Higher Pay for Low-Wage Workers Is Good for Employers and Kids

It’s a popular misconception that low-wage food-service jobs are held only by teenagers or retired people looking to make a little money. The Bureau of Labor Statistics shows that the average age of a food-service worker is 29; USA Today reports that the Restaurant Association’s analysis of census data shows that more than 25 percent of fast-food workers are heads of household. The idea of teenagers on roller skates delivering hamburgers to your car window is a 30-year-old fantasy: Dads and moms are slinging fries and often working two or three jobs to pay the rent and keep the kids in shoes. These low-paying jobs are not just for kids earning a little beer money.

Justin Wolfers and Jan Zilinsky, economists at the Peterson Institute for International Economics, published an article yesterday arguing that higher pay for low-wage workers in general is good for business: It increases employee productivity and customer satisfaction and reduces turnover, all of which have financial benefits for the employer. So this is good news: Any case where employers will see a return on their fatter paycheck investment is obviously going to give them incentive to raise wages.

“When one parent has a well-paying job, the non-working parent can spend a little bit more time looking for a job that matches his or her skills, qualifications, and interests.”

But hey, let’s forget about employers for a minute and consider the community as a whole. Higher wages benefit entire families, especially children. In an email, Zilinsky notes that parents making higher wages would be able to provide a more stable household as a result of their ability to accumulate savings, less stress and hopefully more than basic (or no) health benefits.

He adds, “Also, for people who recently became parents, there is less intense pressure for one of the parents to immediately return to work. Or, when one parent decides that a career change would be appropriate, the couple can devote more time to searching for an opening that is a good fit. When one parent has a well-paying job, the non-working parent can spend a little bit more time looking for a job that matches his or her skills, qualifications, and interests.”

There’s also ample evidence that higher wages mean healthier people. Take a look at this study, published in 2012: “Doubling the wage was associated with 25–30 percent lower chances of hypertension for persons aged 25–44 years.”

Children certainly benefit from healthy parents; they benefit from living in homes in which eviction is not imminent; they benefit from a parent fixing them dinner in a calm fashion rather than fixing dinner while also freaking out over a car repair or a medical bill. Children in unstable homes, with frequent moves and school changes, don’t do very well in school. Children living in poverty must adapt to stressful conditions that middle-class children don’t have to face, and it affects their academic performance.

So, yes. Raising wages is good for workers, and it may even be good for employers. But a major beneficiary would be kids, who are, after all, the next generation of workers and employers.