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Is Minimum Wage A Good Idea
In my opinion minimum wage is not good most of the time. All people deserve to be treated well and valued as human beings. I am not heartless, but a realist. I have lived long enough to know life is not fair. Do you really want to get what you deserve? How about a speeding ticket every time you go over the speed limit? The law says you deserve a ticket every time you speed.
Minimum wages hurt the people it pretends to help. For instances the more restrictions you put on something the less you have of it.
Here is an example where people are placing restrictions on themselves and doing what they think is a good thing for everyone. Since I am one of them I am sure this is my motive.The California drought has greatly reduced water usage in the Tri-Valley and has led to fewer green lawns. We were asked to voluntarily reduce our water consumption 25%. While other parts of California were not conserving our. This area reachedthe goal. Two years ago you got a stern note from a neighbor or the city if your lawn was green. Some areas you got fined for having green lawns. The drought is expected to end this year. Many have been using recycled water for watering. Many are landscaping their dead lawns. They are opting for hardscape (rock/pavement) and drought resistant scrubs with little or no lawn. This landscaping option is reducing the number of people needed to mow lawns. Do people who mow lawns typically make minimum wage? If not minimum then close to it. They aren't victims of big business rather victims of a water shortage.*
How much steak do you eat when it is eleven dollars a pound? Most ranchers in California got rid of their cattle. Friends closed the family dairy after 67 years because there wasn't enough water to grow feed and people wouldn't pay eight dollars a gallon for milk so they could afford to buy feed. The shortage of water has made agricultural products scarce therefore more expensive. My point, when something is expensive fewer people will be able to have that product or job in this case.
*Resource: My personal neighborhood in which 10 houses have replaced all or part of their lawns with hardscape and 4homes have replaced lawn with artificial turf. This is an area of about 100 houses.
The President Announced Today
When the President of the United States announced he was going to raise the minimum wage many people shouted for joy and wait expectantly for their raises.
Today, I ask you to consider if minimum wage, whether it is federal or state, is a good idea. Why or why not
It is human nature to desire due reward for personal achievement and money to get what you want and need. This is the intended goal for increasing the minimum wage. But does it reach that goal? How much money is needed for a living wage? I once heard Al Gore spends thirty thousand dollars a month on electricity for his five homes. That is six thousand dollars more than someone making fifteen dollars an hour makes in a year.
The question to consider is this; does the minimum wage do what it is intended?
Take a moment and think about minimum wage. Who do you instantly think of when you think minimum wage. "Fast Food workers". Who are the fast food workers. Teenagers? When a teenager takes a job in a burger joint they are expected to get through school and get a real job? But as jobs are becoming harder to find more adults are taking these jobs in an effort to support their families. Where do these jobs lead? A friend had been working for a fast food chain, climbing the ladder from taking orders to general manager when he was laid off. He had worked for this company 14 years and was devastated. He was a star in his field.
Then the company decided to do something it had never done before. They allowed him to become a franchisee. The rest is history. His wife learned accounting and computers. Fifty stores later they are known for helping their employees reach goals they never thought they could. They grant scholarships from each store to local high school students every year and they do an amazing fundraiser for breast cancer research.
When you own an enterprise you put your heart and soul into that enterprise. Does the average fast food worker really want to invest anything into flipping burgers? Do you think it is good to encourage people to stay in nowhere jobs because they make a "living wage"?
Fast Food Employees
Today, December 5, 2013, all over the United States fast food workers are protesting. They are asking for a $15 per hour minimum wage. They are not asking for much are they? Interestingly Time Magazine had an article on a study saying 10 percent more than what you currently make will make you happier. The fast food employee protesting for higher minimum wage proves this study. The mind set "Employers need to pay benefits and a living wage" is pervasive in our society and Europe. Where is the reality in this mind set? What is a living wage? As you can see, if you read the Time Magazine article, it changes for everyone. A living wage in San Francisco is more than a living wage in Des Moines, Iowa. A national federal minimum wage of $10/hour will give people, in some states, a huge raise, and others won't get much at all. Will the number of jobs increase in states where employers suddenly have to pay employees more than their businesses can sustain?
How likely would you, a business owner, be to pay a 16 year old the minimum wage if it were $15/hour?
Is the goal of the fast food workers to work in fast food all their lives? What are the demographics of these workers. When MacDonald's and Burger King were upstart companies they attracted high school and college age employees. Today these companies attract elderly people, immigrants and college graduates who can't get jobs and motivated teens who are passing through. When did working in a fast food restaurant become the American dream job? In this link the five year MacDonald's employee says she doesn't make enough money to support her four children and has to depend on her children's father for a lot. Am I truly the only person in the world who believes fathers should provide for their children?
The topic of the minimum wage is emotionally charged. Many will come down on the side of the little worker and say the employers are the villains. There is always a grain of truth in every lie, according to Thomas Pain.
Lets take a look at the responsibilities of a business owner.
Through The Eyes Of A Businessperson
Lets walk through creating, owning and operating a business. I started a business years ago; it never went anyplace. I had excellent sales training and experience, my product was excellent, What went wrong?
Simply this, I spent more on the business than I made.
The bottom line, a business must make enough money to cover operating costs and feed the owner if it hopes to survive. The size of the business makes no difference. A large corporation and small business alike must make a profit or they cease to exist.
Here is a list of things must business people think about:
- How much space is needed to house the business?.
- How much will you have to spend on rent, lights, heating, cleaning,maintenance,garbage collection, water,landscaping maintenance?(if applicable)
- How many employees are needed to run your business? .
- How much will you need to spend training employees?
- How much will you have to spend to get and maintain good employees?
- What materials will you need, and who will be your suppliers ?
- What kind of wholesale rates can be negotiated with suppliers?
- How much will Insurance,(property, fire, unemployment insurance for employees, workers compensation, healthcare), cost?
- Taxes(property, payroll taxes, social security, self employment(14%) sales, etc... Taxes have to be paid whether the business makes a profit or not.
- What is the cost of a business licence?
- What is the budget for advertising and marketing?(My business failed because my advertising and marketing department was weak.)
- What are the accounting and payroll costs?
- What will production cost?
- How many hours will the lawyer ($300/hour) need to make sure all is legal an maneuver through contracts.
These are just a few of things business owners think about. Owning a business is full of responsibility and liabilities. If you don't love it and work diligently even the most lucrative business will fail. Here is an example of what I mean.
When I was young, living in the state capitol, there was a pizza parlor that made delicious whole wheat crust. The service was excellent, the location was such it attracted both professionals and college students. Every day the place was packed. The owner was frequently around to greet guests. When the owner passed away suddenly his son inherited the restaurant. He was not invested in the business the way his father had been. It was gone within a year. My point is an owner is willing to go the extra mile to make their business successful. The dishwasher probably won't care to do so.
I can still remember that tasty whole wheat crust with roast beef on top.
How likely will raising the minimum wage be to help those unemployed?
Raising The Minimum Wages
Government and Media have become the "Smartest Guys In The Room". Instead of looking at what is sustainable, government tells business they can or cannot do x,y and z. Government assumes all employees are treated like dirt and employers are scum. The parallels to the Enron scandal and our current administration are startling. We are told at every level the people running this country are the smartest guys in the room.
Raising the minimum wage targets people who can little afford to lose their jobs and young people trying to get work experience. There is no incentive for an employer to hire someone without work experience if they have to pay them the same as a trained employees?
Raise the minimum wage and entry level jobs are eliminated. The cost of operating a business has got to be factored in somewhere.
What are the unintended consequences of the minimum wage mandates?
- Limit employers ability to give employee bonus and pay raises.
- Limit employers ability to provide benefits.
- Limit the number of employees company can afford.
- Limit the growth of a company. If you cannot afford to hire more employees your growth potential is limited.
- Limit number of employees qualified for the job. No employer can afford to train an employee if they have to start him out at the same cost as a trained qualified employee.
- Limits tips. While apps for giving servers tips when you pay your bill the hot items places like Seattle Washington are eliminating tips and increasing the cost of services twenty percent to cover the new fifteen dollar an hour living wage.
- Limits your public assistance. You don't get as much because you will now make too much.
Eliminating or lowering the minimum wage would allow employers to reverse these consequences.
The Wealth of Nations
Explain to me why it is fair for a fast food worker to make more than some teachers with 4-5 years of advanced education or the same salary as a paramedic? If working in fast food,or sweeping a floor for $15/ hour is the new American Dream job where is the incentive to get an education? Fast food workers, work hard with enormous pressure to constantly perform. Hard workers are the backbone of our country. All people deserve to be respected and valued as human beings. Will raising the minimum wage ease the pressure these people feel? No, but it will make the smartest guys in the room feel better.
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