We live and operate 20 minutes away from a major university with a great graphic design program and the original owner's daughter earned a degree in visual communications there. Going through her old files from the first couple of years and our own experiences with applicants and potential employees trying out for positions here, I'd concur with Rick's observations on several fronts.
I'd add that some of the attitudinal perceptions being projected onto students by their instructors about their monetary value and lack of need to work their way up to good jobs has been a real eye opener for us. Not all, but many have walked into an interview here with minimal work experience of any kind, amateur level portfolios with little practical, real world experience of any kind and are not only condescending but demanding of starting wages in the $20+ per hour range.
For any of our openings we offer a full day, paid shift or more where about 3-4 normal hours worth of simple, easy, knock them out of the park layout work using Illustrator and Photoshop is given with 8 hours to complete. I'm talking about No parking here type signs and other routine layouts many of us can knock out in minutes, not hours. I'd estimate that anywhere from 85-100% of applicants are unable to complete the work in anything close to being presentable to clients with completely illogical use of or lack of knowledge of the tools available in the software meant to make certain tasks simpler and easier to accomplish.
Even some of the really talented designers with multiple years of experience we've hired have little knowledge of the differences and special technical needs signage design demands until they receive training by us or others.
To the OP, I'd recommend that you pretest all applicants at your expense in order to assess both their software, design proficiency and to see how they accept or don't accept any critique of their work. Any employee you hire regardless of hours worked needs to be able to produce work at an acceptable level that your customers will embrace or its not worth having. They also need to be able to operate in an atmosphere where their ego doesn't inject a negative tone or make you hesitate from discussing any deficiencies in the work they are being paid to produce.
We start folks anywhere between $17.50-$21.50 for full time depending on experience and skillsets.