Minimum wage opportunities
As a tool to help people who are struggling to get by, an increase to the minimum wage is a double-edged sword. It helps some workers with an increase in their pay, but it also hurts some, as certain jobs, or ways of doing a job become uneconomic. As the minimum wage increases, it costs more for some employers to keep paying their staff, meaning they have to reduce the number of staff they pay, or ensure the existing staff are more productive, to increase revenue. This often means that younger, less experienced people will be replaced with someone more experienced, or in extreme cases, a human job will be replaced with a machine.
Think about the last time you scanned your own items at the supermarket, did your own banking, or pumped your own gas. You may be a teacher, a farmer, a student, or full-time parent, but at that moment you became an unpaid–and therefore very efficient–checkout operator, bank teller, or gas station attendant.
Low wage jobs are squeezed out of the market as the minimum wage continues to increase. This is bad news for our job market, as many low wage jobs are crucial entry points for people who are just starting out. As a young man I delivered pamphlets, then newspapers, then progressed to work at the supermarket. I learned a lot. While I knew I was at the bottom of the wage ladder, I had been given a shot to learn about what it meant to be productive.
I learnt that you needed to turn up on time and actually do what you were paid to do. I learnt how to value the things I wanted by how long it would take to earn the money to buy it myself. I also learnt that certain types of work are very hard, and are not well paid. In other words, it was worth putting an effort in at school. I was gaining experience and shaping the way I viewed the world, work, and study.
I also learnt that I was easily substituted for other workers. While I agree that small increases in the minimum wage might not lead to net employment losses or even slow the growth in jobs, it can certainly change the distribution of those succeeding in finding or staying in work. The youngest and most vulnerable often find themselves substituted for slightly older and more experienced workers.
Young workers are certainly not the only ones to consider when talking about the minimum wage. There are workers of all ages who earn the minimum wage, or just above it, and businesses and the government must ensure they are empowered to provide for themselves and their families. At the same time we cannot forget that many of the most vulnerable need the opportunity to enter the labour market at an early age. Our minimum wage provisions shouldn’t stand in the way of this.