From the comments about the $4.25 training wage, small businesses exemptions, and more

Someone commenting wasn't convinced about the minimum wage/unemployment link I mentioned in my recent post on teenagers and the unemployment rate.  Let's look through the arguments:

Argument 1 by Jim:

In states that have minimum wages that mirrow the federal minimum wage those under 20 years of age can be pay only 4.25 hour for the first 90 days their employed. Its a training wage so to speak yet the unemployment rate for teenagers in these states is not that low. Companies should be falling over each other to hire teenagers if they are only required to pay them 4.25 an hour for their first nindy days of employment.

My response:

A training wage is good, but there are problems.  After 90 days, you have to pay them the minimum wage.  Unless the firm can train quickly or has huge worker turnover, it won't be too helpful.  I don't know the law, but I suspect firms would be in trouble (legally) if they only hired people for 3 months to take advantage of a training wage law.

Argument 2 by Jim:

Companies that are doing under five hundred thousand dollars in annual sales are exempt from the minimum wage. And that five hundred thousand figure includes the majority of small business. It really bothers me whanever theirs a debate about the minimum wage that these facts are never brought up.

My response:

While I don't know the percentage of businesses that are exempt, a $500,000 annual sales cap would exclude virtually every single fast food restaurant nationwide.  The majority of businesses does not mean the majority of those hires for the minimum wage.  What percent of sub $10/hour jobs go to these firms?  3%?  5%?  


Argument 3 by Jim:

Another thing its generally not that big a deal if you had a job at mcdonald's when you went to high school. If someone has the skills when they leave collage or some tech school when they are being considered for the job I do not believe that the interviewer is really all that concerned about whether or not they worked at a Mcdonald's when they were in high school. Their a lot more concerned about what they took when they went to school. Another thing high students that do not have a job flipping hamburgers when their in high school generally perform better in school get better grades are less likely to drop out of school than their hambuger flipping peers.

My response:

The skills you gain when at a fast food restaurant are very valuable.  An employer may not ask about McDonalds, but they want someone who knows how to show up daily to work, can deal with customers and bosses, understands finances, and basically is a responsible human being.  I gained a number of these skills when I worked at a fast food restaurant.

I see man students today who've never had a job where they earned a paycheck before college.  They're not all lazy, but you can tell a difference.  There's something about those who know how to hold down a job at a young age - it's a good skill to learn before graduating from college.

About the last statement: I'm not sure whether those who have jobs "flipping burgers" really get worse grades.  I doubt it, but even if so we should remember that correlation does not equal causation.  Lots of other factor ps could be going on.