How Minimum Wage Affects Young People

Written By:

Joseph Sweeney

Publishing Date: 

September 20, 2021

Per the Department of Labor, the federally mandated minimum wage currently sits at $7.25 per hour. Although some cities such as Seattle, Washington, have begun to raise the wage to $15 per hour, the lack of a similar increase nationwide continues to affect the quality of life of many workers, including young adults.

The current federal minimum wage has a harsh impact on young people between eighteen and twenty-five. People in this age group typically do not have prior job experience to negotiate or argue for a higher wage for their first or second jobs. Some people will also work on earning degrees during their first job, which can allow them to pursue higher-paying jobs later on and reduce their dependence on the minimum wage to fulfill their needs. Because student housing and cafeterias are often combined into the costs of college tuition, students are less dependent on the minimum wage to cover their food and housing needs if they are able to somehow pay for college, be it through family, student loans, or scholarships. This is not meant to somehow downplay the rising costs of tuition, but merely to demonstrate how the relationship between youth and minimum wage can vary.

Other individuals who do not go through education programs, either by choice or because they are unable to afford the considerable costs of tuition, have to rely on minimum wage jobs exclusively. They need their wages to cover their living expenses but trying to cover those expenses quickly becomes impractical given the high cost of living.

At $7.25, the minimum wage is too low to cover said expenses. A worker earning $7.25 per hour will make $1,160 in a single month. At face value, this means that a minimum wage employee will earn $1,160 in one month if they work a standard 40-hour workweek.

Compared to the cost of living, a deficit appears in how much a minimum wage worker earns and how much they need to spend on rent and food. Using Texas as an example, the Department of Statistics reports that the 2019 average gross rent in Texas was $1,109 monthly. After paying rent, assuming no other forms of income like a second job or government aid, someone working minimum wage, like a waiter, will have $51 leftover to spend on groceries, gas, clothes, car maintenance, and utilities, which may or may not be covered in the cost of the rent.

In Texas, the average monthly cost of groceries alone is estimated to be between $266 to $300. (balancingeverything.com, "Average Food Cost Per Month") An employee who has paid $1,045 in rent will come up more than two hundred dollars short of being able to afford the average Texas grocery bill.

Struggling to afford a high cost of living has several knock-on effects on the lives and happiness of people who work minimum wage jobs. They have less time to spend with their friends and family as they have to figure out ways to make up for the deficit in their wages. One of the more common ways to do this is to take on multiple jobs. This eats into their time and energy and adds further stress. This stress can compound, as managing multiple workloads lead to employees not having as much free time reducing their quality of life as they are forced to spend more and more of their time at work and when not working, on budgeting out their meager resources instead of visiting family or friends, pursuing personal projects, or any number of non-work related things that they no longer have time for.

Unfortunately, even with two or more jobs, some employees remain unable to stay above the poverty line. Since the cost of living can be expensive, many workers may still need government aid. According to cnbc.com, "The average minimum wage worker in the U.S. would need to work almost 97 hours per week to afford a fair market rate two-bedroom and 79 hours per week to afford a one-bedroom."

Food stamps and assisted housing programs exist to try and mitigate the problem but are often subjected to scrutiny from both sides of the political aisle. More liberal-progressive voices feel these programs are insufficient to properly render aid to the needy, while conservative voices advocate for individuals to be self-reliant rather than come to the government for help. For example, during a 2021 legislative session, Senator Mitch McConnel was quoted as saying that the U.S economy was already recovering from the Coronavirus pandemic, voting against a proposition to raise the wage in a pandemic relief bill and implying the wage increase was unnecessary. (Syracuse, “Senate Kills 15 An Hour Minimum Wage Hike In Covid Relief Bill).

While there are many arguments about either position from ethical and moral perspectives, "Far less attention," Elisabeth Buchwald writes, "has been given to the tax-expenditure implications of increasing the minimum wage." (Marketwatch, "A $15 minimum wage could cut government spending on welfare programs by up to $30 billion, study finds"). As Buchwald reports, these programs cost taxpayers a substantial amount of money while not doing enough themselves to lift or prevent individuals from the poverty line. Changing this into a direct wage increase, rather than offering up indirect aid programs, could give workers of all ages more ability to provide for themselves without having to rely on ineffectual tax-funded programs.

The low minimum wage prevents young people from developing financial security and independence. For many younger adults, their first minimum wage jobs don't pay enough to cover the expenses needed to move out of their parents' home. This can cascade to the point where individuals working full-time jobs are unable to live on their own, requiring either the continued support of parents or shared rent with multiple roommates to cover the housing costs. Because of the disparity between the cost of living and how much pay these workers earn, it’s often not just economically more effective but practically required for younger workers to continue living with their parents well into their early adulthood, as their jobs fail to provide enough for them to move out or afford rent, food, transportation, and emergency expenses. This can be stifling to individuals, as the lack of sufficient funds prevents them from being able to reach and explore many life milestones. Aspiring parents may not be comfortable having children without the money to pay for school, or couples may delay marriage because of their inability to afford the fiscal burdens of supporting two people.

The minimum wage needs to be raised to allow young adults to buy housing and groceries, break away from their parents, and have enough financial stability to spend with people they care about, or support them financially. As things stand, workers making minimum wage are unable to afford many of the milestones in life that are often taken for granted and underestimated in how much it cost to afford them, like the aforementioned marriage, housing, and child support.

Some working on raising the minimum wage include Alexandria Ocasio-Cortez, United States Representative from New York, Bernie Sanders, United States Senator from Vermont, and the Fight For 15 campaign, which as discussed elsewhere, succeeded in lobbying for the raise for $15 all the way back in 2014.

Some ways local youths can get involved in supporting the wage is to petition their city officials to raise the wage locally. While a federal wage increase would be ideal for consistency between states, the value of simple local raises should not be underestimated, and may be a smaller and thus more tenable goal for a group to work towards.

They should also refrain from crossing picket lines and not shop at businesses where workers are striking. If possible, they should join their area’s local unions for employment and use collective bargaining power when discussing their wages with local employers.

While raising the minimum wage may have logistical and political barriers, doing so would have a positive effect on society by removing financial barriers and stress for many.

Sources

Adamczyk, A. 2020. July. 14. "Minimum Wage Workers Cannot Afford Rent in Any U.S State". cnbc.com. https://www.cnbc.com/2020/07/14/minimum-wage-workers-cannot-afford-rent-in-any-us-state.html

Buchwald, E. 2021 Feb. 2. "A $15 minimum wage could cut government spending on welfare programs by up to $30 billion, study finds." marketwatch.com. .https://www.marketwatch.com/story/a-15-minimum-wage-could-cut-government-spending-on-welfare-programs-by-up-to-30-billion-study-finds-11612290567

Department of Numbers. "Rent". deptofnumbers.com https://www.deptofnumbers.com/rent/texas

Ganga, M.L. 2014 June 14 . "Seattle raises minimum wage to $15 an hour, highest in U.S". https://www.latimes.com/nation/la-na-seattle-minimum-wage-20140602-story.html

Milena. 2021 June 6. "Average Food Cost per Month – In-Depth Analysis and Trends". balancingeverything.com. https://balancingeverything.com/average-food-cost-per-month/

U.S Department of Labor. "Minimum Wage" Web. dol.gov. https://www.dol.gov/general/topic/wages/minimumwage