There has been much debate and talk over the years about what the minimum wage rate should be set at. Our state of Minnesota is currently involved in raising the minimum wage from the current rate of $6.15 an hour to around $10 by 2015. President Obama wants to raise federal rate from $7.25 to $9.00 an hour. It is widely believed by some that by raising the minimum wage to these rates, low income workers will be better off and more able to support their families. But are these rate increases really going to help them and cause less hardship for their families?
If your going to raise the rate to $9.00 per hour, why stop there? Why not raise it to around 15 dollars per hour? After all, if you have a family to support and are only 9 bucks per hour, that still is way too little for anyone to get by on. If you live in a larger city like I do and expect to get by on 9 bucks on hour, you are sadly delusional. The point that I’m trying to make is any minimum wage job falls well short of being able to sufficiently support a family, at least in the long run. I have to laugh at politicians who think this will all of sudden solve the problem of poverty. The real solution is getting people off their butt and getting trained in a skill so they will not have to worry about making ends meet. There are many jobs out there for people who actually have the drive and desire to make money.
When I think of someone making minimum wage, I think of some young high school or college kid trying to make a few bucks for some spending money. In fact, studies have shown that most minimum wage earners come from fairly affluent homes and families. It is not often that you find some family trying to get by from working at McDonalds. This whole debate should really center around how it will affect those young people who may be priced out of job if the minimum wage rates keep going up.
From a business perspective, the rate increase could have some bad consequences of employment especially for young people just staring out. Suppose you are the owner of some small business and you have several young low wage workers on your payroll. Now you are being forced to bump up their pay by a couple of bucks an hour. It doesn’t take a rocket scientist to figure out that this may affect how many people the business hires or how many people they keep. If I own a business and have to pay some guy in my shipping department 2 more dollars an hour, why should I continue to keep him or hire additional help? I can pass those duties onto someone else and save some money. Most of the tasks of low wage earners are far from important anyways. Most do not have the skills necessary that makes them non-replaceable.
The argument that raising the minimum wage will help the economy is rather shaky. Sure if you all of sudden make a few extra bucks an hour, you will go out and spend it on more items. But are companies going to hire more low wage workers when they are forced to pay them 10 bucks an hour for sweeping a floor? I highly doubt it and this could greatly affect employment. Entry level positions and low wage job pay rates should be dictated by the market place, not some government official telling the business how much they should pay a worker. What about the rest of the workers in the business or company? I would think if someone all of sudden got a 2 dollar an hour pay raise, the rest of the workers would feel they are also due for a raise. And let’s not forget how this will affect the prices of the product that the company or business produces. Since labor costs are usually the biggest cost of a company, this will cause the product to probably increase in price and affect consumers as well.
In summary, it would be great if everyone could get good paying jobs to make ends meet. But jacking up the minimum wage rate is really only a band-aid solution to a bigger problem of getting people good and well paying jobs in this country. Unfortunately, the people who really get screwed on these rate increases are the young people of our country who would like to get their first job ever. I wish politicians would wake up and look at how this could affect business and young people in general.