Would Yelp Hire Millennials If It Was Forced to Pay Them a Higher Minimum Wage?
Low-wage jobs are stepping stones for young employees.
A recent college graduate was fired from a San Francisco-based job at Yelp after she published an open letter to the CEO decrying her low pay. She was promptly fired, although Yelp claims the letter had nothing to do with the decision.
The woman, Talia Jane claims she wasn't making enough money to afford life in San Francisco, and that Yelp should be more sympathetic to her situation. Many people are using her story as an excuse to argue that better minimum wage laws would improve the conditions of young workers.
Of course, we know that's not how it works. If Yelp was forced to pay Jane more money than she was worth—well, the company simply wouldn't.
As I argue in a recent op-ed for CNN, millennials should love their low-wage jobs, because low wages allow them to remain competitive with older, more skilled workers:
Millennials may not realize it, but working for low pay is a competitive advantage (and a temporary one). Older workers have more obligations—families to provide for, house payments to make, kids' tuition costs to pay—and can't afford to work for less. Recent graduates can't beat them on raw talent, but they can beat them on price. For hardworking young people who just need to get a foot in the door and gain some experience, the minimum wage is, as Forbes editor John Tamny put it, "a cruel barrier."
The science bears this out. Studies often find that higher minimum wages correspond with decreased youth employment In fact, if the government's explicit goal were to make it harder for young people to compete for jobs, they could scarcely design a more perfect policy.
Read the full thing here.