Study: Higher minimum wages hurt teen employment, adult paychecks

A new study links the nation’s declining number of teenage workers to how much businesses are required to pay them under minimum wage laws.

The report from the Mercatus Center at George Mason University explored why 16- and 17-year-olds had dropped out of the workforce in such great numbers since 2000. Among the factors was a larger workforce due to immigration and the pressures on upperclassmen to perform academically while maintaining a résumé of extracurriculars.

Increases in minimum wages appeared to be the most significant factor in pushing teens out of the workforce, researchers found.

“It seems to just be diminished work opportunities,” said David Neumark, economics professor at University of California-Irvine and the author of the study. “They are more likely to just be in high school.”

The study also found the average teen worker pay increased at a slower rate if they were raised in states and municipalities with higher minimum wage requirements. Neumark says it would be impossible to prove, but he suspects less opportunity and employers cutting back on training to mitigate higher wages are causes that lead to the lower wages down the road.

The argument for minimum wage increases took Illinois’ center stage last summer when Gov. Bruce Rauner vetoed legislation that eventually would have increased the state’s wage requirement to $15 an hour with some exceptions. The General Assembly didn’t have the votes to override the veto.

In his veto message, Rauner cited a Washington University study showing an increase of Seattle’s minimum wage to $13 an hour led to job cuts and hour reductions for workers, which corresponds with Neumark’s conclusions.

“We want to focus the conversation on the effects of policies like minimum wage hikes on the long-term effects, not just the short-term,” he said.

Carbondale businessman George Sheffer said his hardware store would have laid off workers had the minimum wage been raised to $15.

“The more you raise the wage the more you’ll need to cut out in terms of jobs happening there,” he said.

Carbondale’s median wage was less than $13.61 a hour in 2016, according to the Illinois Department of Employment Security. The median entry-level position paid $9.36 a hour.

A number of Illinois’ Democratic candidates for governor have supported raising the minimum wage to $15 a hour. State Sen. Daniel Biss, who’s been gaining in the polls in recent weeks, was a sponsor of the minimum wage bill from last year.

The state’s current minimum wage is $8.25 for non-tip employees such as wait staff. That’s $1 more than the national level set in 2009. Eighteen states saw local increases this year. Cook County’s wage requirement is $12 per hour and will be $13 next year, increasing with the rate of inflation thereafter.