Youth Minimum Wage: Nebraska Considers Lower Minimum Pay Rate For Young Workers

Just months after voters in five states approved minimum wage hikes by referendum, a couple of state legislatures are moving to rein them in. Nebraska may soon join South Dakota in exempting young employees from new voter-backed pay hikes.

“I don’t think voters approved an increase thinking in terms of a first job for high school students,” Nebraska state Sen. Laura Ebke said. “It really refers more to the working poor, people who can’t make ends meet.”

Ebke sponsors legislation that would exempt people who are under 18 and do not have high school diplomas or child dependents from the new wage law. (Under the referendum approved last November, Nebraska’s hourly minimum wage moved to $8 in January, and will hit $9 in 2016.) Her bill creates a separate pay rate for the category of “young student workers.” It would be either $8 an hour, or 85 percent of the federal minimum, whichever is higher. The federal pay floor currently stands at $7.25 an hour, and Republican majorities in both chambers of Congress oppose an increase.

'Operating On The Margins'

Ebke said the proposed legislation was brought to her by the Nebraska Grocery Industry Association, and echoes concerns from small businesses in her rural constituency, in the southeastern part of the state. “You have a lot of small businesses operating on the margins as it is,” she said, and some of them tell her they can’t afford the looming $9 rate without laying people off. A lot of those businesses -- small grocery stores and hardware stores -- provide a valuable first job for young people, she said.

But critics say the proposal amounts to age discrimination and flouts the will of voters, who passed the referendum by a roughly 60-40 margin.

“It targets a politically voiceless group of the population,” said state Sen. Adam Morfeld, who represents northeast Lincoln -- one of the state’s few urban areas. He led an unsuccessful filibuster against the proposal last week. For the bill to reach the desk of Republican Gov. Pete Ricketts, supporters need 33 votes from the unicameral Legislature’s 49 members. That vote could happen as soon as Thursday, and both sides say the head counts are in their favor.

Class issues hover over the debate, too. In the state’s more working-class, urban enclaves of Omaha and Lincoln, young people aren’t always just working for extra spending money or experience. “They’re working to put food on the table,” said Brodey Weber, 17, a junior at Lincoln North Star High School, where he heads the Young Democrats club and has tried to raise awareness of the bill. Weber said dozens of his classmates work minimum-wage jobs -- almost exclusively in fast food and retail -- to help their families make ends meet.

From 2000 to 2010, Nebraska’s statewide median income fell by 5 percent, a trend driven by growing inequality in Lancaster County (which includes Lincoln) and Douglas County (which includes Omaha).

The state also has an outsized share of young workers. Nationwide, about 34 percent of people aged 16 to 19 are in the labor force, according to the Bureau of Labor Statistics. But in Nebraska, that figure is 52 percent. Only Iowa had a higher rate.

'A Discrimination Issue'

Weber said he plans to work this summer at a popular clothing retailer, hoping to earn some cash to help pay for his college education. He said it makes little sense that people in his age group should be paid less for doing the same type of work that older employees are doing. “I think it’s ridiculous,” he said. “It’s just a discrimination issue.”

In February, South Dakota's Republican Gov. Dennis Daugaard signed legislation carving out a new $7.50 hourly wage for people under 18 -- $1 less than the voter-approved wage that took effect in January. Ebke, the Nebraska state senator, said she didn’t hear about the South Dakota bill until after she introduced her legislation.

“This idea that teens are negatively impacted by minimum wage increases has been bouncing around on the right for a while,” said Brendan Fischer, general counsel for the Center for Media and Democracy, which has tracked efforts to limit wage increases on the state and local levels.

The American Legislative Exchange Council (ALEC), which has designed state bills that decrease wages on public works projects and undercut local wage hikes, has argued that teenagers suffer from minimum wage increases. So too have the Heritage Foundation and the Employment Policies Institute, a pair of conservative think tanks.

Alaska and Arkansas also approved minimum wage increases last November. Neither state, however, appears to be considering bills like those in South Dakota and Nebraska.

The Nebraska Grocery Industry Association did not respond to a request for comment.