Economic distress for students in the 2016 election
As the campaign trail continues to heat up, there are many issues that the millennial generation should focus on when considering who to cast their vote for. The presidential candidates are both specifically trying to target important issues in their campaign for the millennial generation—for the college-age students who could have a huge impact in this year’s election.
What is the most important issue for college students to consider before casting their vote in November? Considering that graduation, for some, is as close as a semester away, or, for others, even in just a few years, the position of the economy will have a substantial influence on college students who are searching for careers.
A major issue within the United States’ economy has been the unemployment rate. According to May 2015 article by the Economic Policy Institute, “for young college graduates, the unemployment rate is currently 7.2 percent (compared with 5.5 percent in 2007), and the underemployment rate is 14.9 percent (compared with 9.6 percent in 2007).” These numbers are clearly larger than they have been in the past and, thus, may limit the number of job opportunities available to college students searching for employment. There are a number of policies that are causing such high unemployment rates for recent college graduates that need to be considered.
One such issue is the battle for a higher minimum wage that has been a major contention across various states in the last few years. In one example, Jonah Goldberg from the Los Angeles Times describes the unintended impact on the economy that an increased minimum wage has had California: the cost for customers have gone up. He cites one company owner, Felix Seo of Joompy, who now has to pay an extra $1.50 per dress to be made. As a result, this extra charge must fall on the customer who, in turn, will be less likely to purchase the now more expensive good. Seo then went on to say how the business will likely need to import clothes instead, which could decrease the number of employment opportunities within the United States and further hurt the employment rate.
There have been increased legislation that aim to increase the minimum wage in both the PA House of Representatives and the State Senate. According to PA.gov, Governor Tom Wolf recently signed an executive order that will pay at least $10.15 an hour to the governor’s employees. Similarly, Pennsylvania State Senator Christine Tartaglione just last year proposed a bill that would raise the minimum wage to $10.10 an hour. While flexible wages can be seen as a benefit to low-income workers, the effects on unemployment must be considered. According to Ben Gitis from American Action Forum, the federal minimum wage is $7.25/hour and “in 2013, a $1 increase in the minimum wage was associated with a 1.48 percentage point increase in the unemployment rate, [and] a .18 percentage point decrease in the net job growth rate…”
William Dunkelberg issues a warning in his 2012 Forbes article that is still relevant today: “Firms cannot pay a worker more than the value the worker brings to the firm,” he writes. “Raising the minimum denies more low skilled workers the opportunity to get a job and receive ‘on the job’ training.” I believe that college students should be wary of these unintentional consequences of an increased minimum wage.
Another major problem for college students in the economy is the crippling student loans that many students carry after graduation. According to the Institute for College Access and Success, the state average for Pennsylvania Student Debt for a Public and Private Non-Profit 4-year institution is $33,264, with 70 percent of students in debt. Pennsylvania is ranked third in the country for student debt. Student debt alone has the ability to harm the economy as students have less spending power to contribute to other businesses, which decreases economic stimulus.
Additionally, many students are discouraged from pursuing entrepreneurship because they do not have the funds for a new business with the loans hanging over their heads. While an economy that is sensitive to changes in debts and wages may seem potentially harmful because of its unpredictable nature, it can be beneficial as long as students plan for future finances.
The major issue college students will have to decide when polls open in November is what policies they want the government to advocate for when it comes to the economy. Voters will have to determine where to draw the line. When is there too much government spending that results in fiscal irresponsibility and a rapidly increasing national debt? Our economic stability as a nation will have a direct impact on the type of job market graduates will enter in the future, so as college students, it is our responsibility to be mindful of economic issues on Nov. 8.
