While one side argues minimum wage is below poverty and need to be higher.Arguably true.The other side say if you raise it to much you will choke out new business.Also true. Minimum wage should be set AT a percentage of the production of a bussiness. When we are debating what that % should be then we are having a real debate. Until then its all talk about nothing...
It is a percentage. Typically a business will attempt to keep it's labor cost at or below 30% of gross revenues.
That includes wages and benefits. So for example. A full time worker making $15 per hour will cost the business twice that when one figures in SS taxes, payroll taxes, unemployment insurance, worker's comp insurance, medicare taxes, health insurance and state disability insurance. So it is not just the wage that is factored in to labor cost. It is all the other taxes, fees and insurance premiums as well. And do not forget the cost to administer payroll. That is an expense that must be covered as well.
So let's say a business grosses $400k for the year. It has 3 full time employees. Each worker is paid $15 per hour with the lead person or supervisor getting $20 per hour. Now for arguments sake and to simplify the math let's assume each worker works exactly 40 hours each week. So we have 2 workers at $31,200 per year and one at $41,600 per year.
That's About $106,000 in wages alone for the year. Now, the owners still has not paid himself. Remember that. So lets say the average cost of each worker is roughly ten more dollars per hour....Add thirty times 40 which is 1,200 times 52 weeks. That's over $60,000...Now payroll plus benefits is up to $160,000 for the fiscal year. That firm's labor cost rounds out to about 40%...Much too high. So the business owner who has not paid himself because the labor he employs is excellent but still a commodity has a decision to make. He can cut pay or cut one worker to part time status. That's assuming revenue for the upcoming year does not increase more than 10%.
BTW, if you want to question my estimates, feel free. I can give you one solid right from my insurance agent's mouth the cost of workers comp for an average of $35k per year. $7,000...That $35k just turned into $42k....
SO you see, when those who ***** and moan about profit and how much the owner makes and how the workers should share, it's coming from those who've never owned or operated a business and don't know shit.
All this crap about greedy business owners comes form the mouths of "they know not of what they speak" people.
They should shut it. Then ask their boss what they can do to help him increase revenues so that the business owner can afford to offer wage increases.
Yeah yeah yeah..Now I am going to see all kinds of commentary about huge corporations and CEO's and multi-million dollar compensation...Baloney. Most of those "salaries" are on paper. As we know many bard members are paid salaries but the bulk of the compensation is in company stock.