Saturday, September 6, 2014

Let's Raise The Minimum Wage... And Everything Else

Thousands of fast food workers went on strike across the country this week demanding that the minimum wage be raised to $15 an hour. Some people support the raise while others see the consequences of such an act and believe it's a bad idea. Let's take a look at it.

According to Forbes Magazine, any raise in the minimum wage over about 45% of the current minimum wage, whether it's the federal minimum of $7.25 or the higher minimum paid by some states, will cause job loss. The higher the percentage over 45%, the higher the number of jobs lost, according to Forbes.

The minimum wage in Seattle was raised by 60 % of the previous minimum wage set by the state. Forbes predicts that teenagers, particularly high school graduates, will be the first to feel the effects of the job losses as businesses will be more likely to hire an unemployed college graduate over a high school graduate when both are willing to work for the same pay.

What other consequences could there be? The following is an example published in an article by Forbes:

'While attending an event at a SeaTac hotel last week, I met two women who receive the $15/hour minimum wage. SeaTac has implemented the new law on Jan. 1. I met the women while they were working. One was a waitress and the other was cleaning the hallway.

“Are you happy with the $15 wage?” I asked the full-time cleaning lady.

“It sounds good, but it’s not good,” the woman said.

“Why?” I asked.

“I lost my 401k, health insurance, paid holiday, and vacation,” she responded. “No more free food,” she added.

The hotel used to feed her. Now, she has to bring her own food. Also, no overtime, she said. She used to work extra hours and received overtime pay.

What else? I asked.

“I have to pay for parking,” she said.

I then asked the part-time waitress, who was part of the catering staff.

“Yes, I’ve got $15 an hour, but all my tips are now much less,” she said. 

Before the new wage law was implemented, her hourly wage was $7. But her tips added to more than $15 an hour. Yes, she used to receive free food and parking. Now, she has to bring her own food and pay for parking.'

Some will scream about corporate greed but let us not forget that all businesses, from small mom and pop stores to large corporations, were started for the purpose of making a profit by providing goods and services to the public. I don't know any business owner who one day decided to open a business just so he/she could employ others. I suppose it's possible but I've never heard of it. For all its claims about creating jobs for people by improving America's infrastructure, the Obama administration hasn't done it either.

Some will say a business or corporation doesn't need to make millions or billions of dollars in profit and that such profits are evil and/or immoral, etc. They vilify corporate profit and corporate greed. Yet, as we saw during the "Occupy Wall Street" movement - many of those same people have no problem purchasing and utilizing items such as iPhones and iPads, made and sold by a corporation that's worth $185 billion. It seems corporate profit and greed is evil unless that corporation makes a product you like and want to own.

According to research by the Heritage Foundation, an increase in minimum wages forced on fast food restaurants will raise the consumer prices of their goods by 38%. Your Big Mac meal will go from an average of $5.69 to $7.82. Chipotle's Steak Burrito Bowl will go from $6.65 to $9.18. Burger King's Whopper meal will go from $6.15 to $8.46. Get the picture?

The thing some people either don't or refuse to understand is that if you raise the minimum wage too much it causes consumer prices to go up, thus negating the raise. How hard is that to understand?

I know some liberals who will say "I will be happy to pay the higher prices so the employees can earn a decent wage." These are the same liberals who say they would be happy to pay more taxes to help the government increase revenue - but when you tell them they can do that on their own they refuse, saying "I won't just give my money away to the government."  Wait...  huh?

Several years ago I worked for a couple of ladies who owned a small bakery/bistro in Ohio. They both worked full time in the store and had four part-time employees who they could only pay minimum wage because they weren't making a huge profit. In fact - there were times when they didn't take paychecks themselves so they could pay their employees. They enjoyed the business and were great to work for. I took the job for some extra cash and for something to do, and stayed because I enjoyed their friendship. 

My point is - a huge raise in the minimum wage would put these ladies out of business. They wouldn't be able to run the business by themselves 7 days a week and a 100% raise of the minimum wage would put at least two of their employees out of a job. This is progress?

Those pushing the $15 an hour minimum wage are thinking only of themselves - but they're not really because they might be pushing themselves right out work. Corporations are always going to make a profit. That's what they do. The government, at least so far, does not have the authority to regulate the salaries of CEOs, nor should they. That's not part of their responsibility. And even though our millionaire President says "At some point you've made enough money," while his own bank account continues to grow, successful corporations will continue to pay their CEO's for that success. That's how the free market works.

I support raising the minimum wage by a small percentage - one that won't create job loss and drive small businesses out of business. But you know what? People who work in the fast food industry, whose skills amount to flipping burgers properly, dropping fries into the oil and taking them out when the timer goes off, and throwing sandwiches together on an assembly line, don't deserve the same wages as someone who does physical labor, has a marketable skill or certification, and/or took a minimum wage job and worked his/her way up. 

Here's some advice...  want a better paying job? Get an education or vocational training and make yourself marketable. Train yourself to be something other than an entry-level worker. There are jobs out there for people with education, training and/or marketable skills. Pick one and work toward it.

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