“One man’s wage increase is another man’s price increase.” Harold Wilson
There is a growing movement for doubling the minimum wage to $15/hour. This is possible if we all have skin in the game, but that means we all pay more.
Established by FDR at .25 per hour, the minimum wage has been raised 16 times. This is yet another push for an increase. Some of the motivation for this includes the belief that government needs to control businesses, to manage corporate profits, including CEO and employee pay.
This could be called “Pre-Socialism.”
There is the belief that entry-level pay should be a “living wage,” which is undefined, of course. However, the $15/hour or $30,000/year figure is consistent with the estimated government welfare programs and food stamp benefits received by many, rendering it the closest thing to defining a “living wage” we have.
There is, of course, a small problem here. The largest number of employers are small business owners, not high paid CEOs, and many of them are barely getting by. Some not able to even pay themselves at times, not even earning a living wage themselves. They have absorbed all the costs they can.
And this is meant to be an “entry level wage,” not a “living wage” for a family. It is expected these employees will strive to increase their wages through education, productivity and experience.
Where government has mandated an increase in wages to $15/hour (e.g Washington state, California) some businesses have closed or reduced/eliminated jobs. In California, unemployment is rising and jobs are already disappearing well before hitting the $15/hour mark. Businesses are purchasing equipment to replace them, a growing trend.
Once $15/hour is mandated, higher wage employees will require a similar increase to maintain their pay differential. Therefore, employees currently making $9/hour could expect $18/hour when the minimum wage for entry level employees doubles.
This will ripple through the entire workforce.
Loss of government benefits and people gaming the system is one of the unexpected consequences. Seattle’s KIRO-TV reported a nonprofit corporation found higher paid workers “are trying to cut hours and earn less to avoid losing government assistance.” This includes food stamps and rent assistance.
So, it seems they are making what they desire working at minimum wage, but is this America?
Minimum wage on my first job was $1.25 per hour; gas was 30 cents, a bottle of coke 15 cents and a McDonalds burger 25 cents.
Now we have a minimum wage of $7.25 per hour, higher taxes, and prices have risen. Higher costs = Higher Prices.
In Fresno California, a burger business owner expressed concern whether his $9.99 burger platter would sell for the $15, required to cover the wage increase. He’s laid off workers to stay in business. and bought new equipment to mitigate their loss — a future trend.
Finally, two of the biggest beneficiaries of higher minimum wages are the government and unions.
For unions, this means higher wages for all members at all levels, and thus, higher dues from members and higher costs for us.
For government, this means more tax revenue as people move into higher brackets.
Yes, a government-mandated minimum-wage increase is doable as long as we, as customers, are willing and able to pay the higher prices businesses will require, which we have reluctant to do. If not, we as taxpayers, will pay assistance to those who will lose their jobs.