds manages to make profits in EU/AU/NZ/CA etc while (mnostly) complying with local minimum wages and conditions. The Big Mac index shows that their actual prices are within a narrow band compared to the US. They (and other megacorps like Walmart) exploit both their workers and their customers, who end up paying the workers via the inefficient means of tax credits and poverty relief instead of the corporations/businesses being required to pay proper wages and contribute to their local communities via taxation.
  - xyzzyz 5y ago
    > If all restaurants doubled their prices, but, at the same time, paid their employees a proper wage (and made that public) and removed tipping, they could effectively raise their prices 20% (the expected tip) without any impact on the customers. If they doubled they prices, they could increase them by 20%? Huh?
flippertheD 5y ago
Have you ever employed a teenager? They lack life exp. They lack confidence. They really don't know much at all about anything on a professional level. Sometimes you get good ones, but the majority are not sticking around for long or are doing a poor job. Your customers wont return with bad experiences and low quality. College is a scam for most. Put these young kids in debt for most of their life to earn a degree for which they are not even into. Better off going to trade school. And by the way, the lack of labor in skilled trades is astounding right now. Making $20/hr is better than $12/hr, but it's not really going to make a big dent in your college debt. edit: talk to any large employer and ask them about employing the younger generation. All of them will say they have no work ethic and sit on their phones the whole time. You know what else, they think they should be paid $100k/hr and be millionaires...so try managing a bunch of people with that attitude and try not to go crazy. These companies are now reaching out to the older crowd for which they used to discriminate against because the young people suck.
- rswail 5y ago
  > talk to any large employer and ask them about employing the younger generation. All of them will say they have no work ethic and sit on their phones the whole time. “The children now love luxury; they have bad manners, contempt for authority; they show disrespect for elders and love chatter in place of exercise. Children are now tyrants, not the servants of their households. They no longer rise when elders enter the room. They contradict their parents, chatter before company, gobble up dainties at the table, cross their legs, and tyrannize their teachers.” - Socrates
seattle_spring 5y ago
Or they could go to a reasonably priced college for $40k or less and get just as good of a job. $120k is a jokingly high amount of tuition.
- lumost 5y ago
  Reasonable priced such as an in-state university? https://www.umass.edu/financialaid/undergraduate/undergraduate-costs https://www.umass.edu/financialaid/undergraduate/undergradua... In-state: 30,656 * 4 = 122k Out Of State: 51,181 * 4 = 205k
  - deleted 5y ago
    [deleted]
  - seattle_spring 5y ago
    You picked a total outlier, a very prestigious public school in one of the most expensive states. University of Utah, for example, is a relatively good school and costs about $8k / year for in state tuition.
    - lumost 5y ago
      University of Utah costs 23k per year in-state with a total cost of 27k per year including indirect costs. Out of state is 43k/yr excluding indirect costs. If you looked at this 5-10 years ago your numbers were probably right. But interest rates are low and borrowers can borrow far too much money.
      - seattle_spring 5y ago
        Tuition is $9k per semester full time [1]. You're looking at costs that include housing, which someone needs regardless of their status as a student. [1] https://financialaid.utah.edu/tuition-and-fees/cost-of-attendance.php https://financialaid.utah.edu/tuition-and-fees/cost-of-atten...
curryst 5y ago
The inability to pay for college is more an artifact of the insane increase in college prices than it is the pay. Inflation hasn't been kind on minimum wage, but the effect is less drastic than the increase in college prices. Also, as others have pointed out, teenagers tend to be less reliable employees. One part of that is that they don't need the job, at least in an "I might starve and be homeless if I get fired" sense. Another part is that if they're only working for the summer, they're unlikely to have time to become exemplary employees. As a society, I agree it makes sense for teenagers to be able to pay for their own education with reasonable work. As a business, I don't think I would see that as my problem to solve directly, and probably not one I could even afford to fix even if I wanted to. The average in-state tuition in the US (so sticking to the cheaper side) is $10,440/year. There's roughly 10 weeks of summer break, so 400 hours of work assuming a 40 hour work week. You need to make $26/hr after taxes and save every penny of your paycheck to afford that tuition bill. Average out of state tuition is $26,820/year; you'd need to make $67/hr after taxes to pay for that over summer break. Again, those are after-tax numbers, so you'd have to make north of $30/hour pre-tax to be able to pay for in-state tuition. I just don't see that happening.

by lumost 5y ago

xyzzyz 5y ago

> Why shouldn't a teenager make 20 an hour? It's not that he "shouldn't". Rather, many businesses cannot afford to both pay teenage employees $20/h, and also to not raise the prices. Some businesses can raise prices just fine, but others are not able to, as the customers will stop buying at higher price point. For example, if all groceries doubled their food prices, I'd still buy food (though maybe less than before), and likely spend more on it than I used to. However, if all restaurants doubled their prices, I'd pretty much stop eating out altogether, except special occasions.

lumost 5y ago
However if all groceries doubled their prices then all workers would demand higher wages to compensate. Other businesses would need to become more efficient with their labor or reduce margins. In the short-term this means CEOs get paid less, and investors see higher ROI in labor efficient business models. It's obvious that teenagers can't make 1k/hr without breaking the economy - but I don't see any reason why $20/hr would be outside of historic norms. In 1981 the minimum wage was ~$3.25/hr, translating to ~9.71/hr today. Given the advances in technology that have driven a more than 2x increase in real economic productivity over that period why shouldn't the starting wage be $20/hr for teenagers?
- xyzzyz 5y ago
  All workers demand higher wages at all times. Workers demanding higher wages stronger and harder won't raise aggregate wages by much, as there is only so much that is actually being produced, and aggregate wages can pretty much only be increased through increase in aggregate supply: the margins are already pretty thin, especially in retail and food service business, and the CEO pay is pretty small component in grand scheme of things (CEOs also don't actually consume much of their earnings, they invest most of it, so you can't actually transfer much of consumption from them to workers). > Given the advances in technology that have driven a more than 2x increase in real economic productivity over that period why shouldn't the starting wage be $20/hr for teenagers? The growth in economic productivity hasn't been uniformly distributed across industries, and it's been pretty low exactly in the industries depending on cheap, low skill labor. What are the advances in technology between now and 1981 that made restaurants 2x more productive?
  - rswail 5y ago
    > What are the advances in technology between now and 1981 that made restaurants 2x more productive? Microwaves, dishwashers, steam-injection ovens, just-in-time logistics for raw ingredient deliveries, credit cards, online ordering...
    - xyzzyz 5y ago
      Microwaves and dishwashers were popular in commercial environment before 1980, and I don’t think credit cards make a restaurant more productive.
      - lumost 5y ago
        > I don’t think credit cards make a restaurant more productive. They certainly reduce the potential for theft/shrinkage! It used to be that you needed a trusted business manager/employee to manage the register, now anyone can do it and it's much harder for someone to siphon funds. All transactions are now viewable to management to more easily see what's selling and what's not.
        xyzzyz 5y ago
        That’s a good point, haven’t thought of that.
  - lumost 5y ago
    Workers do not demand appropriate wages commensurate with their value at all times. I recall making $7.25/hr and having colleagues "doing well" by making $7.50/hr. At the time it was not uncommon for "good" employers in the service sector to promise something along the lines of a $.25/hr raise every 6 months to a year. Now the problem with this is that the effect is to lower expectations for wages by taking advantage of financial literacy. Someone working for them for 4 years receiving a raise every 6 months earns $2/hr more. The employer/seasoned employees point to this and say that a starting wage $2/hr higher is unreasonable. Unfortunately the fixed rate wage increases diminish over time, and if you think that moving into management/higher level positions would entitle you to more money... then I have a bridge in Brooklyn to sell you. When employers mirror this strategy or take other similar approaches, then you end up with wages that are depressed relative to the value of the labor being provided ( or the opportunity value if that labor was applied to other activities, or used more efficiently ).
rswail 5y ago
If all restaurants doubled their prices, but, at the same time, paid their employees a proper wage (and made that public) and removed tipping, they could effectively raise their prices 20% (the expected tip) without any impact on the customers. McDonalds manages to make profits in EU/AU/NZ/CA etc while (mnostly) complying with local minimum wages and conditions. The Big Mac index shows that their actual prices are within a narrow band compared to the US. They (and other megacorps like Walmart) exploit both their workers and their customers, who end up paying the workers via the inefficient means of tax credits and poverty relief instead of the corporations/businesses being required to pay proper wages and contribute to their local communities via taxation.
- xyzzyz 5y ago
  > If all restaurants doubled their prices, but, at the same time, paid their employees a proper wage (and made that public) and removed tipping, they could effectively raise their prices 20% (the expected tip) without any impact on the customers. If they doubled they prices, they could increase them by 20%? Huh?

flippertheD 5y ago

Have you ever employed a teenager? They lack life exp. They lack confidence. They really don't know much at all about anything on a professional level. Sometimes you get good ones, but the majority are not sticking around for long or are doing a poor job. Your customers wont return with bad experiences and low quality. College is a scam for most. Put these young kids in debt for most of their life to earn a degree for which they are not even into. Better off going to trade school. And by the way, the lack of labor in skilled trades is astounding right now. Making $20/hr is better than $12/hr, but it's not really going to make a big dent in your college debt. edit: talk to any large employer and ask them about employing the younger generation. All of them will say they have no work ethic and sit on their phones the whole time. You know what else, they think they should be paid $100k/hr and be millionaires...so try managing a bunch of people with that attitude and try not to go crazy. These companies are now reaching out to the older crowd for which they used to discriminate against because the young people suck.

rswail 5y ago
> talk to any large employer and ask them about employing the younger generation. All of them will say they have no work ethic and sit on their phones the whole time. “The children now love luxury; they have bad manners, contempt for authority; they show disrespect for elders and love chatter in place of exercise. Children are now tyrants, not the servants of their households. They no longer rise when elders enter the room. They contradict their parents, chatter before company, gobble up dainties at the table, cross their legs, and tyrannize their teachers.” - Socrates

seattle_spring 5y ago

Or they could go to a reasonably priced college for $40k or less and get just as good of a job. $120k is a jokingly high amount of tuition.

lumost 5y ago
Reasonable priced such as an in-state university? https://www.umass.edu/financialaid/undergraduate/undergraduate-costs https://www.umass.edu/financialaid/undergraduate/undergradua... In-state: 30,656 * 4 = 122k Out Of State: 51,181 * 4 = 205k
- deleted 5y ago
  [deleted]
- seattle_spring 5y ago
  You picked a total outlier, a very prestigious public school in one of the most expensive states. University of Utah, for example, is a relatively good school and costs about $8k / year for in state tuition.
  - lumost 5y ago
    University of Utah costs 23k per year in-state with a total cost of 27k per year including indirect costs. Out of state is 43k/yr excluding indirect costs. If you looked at this 5-10 years ago your numbers were probably right. But interest rates are low and borrowers can borrow far too much money.
    - seattle_spring 5y ago
      Tuition is $9k per semester full time [1]. You're looking at costs that include housing, which someone needs regardless of their status as a student. [1] https://financialaid.utah.edu/tuition-and-fees/cost-of-attendance.php https://financialaid.utah.edu/tuition-and-fees/cost-of-atten...

curryst 5y ago

The inability to pay for college is more an artifact of the insane increase in college prices than it is the pay. Inflation hasn't been kind on minimum wage, but the effect is less drastic than the increase in college prices. Also, as others have pointed out, teenagers tend to be less reliable employees. One part of that is that they don't need the job, at least in an "I might starve and be homeless if I get fired" sense. Another part is that if they're only working for the summer, they're unlikely to have time to become exemplary employees. As a society, I agree it makes sense for teenagers to be able to pay for their own education with reasonable work. As a business, I don't think I would see that as my problem to solve directly, and probably not one I could even afford to fix even if I wanted to. The average in-state tuition in the US (so sticking to the cheaper side) is $10,440/year. There's roughly 10 weeks of summer break, so 400 hours of work assuming a 40 hour work week. You need to make $26/hr after taxes and save every penny of your paycheck to afford that tuition bill. Average out of state tuition is $26,820/year; you'd need to make $67/hr after taxes to pay for that over summer break. Again, those are after-tax numbers, so you'd have to make north of $30/hour pre-tax to be able to pay for in-state tuition. I just don't see that happening.