4-17-14 – Shayne Spence Minimum Wage Testimony Before Senate Economic Development Committee

I’m not going to tell you about the negative impacts a minimum wage increase will have on businesses, because I know you’ve all heard it before, and I don’t think that will change any of your minds.  Instead I want to talk about this policy’s devastating effect on young people, and how that translates to more generational poverty.

The minimum wage set by this body only applies if an employer will actually hire you.  The real minimum wage is $0, because that’s what you get when you’re priced out of the market.  In order to be hired, you have to convince an employer that you are worth the wage they pay you.  This is not a problem for workers with resumes, but for young people, it essentially removes the first few rungs on the economic ladder.  We heard yesterday from several folks who waited to work until they were 17 and 18, when they were moving out, buying cars, and paying their own bills, all for the first time.  Working minimum wage jobs, along with being enticed into significant amounts of student loan and credit card debt, while learning how to manage a budget proves to be too much for many people, and they fall behind, and get stuck in a cycle of poverty.

By removing the wage floor above young people’s heads, you allow them to get vital work experience before they are off on their own.  When they are 18 and starting to live on their own, they will not have to work for the minimum wage, because employers will have a work record to base hiring decisions on.  Ask any business owner.  If they know you will show up to work on time, work hard, and be reliable, they will hire you for a higher wage.

I worked for three and a half years at McDonalds, starting when I was 15 years old, for minimum wage nearly the entire time.  I was fine with this, because for much of that time I was living with my parents, and when that income wasn’t enough when I moved out, I got another job to pay the bills.  But what always struck me was that people who were hired at the same time as me, but were able to do much more for the restaurant because of labor laws and insurance policies, were paid the same hourly wage.

One woman was a way over-qualified mother of two who had been hit hard by the recession, and had to resort to a minimum wage job to help stay afloat.  Because the minimum wage law forced McDonald’s to pay me, a 15 year old living at home, much more than I was worth, it took resources that could have given her a much-needed pay raise.  I would gladly have worked for $5 or $6 an hour, because I had no bills to pay.  All I needed money for was taking girls on dates and saving for a car.  She needed to pay her mortgage and save so her son could go to college.  But the minimum wage forced McDonald’s to employ us at the same rate.

And I was lucky to even have a job.  Until I was 17, I was the only one in my group of friends who had a job, which you can imagine was a little annoying.  But this has led to more than annoyance for those friends.  Many of them are still working the same minimum wage jobs, or are only just getting above that.  When they were in high school, and limited in the number of hours they can work and availability at peak hours, employers decided against employing them for the minimum wage, knowing their money would be better spent on someone who could do more.  When they finally started working, they had a car to buy, rent to pay, groceries to pay for, and they simply got stuck.

We have heard some very compelling stories this session about families struggling to get by, and I understand the urge to help however you can.  But the answer is not to increase the hiring floor, and remove those first few rungs of the ladder.  In fact, I would suggest that you go the other way, and provide an exemption in the minimum wage for those below 18.  This is the model that the United Kingdom follows, with a tiered minimum wage for those under the age of majority.  I am also encouraged by discussion about expanding the Earned Income Tax Credit, as I believe the best way to put more money in people’s pockets is by letting keep what they earn.

But the committee also has to realize any minimum wage increase would be fighting against the current.  In addition to any inflation caused by the minimum wage increase and relative cost increases, the purchasing power of the U.S. dollar has been decreasing steadily for many years.  In 1963, the minimum wage was $1.25, five silver quarters.  Today, the melt value of those same five quarters is over $26.  It isn’t a problem with the minimum wage.  It is a problem with the continued devaluation of our currency, and forcing businesses to pay an inflation tax isn’t going to help economic development in Vermont.

{ 8 comments… read them below or add one }

David Bresett April 18, 2014 at 7:27 pm

More bullshit than I’ve ever heard anywhere. Minimum wage raised to $15 an hour would be a start. Young people are the first to get screwed out of this stupid idea. Anyone that pays somebody minimum wage is simply saying they’d pay you less, but the law won’t let them. There is no excuse for paying anybody crap wages, for any reason. The fact that you’re testifying against raising the minimum wage says your a hateful person and a cheap bastard.

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Shayne April 19, 2014 at 1:58 am

Did you by any chance, I don’t know, read my testimony? I talk about how I worked a minimum wage job when I was 15, and I realized that I was making more than my labor was worth. And I thought it was wrong that I was making more than I should and the mother of two who was forced out of retirement was barely scraping by. And guess what, it was the minimum wage that stole resources from her and redistributed them to me.
I think you’re the hateful person, David, in fact, I’ve never met anyone with such an unhealthy obsession with spewing hate towards other people. If you want to have a debate about policy, feel free to comment, but if you’re going to call names and use vulgar language, please keep it off our page.

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David Bresett April 21, 2014 at 1:20 pm

Who cares what you got paid. Your testimony is based on what you are fed. Typical of all right wing hate mechanisms. The evidence is too the contrary of what you testified. I think the hate comes from you understanding hate. I am one of the most loving people you could ever meet. The fact that you see me through other peoples eyes is you problem. Here’s hoping your career in lies fails.
The vulgar language is something you most understand. Don’t act like a priest, you are more aligned with the other side of that coin.

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Peg April 22, 2014 at 7:57 pm

If this person is the most loving person we will ever meet, than Hitler’s Germany for the Jews was the epitome of “love thy neighbor.” We should pray that this great burden of hate is lifted from him……….then STOP the senseless banter. You will not change his mind. He hates because he can.

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David Bresett April 23, 2014 at 7:05 pm

Peg you are an obvious libertarian that could never be convinced that this is wrong. I would someday like to meet you people in person to see just how good you are in person with your opinions. I see that you can’t get past your spoon feeding from this extreme right wing group trolling our state. good luck to you Frehlein.

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Mike W. April 20, 2014 at 9:43 am

Ok lets all pay $10.00 for a $1.00 hamburger.

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Peg April 19, 2014 at 3:33 pm

People who will attack with a “bad attitude” are trying to hide their frustrations at not getting something by “demand.” The bad attitude speaks to me that someone feels entitled to something they haven’t proven worked for or earned by proving their abilities. Where do these “entitlement” folks think the money comes from for wages? Would these same “entitlement” folks think they are entitled to a college GPA of 4.0 if they did not earn it? Do they think they could take away the GPA from a student who studies and works hard? Do these “entitlement” folks get better grades just because they want it? What if the tables were turned and YOUR college GPA was given to someone who didn’t even attend college, but was a high school dropout?
I have always prided myself on my ability to improve my skills to increase my personal satisfaction and be proud of my accomplishments.
Where is the reward for doing a good job, being trustworthy or diligent if you are given something of value without earning it? Where is the personal pride of a job well done?

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Robert Lefebvre April 19, 2014 at 3:51 pm

I must agree with the above article. I started working on farms, $0.25 per hour part time, (when someone needed help, not regular). Summer time $25.00 per week since I new how to operate trucks and farm equipment, At 13 years old I was lucky to be able to do so much.
But of course that was before Big Government stepped in and forced us with age limit, regardless of one’s ability. After high school I was lucky due to my experience to get a job at American Cyanimid where they allow me to get over $3.00 per hr. But that lasted only three months and I got lay off due economy slow down. So in late 1959 with economy slowing down I was forced to start over again at minimum wages. I did work my way back up but it wasn’t easy, it took 9 months before I was called back and then where I was working raised my wages so that I stay.
So, if ones learns and prove himself/herself one can make it.
So what I am trying to say is ‘any one deserves a living wage, but if there is no work what good is it? And anyone in business knows that one can’t pay more then is being produced without going bankrupt.’. Look back at the Auto Industry, no one thought it it would ever happened, but it did and now we are all paying for it in taxes. Dictatorship hasn’t work anywhere that I know of. I’ve only been around for over 3/4 of a century, but I read history and seen many things happened in those years. As I’ve been mentioning for over 20 years, ‘if government doesn’t change there will be another Tea Party’, and I hope it is not as bloody as it was almost a century and a half ago’. When the government forget to abide by the the Constitution nothing good will come out of it. If one studies world history we see the same thing happening. Take a good look around, we are at the point where disobedience against the Law of Nature is worst now than it was at the time of Noah, and so is Nature disasters. Let’s get back to the basics of the oldest law known to men, which is what the US Constitution, when instituted, was based on. We might get back to prosperity and decency if we ever go back to those basics.
Rather than we trying to dictate, we should let demand and commons sense regulate. When the need is there wages will rise in order to provide able help to produce. But one need to learn to work and perform in order to get it, just putting time in doesn’t create income so that employers can afford an employee.
Robert Lefebvre

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