The Minimum Wage and Skills

Good article here on Chicago’s “Fight for $15” campaign, a push to boost Illinois’ minimum wage, which has been stuck at $8.25 since 2009. As noted in the piece, there has been a bit of a surge in these types of campaigns in recent months:

Wednesday’s action came just weeks after hundreds of fast-food workers walked off their jobs in New York City, also in a push for higher wages. Late last year, Wal-Mart workers in select cities staged protests, seeking higher wages and benefits as well as pushing back against the retailer’s decision to open on Thanksgiving.

The protests have been gaining steam in the fast-food and retail sectors — which have generated the most jobs since the recession, labor experts said, but are among the lowest paid.

A study last year by the National Employment Law Project, an advocacy group, found that most of the jobs gained since the early 2010 — 58 percent — paid $12 an hour or less. (my emphasis)

Many advocates point to education and training as the best way to move people out of low-wage jobs and into careers that command a living wage—and, ideally, a middle class income. But that argument doesn’t attempt to address the problem of stagnant wage growth in the low wage/low-skill jobs they hope to move people out of. And no matter how much we invest in adult education and training, we’re still going to be looking at considerable  growth in these kinds of jobs for the foreseeable future (not just retail and food preparation jobs, but other low-skill, low-wage jobs, like child care)—jobs that presumably we’re still going to want someone to perform (and most of which can’t be outsourced to other countries).

The argument for investing in education and skills also rests on the notion of a skills gap: that there’s a large mismatch between available jobs and the skills of the workforce. A couple of years ago, Jared Bernstein made what I still think is the best and most succinct argument as to why recent economic data doesn’t support this notion, at least in terms of educational attainment. (In a nutshell: if it were true, we’d be seeing an accelerating wage/salary premium for workers with higher levels of education.) At the same time, he argued:

I still think we’d have a better economy/society with higher levels of educational attainment…I’m quite certain, in fact. It’s wrong to think that the jobs of the future all will demand wicked high skill sets—we’re going to need lots of home health aides, cashiers, security guards, equipment technicians, child care workers, along with high-end engineers. But to have smarter, better educated people in all of those jobs makes all the sense in the world.

In other words, supporting education and training for all workers at all levels makes good economic sense, whether you accept the skills gap argument or not. But, again, that doesn’t address the problem that, currently, many low-skill jobs don’t pay enough for people to live on, and there’s little incentive (or opportunity) for someone to become a better trained or better educated cashier, for example, if wages for that line of work are stuck at a level that keeps them in poverty or close to it. At the same time, there doesn’t appear to be an incentive for employers to pay more for employees at this level, whatever their skills are.

Maybe there is a better way to address this problem that does not involve boosting the minimum wage (or even better, passing living wage laws), but if I were suddenly made the all-powerful Grand Poobah of economic policy in this country (this would be in an alternative universe where actual experience in—or knowledge of—economic policy was not a prerequisite), I think the first thing I’d push for is to just give everyone making less than $10/hour or less a raise to $15/hour—and then see what happens.

Here’s what I think might happen: obviously, minimum-wage workers and their families would be better off right away, but I assume that the boost in wages would also have a stimulative effect on the economy as a whole, too (thus leading to more job creation), because even with that raise, people making just $15/hour are going to be putting most of those dollars back into the economy.

I also suspect that demand for adult education and training would actually go up, despite the fact that minimum-wage workers would presumably be happier in their low-skill jobs. Even a large minimum-wage boost is not going to make people rich, so I don’t see how it would kill off the incentive to pursue education and training for a career in a field where the pay is even better. What it would do is provide more people with the time (fewer people working two jobs) and the economic security (fewer people worried about where the next rent check is going to come from) to successfully pursue those opportunities. I’ve had a pet theory for some time that the best way to boost adult education enrollment and retention rates in any community would be to pass a living wage law and provide universal child care.

(By the way, I’m not convinced that small business owners are standing in the way of raising the minimum wage. In a recent poll conducted by the Small Business Majority, more than two-thirds of small business owners said they supported it.)

Again, in education circles we tend to think of education as the primary policy lever for moving low-skill, low-wage workers into a position where they can command a higher wage, but stagnant wages and growing inequality is an issue that education alone is not going to solve.

Keeping Juveniles in Juvenile Courts

I wasn’t surprised to learn recently that there are still some states where the age of juvenile jurisdiction is less than 18, but I was surprised to learn that one of them is Massachusetts.

Putting aside the the serious health and safety risk to young offenders when you lock them up in an adult prison (which is reason enough to keep them out of them), ruining the employment and educational prospects of a 17-year-old who commits a nonviolent drug or property crime is pretty shortsighted public policy.

They Write Letters

GED Testing Service LetterThe GED Testing Service released a letter yesterday in response to a recent, widely circulated Associated Press story about the changes coming to the GED exam in 2014. I’ve written a lot about the controversy over the new exam—you can search the archives if you are interested.

The letter asks the adult education community to be “more courageous” when making decisions about the new test, “because that is what it will take to ensure [adult learners] are prepared for the future.”

It goes on to say that the alternative exams from McGraw Hill and ETS now competing with the GED in the high school equivalency testing market fail to measure college and career readiness, and that the revamped GED will be the only test “truly capable of measuring depth of knowledge and the skills that employers and colleges now expect.” Choosing one of the competing assessments “will just leave your adult learners behind.”

Other highlights:

  • “We believe adults are capable of acquiring the skills necessary to compete, including demonstrating basic technology skills and college and career readiness in 2014 and beyond.”
  • “It’s important that we have substantive conversations about all the issues and changes that we need to make, instead of settling for a cheaper, less effective test. It’s past time that the media and policymakers acknowledge the role that your staff and adult educators play in economic development in your jurisdiction and that you need resources to do the job right.”

So there you have it: those state officials who have chosen one of the alternative assessments are gutless cheapskates who don’t think their learners can actually acquire  the skills to compete. Let the substantive discussion begin!

Why Virginia Settling on the GED is Probably Good News for the Region

The Washington Post reported Friday that Virginia will continue to use the GED as their high school equivalency test. The Old Dominion joins Maryland and the District of Columbia in sticking with the GED (at least for now), and it seems to me this is good news for those seeking to attain a high-school equivalency credential in the DC/VA/MD region, where the population tends to move around, especially between Washington and the surrounding counties. Those preparing for the GED in the District, for example, won’t have to start over again with a different test if they move their residency to one of the surrounding counties—a fairly common occurrence. (Same goes for GED instructors.)

I still think that ultimately the GED backlash (at least threes states—Montana, New Hampshire, and New York, have already announced that they’re going with alternative exams, and more will likely follow) might have something of a silver lining if it encourages states to take a fresh look at how to better serve adults who are seeking to attain a high school credential. The GED was never actually the only way to this in most states anyway, just by far the most popular way. But as useful as it has been to have a de facto standard with the GED, there really ought to be multiple pathways to a high school credential, with options that accommodate the many different needs and circumstances of those seeking one. And those options ought to include opportunities to simultaneously attain industry credentials, trade skills, and/or enrollment in postsecondary education. (This is why I think the GED Testing Service’s efforts to continue to dominate the market  will ultimately fail—I think they’ve just pushed along a re-thinking process at the state level that was probably going to happen anyway.)

What do you think? Let me know in the comments!