Posted by: coastcontact | May 31, 2015

Raising the Minimum Wage Rate

If we lived in a world where everyone has the right to pay whatever low rate they could manage then the least able would be paid a starvation salary. Wait, this is almost exactly the situation today. American society has established a minimum hourly pay rate that will not provide enough money to pay for housing, food, and other basic necessities.

The consequence is that those with limited ability and the resulting minimum pay must share housing and pool their low income to sustain their lives.

On the other end of the scale there are those businesses who need those low paid workers to sustain their low priced products. McDonald’s and it competitors are those businesses that come to mind. If the cost to make a burger goes up then the cost of those low priced burgers goes up. That could impact the very existence of many small enterprises.

We are faced with a conundrum!

I find myself sympathetic to both the poor and low pay employers.

Thus society must decide what is best for everyone in the long run. We see the consequence of not providing support for the poor when we look at nations like Bangladesh, India, and other southeastern Asian nations. The poor live in hovels and eat rice, beans, and anything else they can grow in a small garden. Is that the society we want in the United States?

Since we are a free enterprise society there are those who say “tough” and “it’s not my problem.”

The majority of our elected officials will make the decisions. As it stand today there are many cities and states who have decided it is in their best interest to continue raising the minimum wage. The current target seems to be $15.00 an hour. That is not a living wage but will help those who cannot obtain a higher level of education.

McDonald’s burgers at $5.00 won’t break us but just might help a little.

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Responses

  1. Very well said –

  2. Except for one thing. Neither McDonalds nor any of the other businesses that depend on inexpensive labor to operate are going to accept a decline in profits that would result from a raise in the minimum wage. Why? Because their shareholders won’t accept it. These companies will raise their prices to compensate.

    When every business that depends on low-wage labor raises their prices, everyone else who runs a business that is supplied by these low-wage labor dependent businesses must also raise their prices. Why? Because their shareholders won’t accept a decline in profits either.

    Consequently, the cost of living rises proportional to the rise in minimum wage. Where previously a minimum wage worker had to work 8 hours to earn enough money to buy a pair of shoes, now, with his princely windfall raise in the minimum wage he STILL has to work 8 hours to earn enough to buy a pair of shoes. The minimum wage worker is EXACTLY where he was before as to economic status.

    But wait! There’s more. How about the poor schmuck who was earning more than the new minimum wage rate? He didn’t get a raise despite the COL plus up, so he is WORSE off than he was before the minimum wage was raised.

    The bottom line is that the disparity in economic condition between workers at all levels and the truly wealthy simply increases.

    The guiding principle is this: If you try to legislate the impossible, you obtain the catastrophic.

    • While I understand and agree with your argument there is one flaw with your view. The people earning a minimum wage will in the short run feel and believe that society does care about their plight. The best example is Bill Clinton biting his lip and voices his concerns. We live in a society that wants to show empathy. Those poorest among us will remain poor but at least we tried to help them and we all feel better about that.

      • Feeling good doesn’t buy groceries. We would do better to teach our children to live within their means and to ensure that they understand that they have NO entitlements other than what they earn. Where in the hell did our society get the idea that every kid over the age of six has an inalienable right to carry a smart phone? For which Daddy pays the exhorbitant recurring fees even if Daddy is a minimum wage worker.

        I’ve seen the news reports of people demonstrating in the streets on the issue of increasing the minimum wage — and every person in the crowd is carrying a smart phone. If you can’t afford to feed your children or put a roof over their heads, divest yourself of the luxuries BEFORE you start complaining about corporate greed.

        Concern with people’s feelings without consideration of the consequences of artificially bolstering them is what leads to absurdities like giving every kid on the little league team the exact same trophy regardless of their performance.

        If you want to help a poor guy, give him a job and pay him a fair wage — but make sure he gives full measure for what you are paying him. Fair wage being the amount you are willing to pay and the amount the worker is willing to accept WITHOUT the government sticking their nose in to that which is none of their damned business.


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