Boots & Sabers

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0852, 04 Jan 16

Minimum Wage Hurts the Young and Lesser-Educated the Most

Yup. The “$15/hour” crowd can’t change economics.

My baseline estimate is that this period’s full set of minimum wage increases reduced employment among individuals ages 16 to 30 with less than a high school education by 5.6 percentage points. This estimate accounts for 43 percent of the sustained, 13 percentage point decline in this skill group’s employment rate and a 0.49 percentage point decline in employment across the full population ages 16 to 64.

Hat tip Greg Mankiw.


0852, 04 January 2016


  1. Kevin Scheunemann

    As a business owner, the number would be closer to AT LEAST 20-30% of workforce in this arena.

    There is innovation I would embrace instantly that would make 20% of my employees obsolete immediately at $15/hour. (Tech would do job instead of employee…examples include, Drive greeter, outsource drive order taking, self serve register stations, ordering manufatured products vs. make them in store… like novelties, cakes, etc.) This investment could be done for no more than $20,000, most of the expense is in self serve kiosks. Some technology is here and only requires store level decision to switch at no cost like manufatured cakes, novelties.

    There is technology “in transit/development” in industry that would pair back staff another 10-15%.

    There is long range plans in the QSR industry to even make the big jobs, like line cook, obsolete.

    The QSR induistry is seeing this $15/hour movement and accelerating the technology that does not call in sick when not sick, does not show up drunk, considers partying and social life more important than a job, act like losing cell phone during shift is like losing a limb, etc.

    This $15/hour movement is accelerating the job loss.

  2. Mark Maley

    Ask for $15
    Get $10
    Basic negotiation

  3. Kevin Scheunemann

    With rare exception, most high school students do not have skills to be worth $10 an hour.

    It does happen, but they don’t drink, do drugs, are super responsible, put job before social life, can multitask on multiple levels without a cell phone, and excel at customer service. That is about 1 in 500 high school students. And I’m probably optimistic.

  4. old baldy


    “That is about 1 in 500 high school students.”. Obviously you don’t know any farm kids. Going rate for high school farm help up here is $14-16/hr. And competition for good ones is fierce.

  5. Seeker

    Way past time to ban this guy. All posts are harassment and trolling.

  6. old baldy


    Good for you, banning free speech.

  7. Kevin Scheunemann


    I agree farm kids tend to be more likely the kids that meet the work ethic I describe.

    Unfortunately, many of them are working on the farm they live on and are not looking for an outside job as much as urban kids.

    Classic catch 22. Sometimes an urban kid does surprise you with a good work ethic. Most of this time, it involves a kid with disasterous parental units and work offers them a serenity calm from dysfunctional home life. Even if work is fast paced and high pressure….

    Just my 25 years of teenage observations.

  8. old baldy


    I guess we look at the world differently. I think everybody can do the job until proven otherwise. You feel only 1 in 500 can with out any proof. Glass half full versus glass half empty. So sad.

  9. Kevin Scheunemann


    Many can do the job….but that does not mean they can excel at the job.

    I think the high school students who excel deserve $10-$12 an hour.

    Those who just exist and do enough to get by, why do they deserve $10/hour?

    If you pay the ones that do just enough to get by, doesn’t that destroy the incentive of those that excel, if the mediocre get paid the same?

    That is the great problem with this $15/hour movement.

  10. old baldy


    So now you are backing off your “1 in 500” claim, eh? Glad you are learning a little bit, getting a little more optimistic. But you will always get what you pay for.

  11. Kevin Scheunemann

    I don’t know how you got that I’m backing off the 1 in 500 claim.

    I’m only stating the 1in 500 that do excel do deserve $10-$12/hour.

    When you demand the mediocre make $10 (or more) those that excel see the mediocre get rewarded and it provides a disincentive to excel.

  12. old baldy


    I can’t debate your made up “1 in 500” claim, nor can you. Until you provide statistical proof (maybe DQ Corporate has done a study) I’ll say with the same credibility as you that you are just blowing smoke.

    But I’ll take it a bit farther. There are approximately 500 students in our high school. You are going to say that there is only one capable of “excelling” as a DQ employee at your DQ?? I’ll say you are wrong. Maybe the difference is we are a rural district in northern WI. Or we don’t automatically limit them to only 1 in 500 being smart enough to clerk at DQ. What do I tell the 6 or 8 great kids that work at the Burger King?

  13. Kevin Scheunemann


    I’m the one who writes the check to pay teenagers for last 25 years.

    My knowledge and experience dealing with it day in and day out should be enough.

    If BK has 6-8 great kids that excel…he is one lucky franchisee. (Excel meaning great customer service, fast, efficient, does not drink/no drug use, puts job before social life, and gets tasks doen without being asked.)

    I’venever seen any QSR restaurant with that many great kids who excel. 1…2, maybe, at the outside.

    There are good kids out there, but many times they need constant direction, will not do more than the minimum at good customer service, and, generally, will put their job after their social plans,and may have a difficult time separating themselves from their cell phone once in a while when on job.

    “Good” does not deserve “great” pay.

  14. Pat

    Have you thought about drug testing?

  15. Kevin Scheunemann


    Yes, but you can’t do it without parental permission. You can’t subject minors to that kind of procedure unless parent(s) are OK with it.

    That is a difficult conversaton. Nearly evey parent, where the kid has an obvious addiction problem, seems oblivious to little Johnny or Susie Q’s addiction. Testing minor’s creates more problems than it solves. Even if you have evidence, parents are in denial. Parents in denial does not solve this problem on any level.

    Aside from that, firing someone for drug/alcohol use subjects you to disability discrimination claims, claims for invasion of privacy, or defamation claims.

    I’ve had 2-3 employees in this category in last 2 years. Tried to get them help by sitting parents down, but if parents don’t want to deal with it, or are incapable of taking advantage of addiction resources out there, little can be done.

    I’m here to operate a business, not manage family dysfunction. I try to offer solutions, sometimes being blunt, but if minor and/or parents refuse to acknowledge the problem, not much can be done to turn them around.

    Now insert this $15/hour nonsense on this same employee. Can you imagine having to pay this kind of worker above $8/hour? What does that do to good employees who don’t act stupid in their personal life, if they get paid near or equal to this employee?

    This is why I find the $15/hour movement so absurd.

  16. Pat

    If a parent won’t allow little Johnny to take a drug test, don’t hire little Johnny. Hire someone who’s parent will allow their little Johnny to be tested.

  17. old baldy


    As the employer you certainly have the right to hire who you want, and fire any or all of the at your whim. I have no problem with that.

    What is troubling is your pessimism regarding the abilities and talents of our youth. It could be the result of your locale, expectations, or just your personal bias.

    I’m glad the kids up here have more on the ball and are willing to go the extra mile for an employer. And proud of our SD that just received a national award for superior scores in reading and STEM. Great future ahead for them. Too bad we don’t have a single DQ in the county..

  18. Kevin Scheunemann


    The problem is not at point of hire. Many times I hire 14 or 15 year olds and the addiction problem usually starts around 16. They fall in with bad friends, start hanging out with morally challenged kids, etc. (this directly correlates with public school’s inability to kick bad kids out.)

    So the problem occurs usually after hire.

  19. Kevin Scheunemann


    Come by and listen to teenage gossip (employees don’t think I listen, but I do), you will be shocked at what goes on in their off time.

    You just don’t see the problem because you are not exposed to it on a daily basis. It’s a lack of teaching and enforcing Christian morals at a family and school level by adults that need to be more responsible in teaching consequences to bad choices.

  20. Pat

    So you only have a problem with 14-15 year olds? My solution would be to not hire that age of workers then.

  21. Kevin Scheunemann


    Not all of them end up hanging in wrong crowd. The older you hire, the more difficult they tend to be to train.

    All the great employees tend to be hired at 14 or 15 and stay a while. I have some of lowest turnover in QSR industry, so I’m not going to change my target employee demo.

  22. Pat


    So most all ofthe kids are great employees. That’s fantastic! I thought from the way you sounded that they were all undependable, drug abusing, losers who weren’t worth the money you’re paying them. I guess it’s not too bad for you after all. Good to hear.

  23. old baldy


    Wow, some christian morals you have, assuming (wrongly) that I don’t have routine contact with teens. You shouldn’t make allegations without any proof. Isn’t there a commandment against that?

    And christian is required to be a good employee? Balderdash .

  24. Kevin Scheunemann


    Some are good. Few are great. Many are average.


    You are exposed to teenagers on a daily basis? If you truly are, you should confirm everthing I have said.

  25. Dan

    As someone, a high school teacher, who has worked with teenagers in inner cities, rural areas, poor rural areas and upper class rural teenagers, I think I can speak to this issues. I also have worked part time in several jobs in which I work directly with high school students.
    Quite frankly, the students in inner cities, for the most part don’t have the skills or temperament, while in high school, to do even the basic jobs. Of course, there are some students who do have the skills to do the jobs but they are in the minority.
    Students in well to do areas tend to have the skills, mostly because of upbringing- their parents work hard and so do they.
    If your parents have been on welfare for a long period of time, their kids will probably do the same.
    While, if your parent works hard, the child will work hard.
    I realize liberals don’t get this, but it is the truth.

  26. Pat


    I understand what you’re saying, but Kewaskum isn’t the inner city. It’s more like Mayberry. A God fearing, very conservative town.

  27. old baldy


    Again, another false assumption. You have no knowledge of my involvement with youth. But I am willing to be less judgmental than you, and have a more optimistic view of our future.


    I agree to a point. It isn’t just students in the well to do districts that have better performance. Our rural district is far from “well to do”, but we do very well when compared to more wealthy districts. I think it is a combination of factors; community involvement, respect for the educational process (start to finish), good parents, and opportunities for kids to test their wings a little. And I really don’t think it is a liberal/conservative thing. The most liberal family I know has an MD, DVM and PhD (History) from their three kids.

  28. Kevin Scheunemann


    A conservative city is not immune to the moral rot of bad teenager choices, especially when it comes to alcohol/drug abuse.


    I’m hopeful for the future, but I’m not purposely blind to obvious problems.

  29. Pat


    “A conservative city is not immune to the moral rot of bad teenager choices, especially when it comes to alcohol/drug abuse.”

    No, but don’t you think it would stand a better chance than a very liberal city?

  30. old baldy


    But you sure are purposely blind to anyone elses opinion or experience.

  31. Kevin Scheunemann




    I’m commenting for my business. I’m the best one to make decisons for it. The problem comes in: when liberals want to dictate pay, when teenagers vary widely in skills, talent, dedication, and addictions.

    So it is liberals that refuse to take in varying points of view on this subject.

  32. old baldy


    And I said I agree with you regarding your business decisions. But you made a pretty broad brush claim regarding todays youth. I don’t share your pessimism about the future.

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