I just came back from California, where starter wage mandates are wreaking havoc on the entry-level job market. I took a video of five kiosk ordering screens in a Taco Bell. You order, pay, pick up your food and a self-pour soda cup without ever having to talk to anyone.
These are jobs that used to belong to starter employees. While the country’s broader labor market is currently strong, the youth employment rate remains in crisis territory, with fewer than one in three holding a job. In California that figure falls to fewer than one in four.
If you want to know why the job market has quickly become an employment desert for young people, look no further than the stupidity of the Service Employees International Union (SEIU). Low economics IQ coupled with millions of dollars in forced member dues to fund public relations campaigns to influence equally complicit legislators have resulted in dramatic minimum wage increases in the $12 to $15 range affecting roughly half the country by population. These are wage hikes that cannot be passed on in price increases. (See the job loss consequences at Facesof15.com.)
The union officials admitted that their wet-finger-in-the-wind economic analysis for a $15 mandate amounted to “10 was too low and 20 was too high.” Even serious economists from the Clinton and Obama administrations have divorced themselves from supporting these mandated starter job wage rates.
The second problem with what passed for union thinking on the minimum wage was the conceit that businesses had no choice but to pay these higher wage rates because unlike manufacturing, the service industry can’t offshore jobs. Obviously, the term “self-service” never occurred to them.
In addition to the five kiosks I saw this past week, I came home to see stories of “Flippy” – the new burger-flipping robot that’s being introduced. CaliBurger plans to use Flippies at all its 50 global locations by the end of 2019. Eatsa, a fully automated restaurant concept with five locations all in places that have passed $15 minimum wages, has no employees in sight. As The Washington Post reports, “The first thing you’ll notice when you walk in is the remarkable lack of employees.”
In the world of dramatic minimum wage increases, such technology that has an expensive upfront cost has become an attractive alternative if a business is going to keep its price-sensitive consumers. It has become obvious to market analysts that people will trade service to get lower prices. As the country ages, fewer people remember when someone else filled our car gas tank. (It was my weekend starter job in high school.)
Over time, our collective memory will no longer remember cashiers in grocery stores, movie ticket sellers or toll booth collectors. Smug elitists who suggest these positions are not worth having because they are not “good jobs,” need to remember that not everyone has the benefit of a college education and parents who read to them.
“Why shouldn’t we in fact accept job loss?” asks New School economics and urban policy professor David Howell. “What’s so bad about getting rid of crappy jobs ?” Easy for him to say. Let’s start with eliminating his crappy job proselytizing socialist policies supported by taxpaying capitalists.
These jobs were filled by people who want them over whatever alternative they have. It could be the need for scheduling flexibility, the need for part-time work or the chance to prove their worth after getting their “foot in the door.” Over 1,500 kids drop out of high school every day. They previously found work in factories, construction or transportation. Those jobs are generally made available to someone with a record of workforce attachment. Remove starter jobs from the employment market and the result should seem obvious.
It’s clear that not enough of the political class has gotten the memo about how they are wrecking the lives of so many by setting them up for permanent positions on the job market sidelines while opportunities to gain experience disappear or are no longer created. Research from economists at University of Virginia and Middle Tennessee State University finds that those with early-career work experience can expect to earn 20 percent more later in their careers.
Just because Barack Obama can get his daughter a prestigious internship with Hollywood legend Harvey Weinstein doesn’t mean the average youth has similar starter opportunities – or any opportunity.
So if you’re a young person who can’t get a starter job, download a picture of SEIU President Mary Kay Henry from their website. Put it next to your faded poster of Barack Obama in your bedroom you’ve had since grade school, and when you get frustrated looking for work after multiple applications you can reflect on the geniuses who are responsible.