America needs a learning wage. Yes, a learning wage.
What is a learning wage? As opposed to a living wage, which is typically seen as $15 per hour, a learning wage is when you make the minimum wage $0 per hour. So why would we want this?
Let's first talk about why we wouldn't want a minimum wage at all. Everyone needs skills to succeed in life, and the best way to acquire skills is through work. Gaining work experience is as valuable, if not more so, than a college degree. And the more skills/better skills you have, the more you get paid. Skills act as a ladder. The higher up you climb, the more you get paid. How do minimum wages--including $15 minimum wages like the one in LA--relate to the ladder? Employers only hire people who are productive. Say being a cashier is worth $10 per hour to a small business. The business cannot pay $10; that would mean no profit for the owner. The business cannot pay $15; that would mean hiring that person causes a net loss. But they could pay $7.25, pay the worker, and make profit at the same time. But if we had a living wage you would be pricing someone out of the market. You saw off the rungs of the ladder, and those not tall enough (or, in this case, productive enough) have no chance of climbing that ladder.
That is why we want a learning wage and also why we *don't* want a living wage. Living wages make it impossible for unskilled teenagers or impoverished minorities to get a job and acquire skills. A learning wage is the opposite: everyone, no matter their skill set, can get skills and learn their trade. The more they learn, the more they earn. A living wage makes them unemployable and, sadly, that makes their lives much more difficult. They are destined to live a life of dependency; living on government assistance. That is not how we reduce poverty. A learning wage would allow those people to get jobs and earn more money than they started out with. The wage they start with may be low, but it would increase overtime.
Liberals will respond: how do you know they will get higher wages? Evil capitalists! Well, here is how we know: it is already happening. For those who do get hired, despite the minimum wage being above zero, people usually do get paid more within 12 months of employment. According to one study, two thirds of those who are paid minimum wage receive a wage increase after working for 12 months. Further, according to the BLS, only 4.7% of the workforce above 16 years of age earned at or below the Federal minimum wage of $7.25. Why is this important? When I discuss lowering--or even abolishing--the minimum wage to create a learning wage, it is *always* argued that employers will pay as little as possible, maybe even nothing, if we abolished a minimum wage. But the BLS statistics and the previous study refute that. If only 4.7% of the workforce earn minimum wage, that means 95.3% of the population earns *above* $7.25 per hour--so businesses already voluntarily pay MORE than the minimum amount required. If businesses arbitrarily paid as little as possible, then there should (1) be no wage increases after one year--there usually are, and (2) everyone would be paid minimum wage! But the fact that the vast majority of people make above the minimum tells us that businesses don't always pay as little as possible. If a worker is valuable, they want to keep that worker (or, in many cases, hire them). Other businesses compete with higher wages and, if one business cannot pay enough, the worker will leave to the job which he or she thinks best compensates their productivity. So, no, employers wouldn't pay slave wages with a learning wage; all it would do is make it easier for the poor, who are now (or will be, if the minimum wage is raised) priced out of the labor force.
America needs a learning wage. Allowing teenagers and the impoverished to learn their trades, which mean higher wages and better lives, is the best way to truly help the poor.
What is a learning wage? As opposed to a living wage, which is typically seen as $15 per hour, a learning wage is when you make the minimum wage $0 per hour. So why would we want this?
Let's first talk about why we wouldn't want a minimum wage at all. Everyone needs skills to succeed in life, and the best way to acquire skills is through work. Gaining work experience is as valuable, if not more so, than a college degree. And the more skills/better skills you have, the more you get paid. Skills act as a ladder. The higher up you climb, the more you get paid. How do minimum wages--including $15 minimum wages like the one in LA--relate to the ladder? Employers only hire people who are productive. Say being a cashier is worth $10 per hour to a small business. The business cannot pay $10; that would mean no profit for the owner. The business cannot pay $15; that would mean hiring that person causes a net loss. But they could pay $7.25, pay the worker, and make profit at the same time. But if we had a living wage you would be pricing someone out of the market. You saw off the rungs of the ladder, and those not tall enough (or, in this case, productive enough) have no chance of climbing that ladder.
That is why we want a learning wage and also why we *don't* want a living wage. Living wages make it impossible for unskilled teenagers or impoverished minorities to get a job and acquire skills. A learning wage is the opposite: everyone, no matter their skill set, can get skills and learn their trade. The more they learn, the more they earn. A living wage makes them unemployable and, sadly, that makes their lives much more difficult. They are destined to live a life of dependency; living on government assistance. That is not how we reduce poverty. A learning wage would allow those people to get jobs and earn more money than they started out with. The wage they start with may be low, but it would increase overtime.
Liberals will respond: how do you know they will get higher wages? Evil capitalists! Well, here is how we know: it is already happening. For those who do get hired, despite the minimum wage being above zero, people usually do get paid more within 12 months of employment. According to one study, two thirds of those who are paid minimum wage receive a wage increase after working for 12 months. Further, according to the BLS, only 4.7% of the workforce above 16 years of age earned at or below the Federal minimum wage of $7.25. Why is this important? When I discuss lowering--or even abolishing--the minimum wage to create a learning wage, it is *always* argued that employers will pay as little as possible, maybe even nothing, if we abolished a minimum wage. But the BLS statistics and the previous study refute that. If only 4.7% of the workforce earn minimum wage, that means 95.3% of the population earns *above* $7.25 per hour--so businesses already voluntarily pay MORE than the minimum amount required. If businesses arbitrarily paid as little as possible, then there should (1) be no wage increases after one year--there usually are, and (2) everyone would be paid minimum wage! But the fact that the vast majority of people make above the minimum tells us that businesses don't always pay as little as possible. If a worker is valuable, they want to keep that worker (or, in many cases, hire them). Other businesses compete with higher wages and, if one business cannot pay enough, the worker will leave to the job which he or she thinks best compensates their productivity. So, no, employers wouldn't pay slave wages with a learning wage; all it would do is make it easier for the poor, who are now (or will be, if the minimum wage is raised) priced out of the labor force.
America needs a learning wage. Allowing teenagers and the impoverished to learn their trades, which mean higher wages and better lives, is the best way to truly help the poor.
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