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Last November Nebraska voters approved an increase to the state minimum wage from $7.25 to $8 in 2015 and another jump to $9 in 2016. Initiative 425 was successful on a platform outlining the need for a living wage for those hardworking single parents struggling to make ends meet. I do not disagree with this sentiment, and I believe every citizen should have access to the means by which to support themselves with reasonable pay for their work.
However, when many considered the wage increase, they did not factor in a vital group negatively affected by the minimum wage: young people. States with minimum wage levels greater than $8 per hour have higher youth unemployment rates and lower workforce participation among young workers when compared to states with lower minimum wage. Teens initially entering the workforce under the age of 18 are subject to safety regulations restricting the tasks they can perform. Additionally, student workers in particular have complicated school and activity schedules, and they often require additional training and oversight in their “first jobs”. Simply put, they require more time and management resources from employers than more experienced workers.
First jobs make a significant difference on the earning potential of young adults who are saving for college, contributing to their families, and active in their communities. A study published in 2014 showed that high school seniors who worked 20 hours per week had annual earnings 20% higher 6 to 9 years after graduation. That critical early earnings period post-high school can be the difference between financial independence or being strapped with debt for many young adults and families throughout their working lives. Given what is at stake for our youth, I am committed to helping incentivize employment opportunities for them.
Throughout District 38 small town business owners have been clear to me about the impact the increased minimum wage would have on their ability to provide jobs for high school students. For that reason, I used my priority designation for this session to guarantee floor debate on LB 599. Introduced by Senator Laura Ebke of Crete, LB 599 seeks to create a separate wage for Young Student Workers. Those under the age of 18 and enrolled in a public, private, or home high school program will be eligible to receive a minimum wage of $8 effective January 1, 2016. In addition, provisions in this bill restrict the decreased minimum wage to just 25% of payroll to avoid employer abuse. Students with dependents or enrolled in a vocational program are not eligible for the wage.
LB 599 does not force high school workers to be paid less. It does not allow employers to create a business model hiring only young, lower paid workers. It does not apply to college or vocational students. It does create incentives for business owners to take a risk and invest in critical first jobs for high school students. It does help provide support for our small town businesses and students who are disproportionately hurt by the increased minimum wage.
This past week, LB 599 advanced through the first of three rounds of floor debate with almost 2/3rds of the Legislature’s support. My colleagues and I recognize our responsibility to provide and maintain vital opportunities for our next generation. This bill is important to our communities, small businesses, and our future workforce.
Good public policy recognizes that sweeping generalized regulations can have negative impacts on specific groups and seeks to correct those injustices. That is the goal of LB 599: to correct a negative situation for youth workers in our state that Nebraska voters would never intend to create. The difference between $9 per hour and $8 per hour pales in comparison to the difference between $8 per hour and $0 income. That is the impact we are talking about.
As always, I appreciate your input on LB 599 and any issue before the Legislature. To contact my office, please call 402-471-2732 or email at email@example.com. For daily updates, please follow me on Twitter at @JohnKuehnDVM.
Senator John Kuehn, District 38