Many businesses across the U.S., including in Michigan, are facing a labor shortage. In response, some companies are raising wages to attract and retain workers. For instance, it’s not unusual to drive by a fast-food chain and see “Hiring: up to $15 an hour” posted on their sign –– of course, this only means that select shifts will pay $15, while others will pay $13 or $14.

But despite statewide average low skill wages overtaking the state minimum wage of $9.87, wages on Calvin’s campus have been relatively stagnant and remain close to the legal minimum. This disequilibrium represents what economists call “market failure.” When markets fail, someone always wins and someone always loses. In this instance, student workers lose. 

Many students make minimum wage or near minimum wage. Last year, Chimes reported that many students benefited from a 22 cent hourly increase in the state minimum wage. Although many campus wages have risen slightly, they still hover close to the $10 mark. The starting wage for working in the dining halls, one of campus’ highest-paying student jobs, is $11 per hour. Even this is short of what similar work off campus pays.

It is clear that on-campus jobs pay below market rates. But should Calvin’s on-campus employers pay lower wages for the same work? No, student workers deserve the same wages as their off-campus peers.  

For two key reasons, employers on campus have some degree of what economists call “market power.” Think of this like bargaining leverage. First, many students do not have their own car. If you don’t have a car, and the inconvenience of figuring out public transportation is too high, then working on campus seems like the only option. Second, depending on visa type, some international students are prohibited from working off-campus. These factors combine to form a sort of captive market where on-campus employers tacitly (and unknowingly) collude to keep wages low. Economists call this scenario a “monopsony.”

Furthermore, Calvin issues guidance about wages to on-campus employers. The Student Employment Manual states that wages should be between minimum wage and $16 an hour. Although $16 per hour is higher than many low-skill employers are offered off campus, the suggested top wage is also said to be “limited to a small number of positions in a department or division.” Overall, the manual frames wages in a way that normalizes paying the minimum wage to student workers — even when market wages off campus have become much higher.

So how can we raise wages for student workers? For one, fostering competition between on-campus employers undoes their market power and forces employers to raise wages. This can be seen already in how the dining hall offers higher wages to attract workers. 

Additionally, reframing wages in the context of what is being paid in Grand Rapids, instead of what is laid out in the Student Employment Manual, would lead to fairer wages. 

Calvin as an institution promotes biblical justice as a core tenet in everything it does. It is in our motto, our chapel services and our classrooms. It is time that we start promoting justice in how students are paid for their work.