fbpx

Latest Posts

Home

Facebook

Twitter

Search
About

Metro transit, unable to hire enough drivers at $19.94 an hour, launches an apprentice program

KSTP had a story this week titled ‘Metro Transit Turns to Apprentice Program to Address Bus Driver Shortage‘.

I’ve written previously about how Metro Transit is having trouble finding people to come and work for them at wages of $19.94 an hour. This is what you might expect to see given Minnesota’s alleged ‘labor shortage’. As labor demand increases relative to labor supply, the price of labor – wages – will increase.

As we testified before the Joint Economic Committee of Congress recently, starting in February there has been a notable uptick in wage increases in Minnesota, as Figure 1 shows (nominally, at least, I’ll say more about that tomorrow).

Figure 1: Average Hourly Earnings of All Employees: Total Private in Minnesota, Dollars per Hour, Monthly, Seasonally Adjusted

Source: Bureau of Labor Statistics

So, in Minnesota’s labor market, we have a demand increasing relative to supply, wages rising in nominal terms, and jobs going unfilled at $19.94 an hour. Why, then, do we have a campaign for Saint Paul to follow the bad example of Minneapolis and raise its minimum wage to $15 an hour? As I wrote last month,

If you are unsatisfied with your wage of $9.65 or $7.87, you can literally double that by going to work for Metro Transit. Instead of gathering in public from time to time, chanting and waving a placard in the hope that a politician will wave a magic wand, just fill in an application.

What is stopping you?

It may be the case that the workload of a Metro Transit bus driver is more than the worker currently has or that the schedule doesn’t work for them in some way. But this shows that there are benefits to minimum wage work in terms of flexibility and workload which offset, to some extent, the lower pay and benefits.

It may be that the worker currently on $9.65 doesn’t have a driving license and would need to get one to apply. This just makes the point that we should expect a job requiring more skills to pay more. It also begs the question of why you would expect an employer to pay you the higher minimum wage if your skills haven’t increased. And anyway, Metro Transit will train you.

The bottom line is that, if employers can’t hire at $19.94, there is no need at all for a legally mandated minimum wage of $15.

John Phelan is an economist at the Center of the American Experiment. 

Comments

Subscribe

Categories

Upcoming Events

  • Morning in Minnesota: St. Cloud

    Location: St. Cloud

    Sign up HERE! Courtyard by Marriott St. Cloud 404 West Saint Germain Street St. Cloud, MN, 56301 Please join Center of the American Experiment on Tuesday, July 21 for breakfast with Center policy fellow and education expert Catrin Wigfall as she explains K-12 education in the state and its persistent disparities despite decades of increased spending. Following her presentation, Catrin will lead a Q&A session. 7:30 AM Check In and Breakfast 8:00 AM Presentation 9:00 AM Conclude   Catrin Wigfall is a Policy Fellow at Center of the American Experiment. She is also the director of EducatedTeachersMN and EmployeeFreedomMN. Catrin’s…

    Register Now
  • Kristi Noem: The Courage to Reject a Shutdown

    Location: Online

    Sign up HERE! Join us Wednesday, July 8th for an interview with South Dakota Governor Kristi Noem over Zoom. In response to COVID-19, Noem defied the norm of a statewide shutdown and let South Dakotans choose for themselves what safety precautions to take. Tune in to this live online event to hear how Governor Noem preserved her state’s economy while still keeping citizens safe. Wednesday, July 8th at Noon CT Sign up HERE!  

    Register Now
  • Morning in Minnesota: Marshall

    Location: Marshall Golf Club

      Sign up for this event HERE! Please join Center of the American Experiment on Thursday, July 16 at Marshall Golf Club for a breakfast with Center economist, John Phelan, as he discusses Minnesota’s economic future. Following his presentation, John will lead a Q&A session. 7:30 AM Check In and Breakfast 8:00 AM Presentation 9:00 AM Conclude John Phelan is a graduate of Birkbeck College, University of London, where he earned a BSc in Economics, and of the London School of Economics where he earned an MSc. He worked in finance for ten years before becoming a professional economist. He…

    Register Now