If you force employers to pay wages higher than their market will bear, they will cut back on employment opportunities. It was intuitively obvious before the new Congress mandated a minimum wage increase, and in Arizona, you can see what happens when mandated wage increases go from theory to fact:
Oh, for the days when Arizona’s high school students could roll pizza dough, sweep up sticky floors in theaters or scoop ice cream without worrying about ballot initiatives affecting their earning power.
That’s certainly not the case under the state’s new minimum-wage law that went into effect last month.
Some Valley employers, especially those in the food industry, say payroll budgets have risen so much that they’re cutting hours, instituting hiring freezes and laying off employees.
And teens are among the first workers to go.
Companies maintain the new wage was raised to $6.75 per hour from $5.15 per hour to help the breadwinners in working-poor families. Teens typically have other means of support.
Mark Messner, owner of Pepi’s Pizza in south Phoenix, estimates he has employed more than 2,000 high school students since 1990. But he plans to lay off three teenage workers and decrease hours worked by others. Of his 25-person workforce, roughly 75 percent are in high school.
“I’ve had to go to some of my kids and say, ‘Look, my payroll just increased 13 percent,’ ” he said. ” ‘Sorry, I don’t have any hours for you.’ ”
Messner’s monthly cost to train an employee has jumped from $440 to $580 as the turnover rate remains high.
I’ll be the first to admit that it’s true that teenagers don’t usually need jobs for life’s basics, such as food, shelter or clothing. However, I suspect that, while they’ll be the first to go, they won’t be the last. The next to go will be the next tier of low wage workers — probably immigrants who are in fact struggling to hold a family together — a family that may have included a teenager whose wages made the difference between family stability and family disaster.
Hat tip: Drudge Report