>Effect of Higher Minimum Wage on Student Workers

This entry was posted by Friday, 15 December, 2006
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>I arrived home Saturday night from the YES Summit foggy after a long flight and still dumb-founded at the student loan debt burden that our future leaders of tomorrow are carrying with them as they begin their contribution to society. Then, to add to all this, I awoke the next day to see the following headline on the front page of our local newspaper the Toledo Blade, “College Kids in Ohio Face Pay Squeeze“.

You see, in November, Ohio voters passed a minimum wage increase intended to help raise the living standards for those in the lower paying jobs such as restaurants and other businesses. The affect on students was not considered. Michigan also passed a similar law.

Many universities and colleges are now scrambling to find funding in their budgets to cover the rising costs of the student workers due to this minimum wage increase. Many simply do not have it. Several anticipate lowering the number of hours the student works that will keep their costs the same or some will not re-hire for positions that will be soon vacated. A few feel they will be able to survive with the rising enrollment or find it elsewhere in their budgets.

Students employed outside the university will probably also be affected by less hours or less jobs available. Students working while attending school, build work ethic and experience that will advance them above others when seeking employment after graduation. With rising tuition costs, what is a student to do? Where can others help?

In Ohio, there is a proposed legislation to exempt the public universities from the minimum wage increase. However, this does not cover the dilemma that the private colleges are facing. Also, Ohio’s minimum wage will adjust annually for inflation. BUT, the US Budget’s funding from the Federal Work Study Program does not. This funding has remained flat despite tuition growing at a pace more than double inflation. This funding needs to be pegged to increase with inflation also or otherwise student work hours will continue to dwindle and students will be accumulating even more debt.

Credit unions and universities need to unite to petition Congress to increase the budget for work study and also petition our local governments as well. We also need to work with local businesses to hire students and be willing work around their schedules as part-time or full-time workers or interns.

What else can we do to help our future leaders? Any suggestions or comment are welcome. I was originally going to discuss dress code and societal changes in the definition of acceptable dress in the workplace but this topic seemed much more important.

3 Responses to “>Effect of Higher Minimum Wage on Student Workers”

  1. Dan

    >It also could affect those recently out of school looking for a job.

  2. Josh Jones

    >Ahh… the unintended consequences. In an effort to help those with low-paying jobs, a segment of that population is being harmed. But it’s not all doom and gloom, I think there are some positives that can come of this.

    In addition to your suggestions, I would also like to point out that individual credit unions can have a direct, and positive impact with this situation. Credit unions have a unique opportunity to offer financial education and appropriate services to assist these young adults caught in the wake of this issue and help them make the right financial decisions. And as you suggested, there is an interesting opportunity to partner with colleges and universities on this issue, which could lead to positive outcomes down the road.

    Just as credit unions helped people during the Great Depression, and other times of financial hardship, we can step up today and act as a partner for success with student workers, as well as the other entities affected by this situation.

  3. Kent Sugg

    >Well the news is out in just a few years the minimum wage will be at 7.25. Lets see how it will indeed effect student workers, and if it will improve the life of minimum wage employees.

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