President Obama last week recalled the lessons he learned working in an ice-cream shop as a young man, and called on other employers to “create summer job opportunities for young people who need them, and extend those opportunities throughout the year.”
It’s a worthwhile goal — with one problem: Who’s going to pay a $15 starting wage to hire these kids for that entry-level job? That’s a question both President Obama and Gov. Cuomo must answer as they champion labor unions’ extreme wage demands.
The president laments that “landing that first job is all too difficult for students,” and he’s right — especially in New York. The state’s unemployment rate in 2015 was identical to the federal rate of 5.3 percent.
But New York’s youth unemployment rate was more than four percentage points higher than the federal average. Statewide, more than 20 percent of the young adults who want to work can’t get hired; in New York City, that number rises to one in three.
New York teens already had a hard enough time finding work due to a troubled economy in certain parts of the state and starter wage requirements set above the federal level. This year, however, the carnage in the entry-level job market has really begun to explode, with a $2.50-per-hour wage hike enacted for full-service restaurants and a rapid phase-in of the new $15 requirement for fast-food restaurants.
Unsurprisingly, small-business operators have responded by finding other ways to reduce their labor costs. Longway’s Diner in upstate New York is no longer a 24/7 establishment, and two employees lost their jobs when the night shift went away.
In New York City, one P.J. Clarke’s location is no longer hiring young people to bus tables, relying on servers to do the job instead.
Patrick Pipino, a Ben & Jerry’s franchisee in Saratoga Springs, told the Daily Gazette that, with a $15 starting wage, there’s “a whole underclass of jobs for high-school and college kids that’s going to go away.”
The irony appears to be lost on Obama that the job he used to take his first step on the career ladder will now be eliminated thanks to a public policy he’s championing.
The dollars-and-cents consequences of missing out are clear: Economists from the University of Virginia and Middle Tennessee State University found that those with part-time work experience in high school earned about 20 percent more annually a decade after graduation, compared to those who didn’t work. More troubling, an analysis from economists at Welch Consulting and the University of North Carolina found that teens who are unemployed today are more likely to be unemployed in the future.
Cuomo, now barnstorming the state in an RV paid for by his union allies, continues to insist that his $15 minimum-wage plan is “not going to cost jobs.” It was never a credible argument: Nearly three-quarters of labor economists surveyed by the University of New Hampshire oppose a broad $15 mandate for that very reason.
But the governor looks even more oblivious now that job losses from the state’s current minimum-wage levels are being documented in local papers.
Of course, neither Obama nor Cuomo has much to worry about: The president’s next book deal should provide a comfortable seven- or eight-figure retirement package, while Cuomo looks to fill the top job himself a few years down the line.
Meanwhile, the young people who themselves might have aspired to higher office are left with a career ladder that’s missing the lowest rungs.
Michael Saltsman is research director at the Employment Policies Institute, which receives support from businesses, foundations and individuals.