Representative Kenneth J. Mendonça (R-District 72 Middletown, Portsmouth) will testify before the House Committee on Labor Thursday on legislation, which would set the minimum hourly wage at $9.65 an hour for employees under the age of twenty, according to a press release from the State of Rhode Island General Assembly.
House bill 5594, “An Act Relating to Labor and Labor Relations – Minimum Wages” sponsored by Representative Mendonça and co-sponsored by House Minority Leader Patricia Morgan (R-District 26 Coventry, Warwick, West Warwick) amends the current law by capping the minimum wage at $9.65 per hour for those under 20 years old.
Representative Mendonça’s legislation comes on the heels of Governor Raimondo’s current proposal for an increase in the minimum wage for all hourly workers from $9.60 to $10.50 per hour. According to Representative Mendonça, the real effective rate when overhead and G&A are applied to the .90 cent increase is closer to $1.50 per hour.
“There is significant data that directly correlates that an increase the minimum wage has a negative impact for those under the age of 20 years old. Some of the data is common sense. Employers are less willing to hire someone with no or very little prior work experience or less education. Businesses are in business to be profitable and if a non-market force, such as the legislature, increases the cost of doing business, but does not increase profits, they are less likely to hire. Businesses will also reduce hours and use technology and machinery to replace workers,” said Representative Mendonça.
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He added, “I had a business owner of a national fast food franchise tell me recently that in 5 years there will be a machine making sandwiches in his stores.”
According to Stephen Moore, a senior economic analyst, “16-19 year olds often get priced out of the market when the minimum wage rises in states. From 2009-2013, eight states had a minimum wage averaging $8.00 or higher. In those states the teen labor force participation averaged 35.6 percent. Teenage unemployment averaged 27.2 percent.”
“Critics who call this a child labor wage are diminishing the atrocities which took place in the 1800’s and trying to deflect attention away from concrete data, which proves that this is a good bill. It is an insult to compare the two and does nothing to help the public see the spirit of the bill, which is to help teenagers gain suitable employment, where they can gain experience and get a good start in life,” said Representative Patricia Morgan.
She continued, “Research from Northeastern University found that teenagers who secure employment, have a greater potential for earning higher wages later in life, due to the acquired experience. More experience equals more investment in training. Entry level jobs also provide invaluable workplace experience to teenagers just starting their careers. These teenagers are more optimistic about their prospects and are less likely to drop out of school, have trouble with the authorities, or get pregnant. Furthermore, early employment leads to better jobs and careers later on.”
According to the Employment Policies Institute, “High minimum wage rates hurt teens’ chance(s) at learning valuable life skills that cannot be taught in a classroom. When entry-level job hunters are able to find work, they earn more than just a paycheck. They learn valuable life skills like the importance of meeting deadlines, how to report to a manager, and how to get along with coworkers. These are lessons that are not taught in a classroom setting, and the job experience young employees acquire sets them up for future success with promotions and raises beyond the minimum wage.”
Currently, nineteen states have some form of youth minimum or training wage already. Some of the states have the wage set for a period of hours or days worked and then the wage shifts upward. At least nine states have a set Youth Opportunity Wage below the states’ minimum wage based on age in perpetuity through the use of a formula.
“This bill also gives businesses a break from a broad brush increase in the minimum wage and as previously stated, not negatively hurt those under 20 years old from being able to be employed,” said Rep. Mendonça.