The minimum wage is defined as the lowest wage that an employer is legally allowed to pay. This concept was first brought to power by the Fair Labor Standards Act in 1938 and has been enforced ever since. Currently, the minimum wage for Rhode Island is $7.40 per hour and most employers, including the University, must adhere to it. But why are private academic institutions in the United States not exempt from minimum wage? Can we ever get rid of the minimum wage entirely?
Brown utilizes a graded approach to employment, and the associated hourly rate is based on the level of responsibility and skills required to perform the job. Students paid under employment grade A receive $8.20 to $9.55 per hour; B, from $8.45 to $10.05; C, from $8.70 to $10.55; D, from $8.95 to $11.05; and E, above $9.20. The grade is determined using a simple, single-page form that ascertains the level of expertise a job requires with regard to skill, supervisory requirements, work flow, decision making, scope of work and confidentiality requirements, etc. Not only is this form ambiguous in determining the real requirements and pressure of the job, but it is ineffective. If we let the free market within the campus determine the job's pay, it would not only be highly effective, but also fair.
Most students employed by Brown would cringe at the idea of no minimum wage, since this could lead to lower pay and more competition. Their fear of lower pay is only so reasonable. For jobs that require special skills, such as programming, fewer students will be willing to devote time to such a job for less pay. As a result, the salaries will have to rise to attract potential employees with well-honed skills. On the other hand, jobs that require less specialized knowledge will find many applicants, and so a fear of lower pay is justifiable in this situation.
A minimum-wage exemption would also ease funding restrictions that prevent Brown employers from hiring more employees. This could potentially reduce competition by expanding positions, allowing more students to work. Higher student employment in turn will lead to more research and giving more back to the community.
A lowered pay rate also gives students who have next-to-no experience a chance to apply to various jobs and discover which career suits them best. Because new recruits would get entry-level jobs with inconsequential pay, their decision to commit or quit may be made without taking a substantial salary into consideration, leaving the truly important criteria — namely, job satisfaction — with greater weight in the decision-making process. Employers are then left with a dedicated, productive work staff instead of employees who simply squat in their position and are paid more than they deserve because of seniority and raises.
I would also like to mention that removal of the minimum wage, a form of price floor, does not always lead to reduction of pay. In fact, it is purely meritocratic in nature and evolves with the type of student body. If, for example, in a certain year students do not wish to work for Brown Dining Services because it involves a lot of mental and physical stress, BuDS would increase the pay rate by a moderate amount to attract students. If an employer tries to exploit the employee by paying next-to-nothing wages, then there would be fewer applicants.
Miles Goldman '11, the Lab Supervisor for the 3D Shape Perception Laboratory (in the Department of Cognitive and Linguistic Sciences) received strong applications from 30 people who applied for a single Research Assistant position in the lab. Let's analyze this situation — as the pay rate is $9, only one student could be employed. The rest were left wondering why they weren't good enough. Now, if the salary was $4.50 per hour, two assistants could have been hired, which would lead to a higher distribution of work, more efficiency and competition amongst the employees for a raise. Furthermore, having more employees offers a safeguard against absences, such as those caused by illness and schoolwork-related commitments.
By having individually assigned raises, employers can make sure that their employees are keen and effective. Getting a raise would also positively affect the morale of the employees and make sure the job remains merit-based. If this idea of there being no (or less) minimum wage works for private academic institutions, I am sure it will lead to the Fair Labor Standards Act being repealed altogether and more employment in this recessive, jobless economy (where the teen unemployment rate is 25.5%, the highest since 1948). The minimum wage, after all, has the worst effects on vulnerable workers that include teenagers, blacks and women with limited skills.
Thomas Sowell, an American economist whose research shows that increasing minimum wages for workers in the sugar industry of Puerto Rico led to a rise of unemployment in that particular industry, famously quoted, "The real minimum wage is zero." I believe he is right.
Manas Gautam '12 gives lessons in fishing and does not create fake jobs by spending billions of dollars. He can be reached at manas_gautam [at] brown.edu.