Minimum Wage

[Care4all]

What do we produce or manufacture here in the USA, where the employee is paid minimum wage?

Isn't this a service industry problem, more or less?

 

[Care4all]

or perhaps affecting very small businesses?

 

[alan1]

The whole false concept that a minimum wage (or living wage as some like to put it) can lift people out of poverty is pretty easy to destroy. One merely has to set an artificially high minimum wage to understand how it works.

Lets say that we decide the minimum wage should be $25.00 an hour. That comes out to about $50,000 a year for a full time employee. A decent middle class income. However, this is where things go south. Is the person taking your order at McDonalds worth $50k a year? what about the person that assembles your hamburger, is he worth that much? Of course not. But, for the sake of the argument, lets assume each of them still gets $25.00 an hour. Now, do you think McDonalds can afford a dollar menu paying those kinds of wages? At wages like that, the price of a plain hamburger would skyrocket to probably $4.00. And of course, the price of everything else would be increased also, because of the extensive labor costs. A $50k salary would become the new poverty level.

It's no different if you raise the minimum wage from $6.55 to $7.25, it just isn't as pronounced and obvious.

sure there is....there is a $18.45 difference an hour paid between the $6.55 and the 25.00 an hour and there is an hourly difference of 75 cents between 6.55 and 7.25.....???

one is about $1,500 more a year for a 40 hour a week employee....

the other is about $38,400 a year more for the same employee/hours.

Clearly ONE is manageable with productivity improvement, or with a slight increase in sales, or with tweaking ones overhead expenses, or by saving on freight etc., while the other is sort of a strawman and something no one is asking businesses to do MM???

care

Re-read my last sentence above, I put it in bold for you.
The federal minimum wage will rise to $7.25 on 07/24/2009, states that follow that will see businesses raise prices. San Fransisco CA has a higher minimum wage than Charlotte NC, and things cost a lot more in San Francisco than they do in Charlotte, the minimum wage is related to that.

 

[alan1]

What do we produce or manufacture here in the USA, where the employee is paid minimum wage?

Isn't this a service industry problem, more or less?

The only person I know that works for minimum wage is my brother. He makes 6 figures because his tips are great.

 

[pinqy]

Clearly ONE is manageable with productivity improvement, or with a slight increase in sales, or with tweaking ones overhead expenses, or by saving on freight etc., while the other is sort of a strawman and something no one is asking businesses to do MM???

care

Actually, it's not clear at all. $0.75/hour is $1,500/year per full time employee. IN your example where there's only one min wage employee, sure, that might be managed. But 10? That's not so easy. And the employees already making $7.25? Do you think they won't want a pay raise too, or would they be happy to be making min wage?

And it's very easy to say that saving that kind of money is "managable with productivity improvement or witha a slight increase in sales, or with tweaking ones overhead expenses, or by saving on freight etc., ", but if it's so easy to do, then why hasn't the business already done it in order to increase profits at the lower min wage? Is it perhaps because there are repurcussions to all the actions?

Small inreases in the min wage do not seem to have any great effect, but that doesn't mean there's none.

 

[alan1]

Clearly ONE is manageable with productivity improvement, or with a slight increase in sales, or with tweaking ones overhead expenses, or by saving on freight etc., while the other is sort of a strawman and something no one is asking businesses to do MM???

care

Actually, it's not clear at all. $0.75/hour is $1,500/year per full time employee. IN your example where there's only one min wage employee, sure, that might be managed. But 10? That's not so easy. And the employees already making $7.25? Do you think they won't want a pay raise too, or would they be happy to be making min wage?

And it's very easy to say that saving that kind of money is "managable with productivity improvement or witha a slight increase in sales, or with tweaking ones overhead expenses, or by saving on freight etc., ", but if it's so easy to do, then why hasn't the business already done it in order to increase profits at the lower min wage? Is it perhaps because there are repurcussions to all the actions?

Small inreases in the min wage do not seem to have any great effect, but that doesn't mean there's none.

Well put.