4 ms·
An employer will attempt to pay as little as possible to an employee and then move the potential wage up to the value that an employee in that position would br
by shagie 4y ago
An employer will attempt to pay as little as possible to an employee and then move the potential wage up to the value that an employee in that position would bring.
This is further adjusted to the cost to train an employee in that spot as they'd need to spend that again if they are to replace that employee.
For unskilled works, working in a coffee shop, where training can be done in an afternoon... the teenager has very little bargaining power to move the wage closer to "value they bring".
And that's where the minus wage gets in (I support raising the minimum wage though note that this will have second order effects of making some local coffee shops that are staffed by teenagers unprofitable).
The existing subsidies that are in place regardless of a teenager's employment by virtue of having parents with a place where you can eat and live... and health care (can be on parents' plan until 26) enables the low margin service sector to take advantage of / give employment to people who teenagers and young adults who lack skills to get other jobs (and desire flexibility for school or being a care free young adult).
If you take those subsides away, the service sector won't be able to bargain down / offer jobs at those levels anymore.
The overall unemployment rate is 3.6% which is shockingly low and has been enabling people to get higher wages. The youth unemployment rate, however, is closer to 10% ( https://www.bls.gov/news.release/pdf/youth.pdf https://www.bls.gov/news.release/pdf/youth.pdf and https://www.statista.com/statistics/217429/seasonally-adjusted-monthly-teenage-unemployment-rate-in-the-us/ https://www.statista.com/statistics/217429/seasonally-adjust... ) . There are lots of teenagers out there looking for those unskilled jobs - and thus they have less ability to negotiate for better wages.
If you were to calibrate the amount you need to pay to someone at a coffee shop to the living wage needed by the person who brings in the majority of the income for a household... very few service sector companies could afford that.
The less than living wage, unskilled work, bringing in supplemental income for an individual or household is something that is needed in the overall economy.