OPINION:
Customers at the new San Francisco McDonald’s on Sutter Street are greeted not with a friendly smile but with the impersonal glare of two human-sized electronic tablets ready to take their order. Not coincidentally, San Francisco’s minimum wage increased to $12.25 an hour earlier this month. The city has long had one of the highest wage floors in the country.
These automated ordering systems are a stark reminder that employers can automate jobs when the cost of entry-level service employees becomes higher than what consumers are willing to pay for that service. Employers don’t do this because they’re unkind; business is a Darwinian struggle where only those who can control costs to maintain their often razor-thin profit margins can survive.
The reduced job opportunities that come as a result of these cost-cutting measures disproportionately impact society’s most vulnerable. The academic evidence clearly shows minimum wage hikes price some of these less-skilled employees out of the job market entirely.
This has been observed for decades. Franklin Roosevelt’s Secretary of Labor Frances Perkins reported to the president in 1939 that “workers who had been receiving less than [the new minimum wage] had been laid off and replaced by more efficient workers.” This phenomenon has continued through the years: Today, employees are increasingly being replaced by customer self-service and automation.
The minimum wage debate is more than just an argument about where wages should be set. It’s about how the minimum wage cuts off the all-important bottom rung of the career ladder for those who need it most. President Obama and progressives love to talk about the importance of “good jobs.” But you can’t get a good job unless you have a first job.
A growing body of academic research confirms the importance of first jobs for future career success. In a recent study, economists from the University of Virginia and Middle Tennessee State University found that part-time work by young adults translates to future career benefits that include higher hourly wages, increased annual earnings, and less time spent out of work. They found this wage premium persisting for decades.
It’s not difficult to see why. While ivory tower elitists may look down on the experience gained at first jobs cooking burgers or bagging groceries, it’s clear that these employees pick up soft skills that are valued by employers. Often referred to as the “invisible curriculum” learned on the job, they include time management, work ethics and interpersonal skills that are needed to succeed at any job. Being required to show up on time for every shift and learning seemingly simple workplace disciplines are often what helps young people understand what the market requires for basic success.
Lost in the celebratory back-slapping over the reduction of the top-line unemployment rate is the fact that teen unemployment remains at 17.1 percent and black teen unemployment at 27.5 percent. In Baltimore where the recent protests took place, the youth unemployment rate is even worse.
With this subterranean jobs crisis going on, lawmakers should be focusing on policies that help these people get into the labor market, not creating additional barriers to employment by raising the minimum wage. Consider, if you don’t get a job by the time you are 19, what are the chances you get hired when you’re 20?
Actor James Franco gave a personal explanation of the value of early career employment in a Washington Post op-ed last week. He explained how he was able to get a job at McDonald’s on the same day he applied, helping him when he needed it the most. “Just like their food,” he wrote, “the job was more available there than anywhere else.”
In a few months, Mr. Franco moved on to bigger and better things. So do most minimum wage employees. Research by economists at Miami University and Florida State University show that nearly two-thirds of minimum wage employees earn a raise within their first one to 12 months on the job.
It goes without saying that these raises aren’t available to those who couldn’t first get hired at any wage.
• Rick Berman is president of Berman and Co., a Washington public affairs firm.
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