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Minimum Wage – Friend or Foe and a Tale of Two Families.

Updated on April 24, 2014

Just learning to walk

Just starting out can be tough.
Just starting out can be tough. | Source

Just small town America

Just raising across the board will cost jobs and will inflate some prices.

Minimum wage is necessary. Minimum wage is for entry and low level positions with little training. You cannot take care of a family on Minimum wage (unless you can). Minimum wage in San Diego does not need to be the same as in Barstow. Minimum wage is government interference with free enterprise. With high unemployment, employers would take advantage without a minimum wage.

Minimum wage is not an easy topic to grapple with it is complex, as one can see.

So let us start out with a man who began at minimum wage of say 8$ per hour 4 years ago. His wife is disabled and cannot work so receives minimum benefits. She is capable of having and raising a child. Her disability is controlled with prescriptions, that would not allow her to work outside the home.

Our man has worked now for 5 years at this job and has risen in pay and benefits so he is now paying for his wife’s medicines. And now he makes 14$ an hour. They raise the minimum wage to 13.80 per hour and a kid still in high school living with parents comes gets a job left vacant by two employees quitting because they lost their benefits to cost cutting. That kid now makes the same as the man, just because it is mandated by law and of course with the increase in minimum wage jobs may be lost including the man’s. Especially since new hires are not getting any benefits at all because of costs.

And now the small community has more layoffs, and of course there is inflation to pay for the inflated wages.

That is a bad scenario, worse than just the economic impact, the fairness impact is probably harder on the man and his wife who is now pregnant because things were looking so good. If the choice comes up now, between losing benefits or getting laid off he will have to take the lay off and go on government assistance just to cover medical care. And the boy is still covered by his parents who make 100K$ year.

Let us move on to scenario two.

Looking toward the Horizon

Sunrise should bring promise!
Sunrise should bring promise! | Source

Life in the big city.

They story of the struggling couple

She got pregnant at 17 in high School. Her parents being whacko type Christian fundamentalists kick her out of the house. She moves in with her Senior 18 year old boyfriend now fianc’e, once she turns 18. His family is supportive but way too poor. He graduates barely while working at Burger King at 8$ minimum wage and all the money goes into the home. Both parents work minimum wage jobs also and there are two other small children in the house. The baby comes and is well, thank God. The girl turns 18 and they are married two weeks later and sign a rental agreement for a studio close enough to still share and swap babysitting and other such things with his family of origin. They struggle mightily but remain off welfare by working together to cut costs and she now works at the same Burger King and he has been there long enough to get benefits and the baby is off state aid for medical.

Now here is the cool part! All four family members are impacted and get and immediate raise to 13.80$ an hours. That is 740$ a week more than what they were getting. And the price of inflation does not touch them because they do not consume items that are going up in price.

Now onto some economic reality.

I do reckon some of us are luckier than others. If all heck hit the fan, Many could feed my family with my own hands.

Do you know anyone who lives on minimum wage?

Could you get by like people who earn minimum wage do?

See results

Who might an increase hurt the most.

Cost of inflating the wage by fiat.

Have no doubt that many small business cannot afford that kind of increase. Small restaurants, small gardening businesses, small recycling centers will fold in many cases. Have no doubt that many businesses will lay off employees and do whatever they can to cut labor costs because they cannot compete if they raise prices.

Just take the City of San Diego. It has huge government. Largest military town on the West Coast. And yet even with Qualcomm here, small businesses employ over 50% of the work force in San Diego. And many of those serve tourists and the military. The trickle up cost could easy reach double digit inflation and unemployment. These are just facts of life. You raise the wage and you raise the cost of production and service and therefor you raise prices.

Now let us look at the fact of the minimum wage.

Let us not loose sight in the glare, of the larger picture.

Sometimes the haze in the atmosphere even though natural blocks our proper perspective.
Sometimes the haze in the atmosphere even though natural blocks our proper perspective. | Source

The good and the bad.

Unless it is a two person household income without dependents it is not a living wage, get over it.

It was never intended to be enough to raise and support a family on. That was not and is not the purpose of the wage floor. It is to prevent abuse of workers. Someone with no training, no education and no experience is not intended to be above poverty level.

Did you know that over 50% of all minimum wage earners live in households with over 50K$ income a year. That means it is either a child dependent or a spouse of a major bread winner. Or two minimum wage earners with over 40 hours per month of overtime. (Actually that scenario works for minimum wage to be a living wage) So it shows us that if you work hard as a couple you can do just fine on minimum wage --- who came up with a 40 hour work week anyway? No education and no skills means you get paid for basically showing up and that is not hard to do 50 hours a week.

The notion that we are all equivalent workers is nonsense.

How hard do you work? I know a whole lot of folks with doctorates and 20 years of experience that work 70 hour weeks, and not just for the money but because that is what they do. Doctors and Lawyers anyone? Supervisors and managers, politicians and salesmen and women? I suppose it is interesting to note that those that people have the worst to say about work the hardest to get where they are and then out of a sense of responsibility, yet most folk knock them down when they can.

So there is good and bad with this notion of increasing minimum wage. But if you have reasonable employers the employees who will get laid off will be the youngest just starting out workers without others to care for at home, rather they are cared for at home. Next hopefully will be the retirees who need the extra income but can survive without it. Next hopefully it will be lousy workers regardless of need. Now that is horrible to say those things, but hey, better them than that young couple starting out or the man with the disabled wife and baby on the way.

If only life was just like these wonderful flowers. And it can be but not by somebody just saying it is paradise and everybody gets more.

It just does not work to order increase and increase. It has to come from somewhere and the only place it should come from is from hard work and effort or long work with less effort.
It just does not work to order increase and increase. It has to come from somewhere and the only place it should come from is from hard work and effort or long work with less effort. | Source

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    • billybuc profile image

      Bill Holland 3 years ago from Olympia, WA

      It's a tough call for sure, and I actually understand the plight of small business owners, having been one. The system needs to be fixed but I don't think minimum wage is the fix.

    • Ericdierker profile image
      Author

      Eric Dierker 3 years ago from Spring Valley, CA. U.S.A.

      Nope me either. But they have some incentive based ideas floating around. Like you only get it if you are in school or training to improve. Hopefully we will not have fiat or horrible compromise this time around.

    • Bob Zermop profile image

      Bob Zermop 3 years ago from California, USA

      Interesting thoughts here. But if the minimum wage is "not intended" to provide a living wage (I'm assuming that's what you mean by "in poverty")… Let me use a hypothetical. Wouldn't a worker who - for one reason or another - could not work for years and is in/is falling into poverty find it incredibly difficult to rise out of that downward spiral, even if they put in full effort? Their children certainly wouldn't be provided even the meager opportunities afforded by underfunded public ed if they need to work long (illegal) hours to keep the family afloat, put themselves in danger, and/or live in constant hunger. No American Dream, "anyone can get anywhere" for them, or at least for most of them.

      An interesting problem you raised is on unemployment - surely low paying jobs are better than no jobs at all. In the long term, though, it seems to me that a stably adjusted minimum wage would eventually result in more, properly compensated jobs for everyone. Of course, I'm not an economist, and don't really understand unemployment in general.

      Just some quick thoughts - a little busy this week, but will come back to this next week

    • Ericdierker profile image
      Author

      Eric Dierker 3 years ago from Spring Valley, CA. U.S.A.

      Bob you are right on the money. More questions than answers. Certainly minimum wage jobs are not designed in natural fact to give one the ability to live comfortably. (the extra hours are over time - perfectly legal if compensated for and that would normally be time and a half)

      I worked my way up in security. So I had to get 2,000 hours of actually guard work at minimum wage. I made it work working 60 hrs a week. But at the time my wife was working and making good dough -- so, no answers.

    • MsDora profile image

      Dora Isaac Weithers 3 years ago from The Caribbean

      You share some interesting insights on the issue of minimum wage. I guess life would be better if there was law that it could only be paid to people in a certain age bracket. Those teens and tweens may not have any complaints.

    • Ericdierker profile image
      Author

      Eric Dierker 3 years ago from Spring Valley, CA. U.S.A.

      Something along those lines might make sense. Or perhaps "dependency" and other entitlements might be another avenue to look at. Interesting stuff if you take the emotional and political stuff out of it.

    • Jodah profile image

      John Hansen 3 years ago from Queensland Australia

      Here are the minimum wage rates in Australia, Eric. I know our population is much lower and other factors need to be taken into account. But thought you may find it interesting.

      National minimum wage for adults

      Currently the full-time minimum wage is $16.37 per hour or $622.20 per week. This means that most employees in the national system shouldn't get less than this.

      Casuals covered by the national minimum wage get an extra 24% ($20.30 per hour).

      National minimum wages for apprentices, juniors & trainees

      There are special national minimum wages for trainees, apprentices and juniors who don’t have an award or agreement. From 1 July 2013 these are:

      Juniors:

      Age % of national minimum wage Minimum hourly rate

      Under 16 36.8% $6.03

      16 47.3% $7.74

      17 57.8% $9.46

      18 68.3% $11.18

      19 82.5% $13.51

      20 97.7% $16.00

      Apprentices

      Apprentices who aren’t covered by an award or agreement are entitled to the relevant rates in the Miscellaneous Award 2010.

      Year of apprenticeship % of the level 3 adult hourly rate ($19.07) Minimum hourly rate

      1 55% $10.49

      2 65% $12.39

      3 80% $15.25

      4 95% $18.11

    • Ericdierker profile image
      Author

      Eric Dierker 3 years ago from Spring Valley, CA. U.S.A.

      Thank you much John, I understand it is a model that we study here.

      Here is a funny thing. Every few years I get an itch and try something new. And I start out at minimum wage. We can live fine on it.

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