Is It Fair to Pay Teens Less Than Adults?

August 29, 2022

Between inflation, supply chain problems, and the lingering effects of the Covid-19 pandemic, businesses have had a rough time lately. On top of that, a tight labor market has made it hard to find enough workers, so many businesses have had to raise wages. But in some states—including Michigan, Colorado, California, Rhode Island, and Nebraska—employers are allowed to pay teen workers a lower minimum wage.

A lawyer for a business association and a policy director for an economics institute square off about whether that’s fair.

You need experience to get hired, but unless you get hired, you can’t get experience.

Many young people across the country face this dilemma. A lower minimum wage for teens would encourage businesses to hire them. That would give teens more opportunities to gain work experience and learn valuable life and career skills, such as the importance of showing up to work on time and how to be professional
and reliable.

Federal law limits what teens can do while on the job. At grocery stores, for example, teens under 18 can bag goods, but they aren’t allowed to operate a cardboard-box compactor. When young people can’t do parts of the job, employers have to hire someone else to do those tasks. If there are going to be legal restrictions on what teens are allowed to do, then it makes sense that their pay is lower as well.

A high youth unemployment rate is bad for teens— and bad for society.

Plus, your average teen doesn’t have the same kinds of skills that workers in, say, their 20s have. When employers have to pay everyone the same starting wage, it often makes more sense for them to hire older, more-skilled workers instead of teens.

But that’s not just bad for teens. A high youth unemployment rate is also bad for society. Research shows that unemployed teens are more likely to drop out of high school and become involved with the criminal justice system.

Studies have also found that students with part-time jobs are more likely to earn higher wages in the future compared with their classmates who don’t work.

The bottom line is that lowering the minimum wage for teens makes it easier for them to find jobs. And putting all Americans back to work will ultimately help improve our nation’s economy.

—BOB BATTLES

General Counsel & Government Affairs Director Association of Washington Business

Why should someone be paid less because they happen to be a teenager? If they’re performing the same tasks as a 20-year-old, they should earn the same money.

Teens often need jobs as much as any other workers. Some help support their families; others live on their own. All are facing higher costs for rent, food, and fuel. And if you’re a young person saving for college, that’s nothing compared to cost increases for higher education.

From 2001 to 2021, tuition and fees increased an average of 178 percent at public four-year institutions, according to the College Board. That far exceeds overall inflation of 54 percent during the same period, as reported by the Bureau of Labor Statistics (B.L.S.). Research shows people who graduate from college typically earn higher wages. Forcing teens to take lower wages will mean fewer can afford college.

Young people aren’t the only ones who would be affected by creating a lower teen wage. It could also displace older workers. Some employers might prefer to hire a rotating series of teens because it would be cheaper.

We shouldn’t pass laws that encourage more wage discrimination.

There’s already a lot of pay inequality in the United States. For example, the B.L.S. estimates that in 2021, a woman earned just 83 cents for every dollar a man made. And an analysis by the Economic Policy Institute found workers of color are far more likely to be paid poverty-level wages than White workers. We shouldn’t pass laws that encourage more wage discrimination.

There’s also a broader economic reason not to pay teens less: If young people earn less, they won’t spend as much. On average, young people spend $2,360 each year, according to a recent survey, and about 5.5 million U.S. teens have jobs. That works out to about $13 billion in teen consumer spending this year—which sounds pretty good for business.

Every hardworking American deserves fair compensation, and that includes teens. After all, isn’t paying people an honest wage for honest work a fundamental American value?

—AARON KEATING

Managing Director, Economic Opportunity Institute

TEEN WORKERS By the Numbers

10.2%

UNEMPLOYMENT RATE* for 16- to 19-year-olds in April 2022. Except for a few months last year, when it was even lower, that’s the lowest teen unemployment rate since 1957.

^{*The unemployment rate measures the share of people who are actively looking for work but are unable to find jobs.}

36.6%

PERCENTAGE of 16- to 19-year-olds who had jobs in April 2022. That’s a lot lower than the 51.2 percent average teen workforce participation rate between 1962 and 1980, when Baby Boomers were teenagers.

16.4 million

NUMBER of working-age teens in the U.S. in 2021.