There is talk – again – of raising the Minimum Wage. Some bad ideas never die.
We are usually told about some poor soul trying to raise four kids on this meager income, and we are encouraged to believe that employers should be responsible for the needs of their employers. That could be a difficult task. A single student has very different needs than a mother of four. If the employer paid on the basis of need, the mother would earn much more than the student. But that wouldn’t be fair, would it? So how is this dilemma the responsibility of the employer?
Still, we are told we should pity the poor minimum wage workers, because they don’t make enough to live on. How can we help them? Should the minimum be raised?
First, let’s find out why they don’t earn more. After all, a lot of people do, so what makes the minimum wage earner so unfortunate?
There are no minimum wage doctors or lawyers. You can’t hire a plumber, an electrician or an auto mechanic for $7.25 an hour. We are willing to pay those people a lot more for their expertise. Employers pay more for skilled workers, too.
So, the best way to help those who are only making the minimum is to provide them with knowledge, skills and experience so they can command a higher wage.
It’s the difference between giving a man a fish, and teaching him how to fish.
Of course, that would take time and effort. In these days of instant gratification, we don’t like having to actually DO anything, or being told that we might have to wait for results.
Let’s do something NOW! Let’s just raise the minimum wage. So, instantly, everyone who only gets $7.25 today will get $9.00 tomorrow. Problem solved, right?
Every action has consequences.
The Minimum Wage earners probably have co-workers with a little more time and experience on the job, and who are paid a little more. Let’s say they make $7.50. Then, there must be a supervisor for these workers. That person earns even more. Let’s say $8.00.
If we give the first person a raise, to $9.00, what about the person who worked there awhile? Does he/she still make $7.50? Of course not, but don’t they still deserve more than the minimum? That person is going to have to get a raise, too. How about $9.50? That’s only fair. Then there is the supervisor. Let’s give him $10.00 per hour. Of course, if there is anyone above the supervisor who is making less than $10.00 per hour now, they will need raises, too.
If the minimum wage goes up, EVERYBODY gets a raise! Wonderful!
Or is it? Let’s take a look at your favorite fast-food emporium. That’s probably a good place to find people making the kind of wages we’re talking about.
When you buy your cheeseburger, you are paying for the wages of everybody who works there … and the people who baked the buns, the people who slaughtered the cattle, the people who made the patties and the paper products, the people who milked the cows and made the cheese, the people who harvested the lettuce, and the people who delivered all those things to the restaurant.
And ALL of those people got a raise!
The price of your cheeseburger just went up so much that you might want to reconsider getting fries with that! But you can afford it, because you got a raise, too, didn’t you?
Well, you pay taxes, don’t you? When you get a raise, part of it goes to the government. The more you make, the more you pay in taxes. In fact, for every dollar you earn, you’ll take home about 75 cents to 80 cents, if you’re lucky. But the price of EVERYTHING is going up to cover the FULL cost of everybody’s raises. (Not just your raise, but the actual cost of that raise. For every dollar your employer gives you he must contribute to your Social Security, Medicare and Unemployment Insurance. $1.00 of wages costs the employer about $1.12). Now a dollar won’t buy as much as it used to – and 80 cents will buy even less!
After the government takes its raise out of our paychecks, we might find that we can’t afford as much as we used to. And when there is less demand for products and services, businesses need fewer employees. So some people will lose their jobs, while others will get a raise that won’t be enough to cover the higher cost of everything!
And here’s the worst part. Guess who will lose their jobs first? The people with the least skills – the minimum wage earners – the people you were trying to help!
Even if they keep their jobs, the unskilled workers are still on the bottom of the heap, making MINIMUM WAGE, and that will never be enough because everything costs more!
Did you help them? Did you help anyone? In fact, you hurt most everybody – especially retired people who are on fixed incomes. Because they are out of the workforce, minimum wage laws won’t affect them, so they won’t get a raise. Yet, everything they need to buy went up in price.
The Minimum Wage earner thinks he got a raise, so he doesn’t see the need to improve his skill level, which is the only way he will ever improve his earning potential.
Did anyone benefit from this? To find out, follow the money.
The more you earn, the more you pay in taxes.
Remember this the next time your nice elected officials tell you they want to help you by raising the Minimum Wage. Before we had this little chat, you probably would have voted for the candidate who seemed to “care about the working poor”. Politicians rely on a voting populace that doesn’t think too much.