Your comment is informative, but, come on. This "fiasco" is supply in demand in action. When it (occasionally) favours the workers, it doesn't deserve to be described so negatively.
1) Go to college and earn a degree for 120-240k dollars
2) Start paying rent, owning your own car, healthcare, food, and leisure activities.
Both of these are expensive directions to take. It used to be that someone could pay for school with a summer job, why shouldn't it be now? It doesn't appear the education changed at all.
Also, as others have pointed out, teenagers tend to be less reliable employees. One part of that is that they don't need the job, at least in an "I might starve and be homeless if I get fired" sense. Another part is that if they're only working for the summer, they're unlikely to have time to become exemplary employees.
As a society, I agree it makes sense for teenagers to be able to pay for their own education with reasonable work. As a business, I don't think I would see that as my problem to solve directly, and probably not one I could even afford to fix even if I wanted to.
The average in-state tuition in the US (so sticking to the cheaper side) is $10,440/year. There's roughly 10 weeks of summer break, so 400 hours of work assuming a 40 hour work week. You need to make $26/hr after taxes and save every penny of your paycheck to afford that tuition bill. Average out of state tuition is $26,820/year; you'd need to make $67/hr after taxes to pay for that over summer break.
Again, those are after-tax numbers, so you'd have to make north of $30/hour pre-tax to be able to pay for in-state tuition. I just don't see that happening.
It's not that he "shouldn't". Rather, many businesses cannot afford to both pay teenage employees $20/h, and also to not raise the prices. Some businesses can raise prices just fine, but others are not able to, as the customers will stop buying at higher price point. For example, if all groceries doubled their food prices, I'd still buy food (though maybe less than before), and likely spend more on it than I used to. However, if all restaurants doubled their prices, I'd pretty much stop eating out altogether, except special occasions.
It's obvious that teenagers can't make 1k/hr without breaking the economy - but I don't see any reason why $20/hr would be outside of historic norms. In 1981 the minimum wage was ~$3.25/hr, translating to ~9.71/hr today. Given the advances in technology that have driven a more than 2x increase in real economic productivity over that period why shouldn't the starting wage be $20/hr for teenagers?
> Given the advances in technology that have driven a more than 2x increase in real economic productivity over that period why shouldn't the starting wage be $20/hr for teenagers?
The growth in economic productivity hasn't been uniformly distributed across industries, and it's been pretty low exactly in the industries depending on cheap, low skill labor. What are the advances in technology between now and 1981 that made restaurants 2x more productive?
Now the problem with this is that the effect is to lower expectations for wages by taking advantage of financial literacy. Someone working for them for 4 years receiving a raise every 6 months earns $2/hr more. The employer/seasoned employees point to this and say that a starting wage $2/hr higher is unreasonable. Unfortunately the fixed rate wage increases diminish over time, and if you think that moving into management/higher level positions would entitle you to more money... then I have a bridge in Brooklyn to sell you.
When employers mirror this strategy or take other similar approaches, then you end up with wages that are depressed relative to the value of the labor being provided ( or the opportunity value if that labor was applied to other activities, or used more efficiently ).
Microwaves, dishwashers, steam-injection ovens, just-in-time logistics for raw ingredient deliveries, credit cards, online ordering...
They certainly reduce the potential for theft/shrinkage! It used to be that you needed a trusted business manager/employee to manage the register, now anyone can do it and it's much harder for someone to siphon funds. All transactions are now viewable to management to more easily see what's selling and what's not.
McDonalds manages to make profits in EU/AU/NZ/CA etc while (mnostly) complying with local minimum wages and conditions. The Big Mac index shows that their actual prices are within a narrow band compared to the US.
They (and other megacorps like Walmart) exploit both their workers and their customers, who end up paying the workers via the inefficient means of tax credits and poverty relief instead of the corporations/businesses being required to pay proper wages and contribute to their local communities via taxation.
If they doubled they prices, they could increase them by 20%? Huh?
https://www.umass.edu/financialaid/undergraduate/undergradua...
In-state: 30,656 * 4 = 122k
Out Of State: 51,181 * 4 = 205k
If you looked at this 5-10 years ago your numbers were probably right. But interest rates are low and borrowers can borrow far too much money.
[1] https://financialaid.utah.edu/tuition-and-fees/cost-of-atten...
edit: talk to any large employer and ask them about employing the younger generation. All of them will say they have no work ethic and sit on their phones the whole time. You know what else, they think they should be paid $100k/hr and be millionaires...so try managing a bunch of people with that attitude and try not to go crazy. These companies are now reaching out to the older crowd for which they used to discriminate against because the young people suck.
“The children now love luxury; they have bad manners, contempt for authority; they show disrespect for elders and love chatter in place of exercise. Children are now tyrants, not the servants of their households. They no longer rise when elders enter the room. They contradict their parents, chatter before company, gobble up dainties at the table, cross their legs, and tyrannize their teachers.” - Socrates
Previously people accepted the small amount, but now they aren't because they're (currently still) being paid to stay home in most cases.
By your assessment, though, it seems the seller's market is not caused by the minimum wage, but by COVID relief packages?
Also, I'm sorry you're getting downvoted. I only downvote if someone goes against community guidelines, and not if I simply disagree with them
I think it is important to distinguish a couple of things.
If there are businesses out there, like maybe McDonalds or Walmart, who are easily able to pay $20 per hour instead of $7.50, and are choosing not to do so because of a desire for even larger profits, then yes, this is evidence of a mild seller's market for labor and also a lack of market savvy on behalf of McDonalds/Walmart.
If those corps are already offering $20 an hour and benefits and still people are not showing up to work, then it is a roaring seller's market for labor, and must in theory be caused by some other external source that is causing laborers to feel $20 is too low. Where are they going, what are they doing? Are they taking the opportunity to pursue a degree? Are they staying at home playing video games? Have they all found a job making $42 an hour talking on the phone at home? We would need the data to answer these questions.
But in the exact case of restaurants, I genuinely think most of them do not have the money. I haven't ever in my life met a restaurant owner who has a stable financial situation with a paid off mortgage, nice car, and 3 kids put through college already having become cardiologists or something like that. But I've met a lot of other people who have done all that. And I've met a lot of restaurant owners too.
I think that all they can afford is $7.50-$12.50 an hour in most cases, with no benefits. And now that city centers have seen a good portion of their residents with lots of disposable income move away, I suspect that most restaurants have lost the financial base that used to support them.
I saw a video of a restaurant owner during the pandemic in NYC who cut his staff from 45 to 3 and was just barely able to pull it together and survive. Was he paying his people more than $15 an hour? Don't know.