National MP David Bennett said the government saw a bright future for young people and wanted them to get the best skills possible through education and training rather than take up low-paid jobs.Am I crazy in reading this as saying National sees high youth unemployment not as a cost but as a benefit? That they want unemployed kids so that the opportunity costs of schooling are lower?
"This bill says you need to pay people less to get them into their first jobs and into an unskilled future," he said. [emphasis added]
Recall that minimum wages were set up in the first place with the deliberate intention of making certain people "unemployable": the Progressives didn't want Chinese labour "underliving" whites and competing wages downwards; they also wanted to keep women out of the workforce where they may have been subject to temptations. Writes Tim Leonard:
American economics came of age during the Progressive Era, a time when biological approaches to economic reform were at their high-water mark. Reform-minded economists argued that the labor force should be rid of unfit workers—whom they labeled “unemployables,” “parasites,” and the “industrial residuum”—so as to uplift superior, deserving workers. Women were also frequently classified as unemployable. Leading progressives, including women at the forefront of labor reform, justified exclusionary labor legislation for women on grounds that it would (1) protect the biologically weaker sex from the hazards of market work; (2) protect working women from the temptation of prostitution; (3) protect male heads of household from the economic competition of women; and (4) ensure that women could better carry out their eugenic duties as “mothers of the race.” What united these heterogeneous rationales was the reformers’ aim of discouraging women’s labor-force participationThe Progressives saw it as a great thing that minimum wages increased unemployment rates for those they would prefer make unemployable.
Recall further that while high minimum wages do push youth out of employment, that doesn't set them on the path to education and high earnings. At least not for the folks hurt most by high minimum wages: low skilled minority groups. As David Neumark and Olena Nizalova wrote in the Journal of Human Resources 2007 (NBER version here):
Exposure to minimum wages at young ages could lead to adverse longer-run effects via decreased labor market experience and tenure, and diminished education and training, while beneficial longer-run effects could arise if minimum wages increase skill acquisition. Evidence suggests that as individuals reach their late 20s, they earn less the longer they were exposed to a higher minimum wage at younger ages, and the adverse longer-run effects are stronger for blacks. If there are such longer-run effects of minimum wages, they are likely more significant than the contemporaneous effects on youths that are the focus of research and policy debate.Somebody please tell me I'm crazy and that I'm reading too much into David Bennett's statement. Otherwise I think I'm going to be sick.