Contra-Texan: A $15 Minimum Wage Would be Devastating for Younger Students

Contra-Texan is a new column here at the Orator where contributors write a response to a piece in the Daily Texan. This forum is meant to broaden the dialogue and expose students to unconventional wisdom.

In their April 16 piece for the Texan, columnist Abby Springs calls on the University to raise the minimum wage for student workers to $15. The city of Austin recognizes $15 as the local living wage and it is necessary, Springs argues, to pay students this wage. Springs, however, does not consider the effect that this will have on the very students she is trying to help: young students with minimal skills and limited access to the broader job market. Increasing the minimum wage to $15 would shift employment to favor more valuable workers — older students with more job experience — leaving younger students without vehicles stranded on campus.

The textbook objection — the same objection taught in UT economics classes — to an increase in the minimum wage is that it will decrease employment. Recent literature on the subject, however, has thrown considerable shade on this hypothesis. While increasing the minimum wage may or may not decrease total employment, it is well documented that such an increase shifts employment.

As economist Robert Murphy colorfully describes it, increasing the minimum wage might not decrease youth employment, but it means that “rich kids from the suburbs who otherwise wouldn’t have considered the job” now will. If the goal is to help inner-city youth workers, artificially shifting employment away from them seems like a poor way to go about it.

More troubling yet for student workers are the studies showing that minimum wage increases shift employment in favor of higher-skilled workers. This is an intuitive feature of these policies: businesses forced to pay a higher wage will hire more valuable workers.  

Younger students are uniquely susceptible to such shifts towards more valuable workers simply because they have had fewer years to gain relevant job experience. Under the new burden of an increased minimum wage, the University faces the same decision as any other employer: hire a young, untested freshman or a senior who has already proven their worth in the market.

Springs also ignores the costs that come with off-campus jobs, which usually require a vehicle. On the low-end, monthly parking in West Campus can run $100 and, at an extremely charitable $35 per month in other expenses (gas, insurance, maintenance), off-campus workers must work nine hours at $15 an hour to cover the cost of getting to work. They are only willing to do this because off-campus jobs, on average, pay more.

Younger students — who are more likely to live on-campus and not have a vehicle — often cannot access the same broad job market as older, more mobile students. Increasing the University’s student minimum wage to $15 is likely to bring these older students back onto campus for jobs, leaving younger students with no work at all and no prospects for gaining experience.

On one point, Springs is likely correct. For the young students that she is trying to help, “a $15 minimum wage will… ensure students can spend time doing what they’re meant to do: (be) students.” Unemployment certainly does have that effect.

Categories: Campus, Ideas

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