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Three key messages for workforce opportunity programs in a world in which minimum wage is rising

  • Joanna
  • June 28, 2016

It shouldn’t be surprising that one of the key messages that resonated with Bernie Sanders’ supporters during the Democratic primary season was the Vermont senator’s proposal to raise the federal minimum wage to $15 an hour. Sanders voters, after all, skewed quite a bit younger than other candidates — and younger Americans are more impacted by the minimum wage. And not just a little more impacted. A lot more. Individuals between the ages of 16 and 24 make up about 12 percent of the U.S. population, but represent more than half of minimum wage earners.

While it’s not an issue that gets everyone excited the way it tends to do for younger Americans, raising the minimum wage is, in fact, a broadly popular idea. Nearly three-quarters of Americans of all ages favor an increase to at least $10.10 an hour — the wage suggested in a proposal that failed get enough support in Congress in 2014.

Why, then, are the nation’s democratically elected representatives so reluctant to heed the desires of their constituents by raising the wage? The historical objection has always been that business owners will be forced to either raise prices or hire fewer people — and while there is no clear consensus on these concerns among economists, the specter alone has been enough to keep the currently Republican-dominated Congress from acting. The other concern is one of political philosophy: More than half of the states in the country have already set a minimum wage that is higher than the federal rate. Clearly, the don’t-raise argument goes, these states don’t need the federal government telling them what to do — they’re already doing it.

One of the far less discussed objections to a minimum wage hike, though, is one that anyone engaged in workforce training opportunities should think about. That’s because it goes to the heart of the life circumstances of the people most likely to be earning minimum wage — that 16-to-24-year-old set.

Even if (like most Americans) you’re OK with the idea of a federally mandated hike, and even if (like hundreds of economists) you believe that there won’t be significant effects on employment if the wage is raised in reasonable increments, it might still behoove you to consider the argument long-held by David Neumark, professor of economics at Michigan State University, and William Wascher, a researcher with the Federal Reserve. They’ve contended that even very small increases in the minimum wage can prompt students to drop out of school — a finding that has been echoed in other studies of the subject. And when Neumark and fellow Michigan State researchers Olena Nizalova re-approached the issue from a longer-term perspective, they found adults who had been teens when a hike took effect in their state suffered negative consequences in both wages and the probability of holding a job more than a decade later.

Why? Labor economics research fellow James Sherk of the Heritage Foundation — a self-acknowledged conservative research think tank in Washington, D.C. — argues that a minimum wage raise “alters the choices that people make” by inducing them to choose low skills jobs over education and to feel financially contented for a longer period of time in jobs that don’t offer significant opportunities for advancement. A parallel argument can certainly be made that a wage hike will similarly leave some people less interested in educational and skills development programs of the sort promoted by the federal Workforce Innovation and Opportunity Act.

Absolutely none of this is to suggest that you shouldn’t support a minimum wage hike if you believe it to be in the best interest of the country — indeed, there’s plenty of contradicting evidence that says it is. It is to suggest, however, that in a world in which minimum wages will be rising in coming years (as, for instance, Oregon’s will be) it may be wise to shift messaging around workforce opportunity programs. How? Here are three ideas:

  1. 1) Programs aimed at younger Americans, especially, shouldn’t be focused on helping people secure better-paying jobs, but rather helping them earn jobs that are a better fit for their lives. That calculation might indeed include money but, especially given what we know about millennials, it makes a lot more sense to sell-up job skills development as a way to secure more flexible and enjoyable jobs, not necessarily ones that simply pay better.
  2. 2) Even in the Obamacare world, more than 30 million Americans still don’t have health insurance. One in three has no money at all saved for retirement. One in four gets no paid vacation time. Initiatives aimed at low-skill workers of all ages, but especially those who aren’t necessarily in the 16-to-24 group, might be more intriguing to their target audience if promoted as a ticket to benefits, rather than better paychecks.
  3. 3) It’s no secret that Americans are shifting jobs more than ever before. And we now live in a world in which very few people of any age expect their current job to be their last one. What this means is that more Americans than ever before are either thinking about how to get a better job or recognizing that, at any moment, their current situation could change. That’s a key messaging opportunity that shouldn’t be missed by organizations that can offer people the chance to “skill up” before their next job shift.