minimum wage – Houghton STAR

Due to New York’s graduated minimum wage increase, student jobs funded by the Federal work-study program are limited to a maximum of eight hours per week on average. The state minimum wage will increase to $9.40 per hour on December 31, 2016, a forty cent increase since the most recent wage hike in December 2015.

The Federal work-study program funds eligible students a yearly limit on earned wages. Students may earn less than their limit, but not more. “Due to an increase in per hour pay, a student will have to work less hours to earn the same amount,” stated Interim Vice President of Enrollment Management, Marianne Loper. Even though the wage increase will not go into effect until the last day of the calendar year, work study wage limits cover both the fall and spring semesters. Thus, if hours were not cut in the fall semester, they would face a more dramatic cut in the spring semester.

The eight hour limit is not to be regarded as a strict limit on hours worked each week- rather, the limit is an eight hour per week average. Loper said, “if some weeks [a student] needs to work 16 hours and then later [that student] works no hours that is fine.”

While the cut in hours will not affect a student’s potential to reach her work-study quota, many students who are employed by the custodial department, the dining hall, the library, and like jobs are scheduled for less than eight hours per week. Some of these students solve this problem by covering available shifts as they come. “I’m scheduled for about six and a half hours per week between the dining hall and the library,” Sarah Vande Brake ‘19 said. “I can usually make up the remaining hours by covering shifts, but if I don’t, then I don’t.”

Another difficulty faces students who participate in the Phone-a-thon, a yearly fundraiser which garners donations and pledges from Houghton College alumni. According to Dana Kelly ‘18, she and other students who agreed to work at the Phone-a-thon for a six-week period had to choose between that and other jobs they committed to. Kelly decided to continue working her shifts at the Campus Center Welcome Desk, yet she says she would have rather done both jobs.

The new regulations have proven stressful for supervisors as well. Previously, more jobs could be assigned to fewer workers. Now, the shifts must be spread more evenly. Custodian Hillary Scharles, who manages the Campus Center and part of Gillette Hall, expressed worry that she would not be able to find enough student workers to cover all of the available jobs in her buildings.

There is a silver lining, however. Because even the most industrious of student workers can now only work an average of eight hours per week, this leaves more employment opportunities open to students. Students who would not have planned to max out their potential hours may be interested in picking up these stray shifts.

A growing number of Americans, academics, and politicians herald a rise in minimum wage as a solution to fight poverty. The concept seems simple, politicians agree what is a livable minimum wage and it becomes the law of the land. However, government solutions to economics typically resemble Don Quixote tilting at windmills.

While politicians may concoct a faux pas minimum or living wage, real wages are determined by a marketplace, not the government. As economist Paul Krugman once remarked, “Wages are a market price—determined by supply and demand, the same as the price of apples or coal.” In capitalist societies, corporations will pay dearly for specific skills or if labor is in short supply. Just ask Wal-Mart workers in Wilston, North Dakota who start at $17.40 an hour.

Now that government sets the minimum wage, employers must decide if the wage, benefits, taxes and training are worth the value of the task at hand. People with no experience or no diploma find it hard to enter the workforce. They are impeded from opportunity of economic mobility into future, better jobs. You won’t move up the ladder if you can’t get on the ladder.

Minimum wage not only shrinks job market perspectives, but also has a weak correlation to low wage workers and poverty, according to U.S. Census Bureau data. Economist Joseph Sabia found minimum wage increases on both the state and federal level between 2003 and 2007 “had no effect on state poverty rates.” According to Michael Strain of the American Enterprise Institute, “Less than 3% of hourly wage earners over the age of 24 earn at or below the federal minimum.” Most minimum wage earners are teenagers who are seeking work experience. These same teens face a 24% unemployment rate. It could be argued that high school and college workers with the need for experience should forgo any minimum wage. In the past, college students voluntarily traded labor for the experience gained from internship.

I discovered how differently fast food restaurants were operated while travelling around Europe playing baseball this summer. At a McDonald’s in La Rochelle, France, there was no counter person taking orders, instead it was a computer. Why would an American corporation be more technologically advanced in France than in their domestic franchises? I asked a French worker, who said McDonald’s found it more economically feasible to buy an expensive computer system rather than pay France’s minimum wage of $12.09 plus a multitude of benefits and payroll taxes gifted by French politicians.

When labor is costly and can be replaced by machines, most businesses invest in capital intensive systems. Even in the US, we are now witnessing technology replace the demand for workers. Check out your local bank with half the amount of tellers as it had ten years ago. Home Depot has automated cashiers. At Applebee’s, your “Neighborhood Grill and Bar,” don’t expect Flo, your favorite, neighborly waitress, to take your nachos order in the future. “Presto”—the tablet computer—has secretly been added to your table, next to the salt and pepper shakers. Since Presto works for free, should we tip Presto more than the customary 15%?

Small businesses are the engine of our economy. There should be little or no regulation on them, so long as it does not affect the safety of their employees or the public. Small businesses are typically underfunded and unable to immediately buy systems to replace people. In fact, these businesses can thrive by giving a human-touch experience versus their larger counterparts. However, the more we increase and mandate minimum wages and fringe benefits, once negotiated privately by consenting adults, the more we increase the problems we see in France. George W. Bush once quipped, “The trouble with the French is that they don’t have a word for entrepreneur.” If we keep on passing minimum wage laws, this country might not have a word for enterprise.