Laura Sherman
Honors Core 1
10/3/18
Dear Congressman Bacon,
Minimum wage workers lack any benefits that are required to be provided by their employers. I want businesses to offer minimum wage workers a benefit that would help students afford college tuition. As a representative of my state and district, I look to you to change policy and affect action on this issue. This tuition benefit would be good for employees and employers.
I have personally experienced working as an employee for right around the minimum wage. My job was cashiering at a Hy-Vee grocery store and I made $9.25/hr which was only twenty five cents over Nebraska’s minimum wage of $9/hr. This job was not glamorous, but I needed it to help pay for college. Through working at this specific job, I noticed the revolving door that is the minimum wage work force. One day you would work with someone and the next month they would be gone. They would leave and be on to the next minimum wage job. If employees didn’t leave, they would cut back on their hours. If they cared about their job in the first place, soon they would simply just stop caring about their work as much. This was not due to Hy-Vee as they created a good work environment. In fact, these attitudes can be found at most minimum wage jobs. Employees have a lack of ownership and pride in the work they do. Before Hy-Vee, I worked bussing tables at Jimmy’s Egg. At this job, I caught a glimpse of the trials of being a waitress. Waitresses can be paid as low as $2.13/hr in Nebraska. This means that they rely heavily on tips to fund their paycheck. Waitressing is hard work and it can be difficult to gauge how much you will be paid for that work. I remember specifically a waitress that worked at Jimmy’s Egg and was going to Metropolitan Community College in Omaha. She worked hard every week, but never knew if the tips would cover her education expenses. When I left that job, she was even considering taking on a second job. It is workers like this that deserve support from a company that they work so hard for.
Many young adults work at a minimum wage job. “Among employed teenagers (ages 16 to 19) paid by the hour, about 8 percent earned the minimum wage or less.”(“Characteristics of Minimum Wage Workers”) This of course is based of the federal minimum wage, but many states set their own minimum wage at or below this. Many young adults are looking to use their minimum wage jobs to fund a college degree. In 2017, 66.7% of high school graduates age 16 to 24 enrolled in college or a University.(“College Enrollment and Work Activity”) While college is not for everyone, a huge reason that people do not go to college is because they can’t afford it. At my high school, my counselor harped on the fact that college tuition is expensive and how horrible student debt is. He suggested that your ability to afford college is the only factor to consider when deciding whether or not to go to college. His speech left students feeling upset and deflated. This kind of message is not uncommon and does not stray from the reality of rising tuition costs. The average rate of inflation since the 1980s has been about 3.2% and tuition costs have increased at about 7% per year. Even with the rising cost of college, students still choose to attend and are forced to take on loans. (Maloy 8) “In the summer of 2013, student debt levels far outpaced other forms of consumer debt and reached an unprecedented level of $1.2 trillion.”(Maloy 21) The average student loan debt nationally is about $30,100 and Nebraska sits slightly below that at $26,865 for the average student debt.(DiGangi) That amount of debt can feel unjust and unfair, especially if you don’t end up in a high paying job. I have had to face the realities of student loans when deciding to attend the University of Sioux Falls. I tried desperately to receive as many scholarships as possible, but they failed to cover the cost of tuition. My disappointment came when my FASFA came back, granting me only loans. As a freshman in college, it is hard to wrap my brain around the idea that I am already collecting debt as an 18-year-old. However, companies have the ability to alleviate this debt for their workers.
A tuition benefit provided by companies, may appear to only benefit the employee. Why would companies want to invest more in their minimum wage work force? More specifically why would Nebraska want to pioneer something that would cost companies more money? I see that these are valid questions that highlight the tension of the private good of the employee versus the public good of the company. However, the extra money spent on tuition benefits play a bigger role in reducing student debt. This begs the question as to why companies should care about student debt. Research has shown that student debt is effecting small business ownership and homeownership rates. These two areas show that students with debt have a difficult time participating in the economy, thus negatively effecting the economy as a whole. (Harker 6) Companies have a vested interest in the economy going well. They also benefit from a work force that is more dedicated. The increase in dedication comes from an increased sense of purpose. As someone who has experienced a minimum wage job, I can tell you it is hard to find purpose in your role. If I were given the opportunity to be aided in affording a college degree, I would be a happier and more dedicated worker. This same principle is used in salary paid jobs that offer benefits such as health care, a 401K plan, or vacation time. If companies provide tuition benefits, a benefit that would mean something to their employees, they are sure to see a positive change in the dedication of their workforce.
With all this information pointing towards the need for a tuition benefits program, I’m sure you are left wondering how a program would practically play out. The first aspect of this benefit would be that the employee would have to work for the company for three months. Once the three months are up, the employee can sign an intention for higher education. This would be a carefully written document that outlines an employees intent to use the money for a higher education. It would also state that the money invested can be used only for higher education. The benefit plan will work much like a 401K plan. The employee will choose to set aside a certain percentage of their pay check. The company will then match this percentage up to 3%. The money will be invested in a plan, such as a 529 or NEST plan. This type of investment opportunity is unique to the great state of Nebraska. In this plan, investment experts take the money and invest in a respectable portfolio.(“Features and Benefits of NEST 529”) Once the beneficiary, in this case the employee, is of age, he or she can withdraw the money at any time. This example is clearly geared toward Nebraska, but can be adjusted to fit other states. There are other investment avenues that the company can send an employees money down. Whatever investment plan is used, the money will go a long way in helping fund a higher education for that employee.
It is clear how beneficial a tuition benefits program would be if implemented in Nebraska. As a congressman of Nebraska, you represent Nebraskans interests on the national stage and have the unique ability to effect change nationally. Tuition benefits would serve Nebraskan students and families interests greatly. I would love to see this tuition benefits program implemented in all 50 states and you have the power to do that. I implore you to take this idea and transform it into a life changing policy for students all across America.
Sincerely,
Laura Sherman