OpEd

Story published: 09-10-2013 • Print ArticleE-mail Story to a Friend

Higher wage causes ripple effect


Years ago, a friend and I were talking, and I asked what she had been doing.

“Oh its great. We have been picketing Pizza Inn because they are not providing health care for their employees like they do in France and they are paying employees less than in France.”

Curious, I asked, “Well, how much is a pizza in France?”

She replied, “Twenty-five dollars.” End of discussion.

The latest push for a higher minimum wage was a demonstration for a $15 per hour minimum wage at various McDonalds.

Those McDonalds employees should hope this is unsuccessful.

Doubling the wages of workers means the price of their food will nearly double.

Where this occurs, that McDonalds store would be competing in price with more expensive restaurants that provide better amenities.

It would also be losing customers to other fast food businesses that didn’t raise wages and could still sell at a lower price.

The resulting lower income would lead to job losses at their McDonalds.

Doubling the wage would also allow the company to draw from a pool of more experienced workers.

Therefore, an entry level employee with little or no work experience would not be able to compete with a pool of applicants who have enough background and work experience to demand $15 per hour.

Businesses are in business to satisfy their customer base in order to make enough money to pay their employees, their bills, their insurance, their income and employment taxes, to advertise, to train their employees and educate further those who want to grow in their company, to contribute to the community, to make a profit which goes into building the business so they can offer more jobs, and to investors who helped create the business.

Economics isn’t a mystery. It costs a certain amount of money to provide a product or service.

The costs today are the same as they were decades ago, just more.

For example, when I was in high school, I worked for $1 per hour as a stock boy in a Kress store. Soft drinks were 29 cents, and Big Macs were 49 cents.

One hour of work bought about three drinks, or roughly two Big Macs, which is about the same as now.

It is true that the minimum wage has lifted the pay of the entry level worker in dollars.

But has the minimum wage buying power changed? Not much.

By raising the minimum wage, we are simply raising the cost of everything until our economy settles in where the minimum wage worker is back to making a wage of “two or three Big Macs” per hour once again.

The best way to advance from the minimum wage pay scale is to arrive to the job early, drug-free, rested, ready to work, with the cell phone/text off, with a positive attitude, working hard to learn about the job and company, and with a goal to help make the company successful.

By doing this, these employees establish themselves as a larger asset to the company than others, justifying a higher wage and/or job retention.

They also establish great work habits for their resume when applying for their next job.

Meanwhile, others with a different attitude will be wondering how these folks got a raise or new job, while they demonstrate for a higher minimum wage.