At Work

Raise the minimum wage already; I’m tired of hearing about it

Just don’t expect doing so to change anything …

Sen Sanders and others have concluded that earning $31,200 a year is a living wage. Fine; if $15 an hour advocates believe that, just do it!

The sad part is that it will not make anything better for the people it’s intended to help. Here’s why.

If you can’t get out of a minimum wage job in eighteen years, you are trapped. So what is the real problem?

Poverty won’t go down, it will merely be redefined. In 2019 the official poverty level is $12,490. If the minimum wage (equal to $15,080 per year) increases to $31,200, how can the poverty level not increase as well?

Creating new jobs? That prediction is based on the notion that low wage workers with more money will spend more, create more demand and thus more jobs. Isn’t it more likely that higher income may be spent more on basic necessities like food, rent, possibly transportation or health care? Food you say? Assume more money is spent at the grocery store. There would have to be one heck of a lot of steady higher spending for a store to need to add staff. That additional spending could be from generic to brand names, from chicken to steak with no increased demand.

If all the promises for a $15.00 minimum wage are accurate, who in the world would object? In fact, logically shouldn’t every worker receive a 100% raise?

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6 replies »

  1. Right now, with unemployment low, the minimum wage debate is more of a fringe issue. But not for long. If the minimum wage is increased artificially to a level higher than what the least skilled worker’s productivity can earn for his employer, then the employer will find ways to not hire new employees. Automation is going to eliminate millions of jobs, that is widely accepted. Raising the minimum wage will accelerate the process.

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  2. Don’t give in. A $15/hour rate that is not earned, will result in increased unemployment for those whose efforts don’t cause an employer to offer such compensation. And remember, assuming that the person works full time, if the firm is one of 50+ workers, that will typically also qualify the worker for medical coverage – estimated to cost $20,000+ per year for a family.

    What may happen is that hours will be reduced, and the individual won’t be eligible for health coverage, forced to work part time, replaced by others willing to work part time or, increasingly automation.

    Remember that today, there are more jobs than unemployed, so generally speaking many of those who continue to workfor minimum wages are those whose contributions only justify such compensation.

    Even those with no particular skills but a work ethic and history can generally, quickly and easily justify higher wages – life not with the current employer, then with the next.

    Finally, if wages are set above productivity by government fiat, guess who gets the pink slip when the next recession arrives.

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    • 50 percent of workers make less than $30,000 per year. Most people working minimum wage jobs, work less than 30 hours per week, so no extra benefits will be coming to them. The problem of not raising the minimum wage since 2009, is people working just above minimum wage have seen no increase in their wages. If minimum wage is increased it pushes all wages up = more Social Security and income taxes collected. Then when lower wage workers reach retirement the bigger SS check will help. Since 2008 Montana has increased the minimum wage the amount of the government COLA, it is now $8.50. At $8.50 in 2019 these people are being underpaid vs what they are making for the company, each day.
      I have seen more new companies move into Montana since 2008, than between 1998 and 2008, so having a higher minimum wage does not seem to be a problem.
      It is passed time to index the federal minimum wage to inflation. If it is ok to give government employees and social security folks a COLA, then it should be ok to give minimum wage workers a COLA. Then no one will be using minimum wage as a political vote getting tool.

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      • From the article above, $6.50 in 2000 would be $9.58 in 2018 if raised for inflation ( 45.9% ) for those 18 years. Yes, $9.58 is more than $7.65 but a far less than $15.00. Going from $6.50 to $15.00 would be 130.7% change if it happened tomorrow. During that same time period, my published union wage scales increased 74.1%. During the last 18 years healthcare costs went nuts and increased faster than the rate of inflation. I am sure that the non-cash benefit part of my compensation also went up by more than 45.9% during that time. A 130% increase almost looks reasonable.

        So indexing minimum wage would seem very fair. However, in this global economy, it is a race to the bottom with the country paying the lowest wage. You can have your $15/hr job until it gets shipped overseas. Those that are left unemployed will drive down wages for the few unskilled jobs left and that is exactly what has happen for the past 4 decades.

        Minimum wage should be raised, but by what amount and how fast needs to be done carefully.
        The indexing needs to be put in the hands of an uncaring bureaucrat and not put into the hands of emotional people or politicians who will want to buy votes every year.

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