Minimum Wage

WE NEED TO RAISE THE MINIMUM WAGE!!!!

I know, I know – it is not going to happen anytime soon.  Not with the POS in the White House and the Conservative marionettes in Congress.  Nevertheless, that does not change the facts that the Federal minimum wage, as it currently exists is a travesty.

Some states have attempted to correct it to some degree by making the minimum wage within their borders higher than the federal requirement but that is not a solution and we all know it.

The big problem is that raising the minimum wage is truly only a small, insignificant solution to the overall problem.  Admittedly, if you are at the bottom of the pay scale, you are only concerned with the now, but it is imperative that people who are in charge look further into the problem to develop a more long-term solution as well.

As had occurred recently, campaigning about raising minimum wages without solving anything else is specious, ultimately solves nothing, and just defers the problem to the next person down the line.

 

OBJECTIONS TO RAISING MINIMUM WAGE

Every time a proposal to raise minimum wage comes out I hear the same objections from businesspeople.

• I will have to fire people because I cannot afford to pay them anymore.
• Raising wages will put me out of business because I can no longer be competitive.
• People will not being willing or able to pay for my goods/services because I will have to raise my prices.

Sorry, Skippy, that or any other arguments just do not fly in my opinion.  You are focused on running a business but it would behoove you to get a little prospective.  If your employees cannot live on what you are paying them, you should pay them more.

First off, you are not going to fire anyone because you cannot afford to pay him or her the new wages, unless business does truly drop.  Do you know why I know that?  You are not a flipping charity.  If you do not need them now, you would have fired them long ago.  Changes in wages is not going to automatically change your demand for labor.  You are not firing anyone.

Second, you have no reason to think that you will have a competitive disadvantage.  After all, your competitors will be paying the same minimum wage as you, especially if it is a federal minimum wage.  In fact, you may gain with a federal minimum wage because now you may be currently be competing with a business in a state where the minimum wage is lower than the state you are residing in.

As regards to the people not paying for your goods or services if you raise you prices, you might have a point to a degree, but only a degree.  If you raise you prices, people who do not get a wage increase will likely have less disposable income as prices inevitably increase because of wages increasing.  Therefore, they will no longer be your customer.  However, the people who do now have a little disposable income, those who have increase minimums wages, are new target customers.  Maybe just a tradeoff.  In addition, lest we forget – it will not be long that those who are being paid above minimum wage will demand and get adjustments to their current wages to continue to separate them from the minimum wage earners.

In short, there may some concern, but not enough for a reasonable person to avoid the increase of minimum wage in order to protect the viability of businesses.  I remember several years ago when the minimum wage in my state was raised.  The result in the casual dining restaurant that I ate lunch at: they raised the price of coffee.  That was it – sum total.  The minimum wage raise was significant and the price of coffee covered it.

One caveat – you may have an issue with minimum wage if your goods are competing with foreign imports.  But you are probably already upside down on that issue and need to have that addressed with import duties and restrictions.

 

WHAT SHOULD THE NEW WAGE BE?

Hell, I do not know.  Neither, do I suspect, does anyone else.  I heard in the last election cycle, Bernie Sanders; bandy about $15.00/hour.  Why that number?  I do not now.  In fact, I later learned that Bernie did not expect it to be the final number.  He tossed it out as a number to be negotiated down in Congress.

Shhhhhhhhh!  Do not tell his followers!  They will swear that he promised $15.00/hour.  My bad for telling this secret!

Nevertheless, this is not a bash Bernie diatribe.  It is just to point out that no one has a clue as to what the minimum wage should be.  They never have a real idea.  Why?  Because it really does not matter what you set it to.  Ultimately, the economy will adjust itself to the new minimum.  It just sets the new bottom, whatever it is.

On the short term, the people getting the new minimum wage will have the ability to pay their bills and improve their quality of life, albeit marginally.  Ultimately, prices will catch up because goods and service prices will rise to capture any increase they have garnered.

That does not mean that something should not be done.  We need to raise the minimum wage now because it has been so long that it has to catch up to the increase that have already occurred that people are suffering.

Although goods and services rise to correct to minimum wage, it is imperative that minimum wage be raised periodically to correct for increases of goods and services.  This has not been done in so long that those still being paid minimum wage are actually in poverty and they should not be.  They have not kept up to the increases in goods and services since the last increase in minimum wage.

So what should the new minimum wage be?  I truly do not know an exact number but it sure as hell should be better than it is now and it sure as hell should be better than below the poverty level.  So if it is $15.00/hour, I am all for it but I suspect that this is a number that, currently, will not fly.  I have no problem with it but if you want to get it passed, be reasonable.

My suggestion is to set a minimum wage at a level that takes the people out of the miserable level that they currently semi-exist in.  Then index it in some way to a cost-of-living number, adjusting periodically so that people at the bottom of the earning spectrum do not fall behind even when working their asses off.

 

SOME FINANCIAL CONSIDERATIONS

Although never addressed in all of the scenarios, one group that will be negatively affected by a raise in minimum wage will be retirees who have a fixed-income retirement payments.  A raise in minimum wage will not affect their retirement income one cent but will reduce the buying power of said benefit.  I know that while this type of income is not as common as it once was; it does exist.  I am not saying that the reduced buying power of these retirees is reason enough to hold off increasing minimum wage but it is an issue.  I do not have a solution; but I also know no one else has even brought up the issue.  That is too bad.  As it stands the solution is – SCREW THEM!  Maybe some thought should be given to this issue.

Social Security, and other inflation-linked, payments will likely rise within a relatively quick timeframe as inflation will be a reasonable result of the raise in minimum wage.  In the case of Social Security, this could have a major impact in the viability of life expectancy of Social Security.  This needs to be addressed legislatively as part of the complete process and not reacted to after it happens.

 

OBSERVATIONS

I guess that the biggest thing that I have learned as I have talked about the minimum wage and thought about it is how much things have changed in my lifetime.  Frankly, I never even was aware of what the minimum wage was once I got out of my teens.  By then, I was making enough in excess of minimum wage that I really was not aware of what it was.  Even when I was making crappy money, it was more than minimum wage.  Of course, I did not have to rely on service industry jobs for my primary source of income.  Having tried to make it on the wages I did get, imagining making it on minimum wage is awful.

I had marketable skills that paid better than minimum wage.  Today, without proper education and training, most people are relegated to service positions.  Moreover, these positions are paid at or near minimum wage.

Even when starting out in my working career, there were decent paid jobs available, in mills and manufacturing.  Now they are almost non-existent.  Once the low-paying service jobs that were “part time” or “get by” have now become permanent jobs out of necessity.  This has necessitated an even more proactive approach to make minimum wage reasonable.  My God, a single person working full-time should not be on food stamps.

But get real, people.  Minimum wage is just that, minimum.  You are not going to get ahead earning at or near minimum wage.  You are not going to support a decent lifestyle at or near minimum wage.  You are not going to support a family at or near minimum wage.  The only exception is if you work two or three full-time jobs and even at that, it is iffy at best.

You have to be proactive.  Educate yourself, work your ass off, do what it takes.  I know you think you are doing that now, but obviously you have to ratchet it up a few notches.

I was not born with a silver spoon in my mouth.  Yes, I had work opportunities that you may not have, but I went without work at times because I did not have the education, experience, or whatever to hold the job.  Therefore, I took lower paying jobs and worked my way up.  I continued to advance my education.  Hell, I graduated college just before my 48^th birthday by working full-time and going to school full-time.  And by working full-time, I mean 50-60 hours a week (70 or 80 hours were not unheard of), which I did for my entire career – and I was on salary meaning I did not paid any differently.  You do not get it for nothing – you have to earn it.  Work your ass off, educate yourself, and change careers if you have to.  Minimum wage, even if corrected like I propose is not going to give you the American dream.  It is going to become a continual life of quiet desperation at best and a damned nightmare at worst.

If you are over 30 and still worried about the minimum wage, you have a far bigger problem than changes in the Federal standard, you have a you problem.

CAVEAT: OF COURSE, I AM MAKING THE ABOVE COMMENTS TO THOSE WHO HAVE THE PHYSICAL, EMOTIONAL, OR MENTAL CAPABILITIES TO MAKE THE CHANGES IN THEIR LIVES TO OVERCOME BEING ON MINIMUM WAGE.  DO NOT CONTACT ME WITH EXCUSES AS TO WHY YOU OR OTHERS ARE INCAPABLE OF MAKING CHANGES – IF YOU CANNOT CHANGE, YOU CANNOT CHANGE.  THE ABOVE IS ADDRESSED TO THOSE WHO CAN.