The mayor of San Francisco recently announced a new measure to bring the city’s minimum wage up to $15 per hour. Setting a baseline living standard for all members of our society is a reasonable, just, and valuable thing to do for a society as prosperous as ours. I totally understand setting a floor for livable wages.
The problem is in applying these kinds of solutions in a blanket manner. Not everyone who is working is trying to live on their wage. I don’t know anyone that would not support a “living wage” for full-time workers. But there are two other types of workers that are very common and critical to businesses: part-time/seasonal workers and interns/students.
The minimum wage cuts these people out by assuming that everyone needs to fully support themselves. Is it so crazy to think that there might be someone who wants to pick up a few extra bucks on weekends, or between classes, or while the kids are at school? I think it is wrong to assume that every task that needs to be performed at every company is worth $15 an hour.
Let’s talk about my company, because I use both of these types of workers.
Part-time Workers and Seasonal Help
We send out 1,800 tax organizers every year. It takes about a week to do it and we bring in temporary workers to staff the printers, stuff envelopes, and prepare the mailings. We most commonly recruit friends of our current employees for these sorts of temporary projects. Tax season is our other peak time. For about 12 weeks we are a flurry of activity. There are huge amounts of paperwork that need to be scanned and stored and then later shipped back out. We have a couple stay-at-home moms who only work with us during this season for the hours their kids are in school. They love it because we are flexible with the schedule, it is easy work that doesn’t really add any pressure to their already stressful lives and they can start and stop without any difficulties. The season starts after the kids have gone back to school and by summertime they are done. They also pick up enough extra cash to cover their family vacation or pay a property tax bill.
These flex workers are critical for businesses to help with peaks and valleys in workload. We love these folks because they are reliable, hard working, and are not competing with other staff for hours or career spots. Win/win, right? To say that we are an unfair employer by not providing a “living wage” because we only pay these folks $10 or $11 an hour seems a bit far-fetched. They aren’t trying to live on the wage, just meet some smaller financial goals on the side.
Interns and Students
While this living wage may be an inconvenience for businesses, and will result in higher prices for our customers, the real trouble comes in the form of interns and students (or any worker, really, who is developing a new set of skills). Ask any business owner what their top five challenges are, and I guarantee that one of them will be finding and retaining good workers. Add to that an unemployment rate that is still too high and hundreds of thousands of people underemployed, and you realize that we have a major problem in skills and training mismatching. There are people who want to work, yet businesses can’t find qualified people. This is a complex problem with lots of facets, and I won’t pretend to solve all of those here. But I can tell you how my company deals with it.
At our firm, we never hire for career positions externally. We only promote from within. We do this because cohesive culture is the key to quality and success in a business like ours. We hire bright students while they are in college and have them work as interns for a year or two before we slowly move them up the chain to being a partner. They learn the skills they need to succeed alongside their “book” education at the local university. For us those dollars are an investment, not a cost. We are overpaying those people because they don’t actually know how to do anything valuable, yet. We are willing to invest the money in them, hoping that we reap the benefit of their being productive employees later.
This is one of the single best solutions to the skills mismatch. Encouraging businesses to invest in the training of their employees will get employees the skills they need to have good jobs and will allow businesses to shape the training they want. But it is a two way street. Employees need to understand that they have a stake in this training as well. Forcing up the cost of that investment is exactly the opposite way to encourage more of this investment to happen!
After a person has fully developed their new skills, they should be entitled to a living wage. But to assume that every student needs to fully support themselves, regardless of whether or not they have the skills and knowledge to do so, compounds the already serious problem in our economy of mismatched skills and training.
Let’s make sure the steps we take to provide for all members of our society are best for the long term, not just the immediate future.