My 11 Reasons for Having a Minimum Wage


The Need for a Reasonable Minimum Wage

The minimum wage is an entry level pay rate; not a “Living Wage!” And it was never meant to be a “living wage!” Therefore the minimum wage must be a reasonable wage which encourages employers to hire the unskilled and new employee.

The reality is the minimum wage is an important part of the workforce pay process. The minimum wage sets a base rate and pay scales within organizations use this as a starting point. While not all businesses and organizations have employees working at minimum wage; you can be assured the minimum wage was a consideration as the pay scales were established and will be a consideration if the minimum wage is increased; adjustments up and down the pay scale are inevitable if the minimum wage is increased.

The minimum wage must be allowed to perform the work it was designed to do!

Reasons for Having a Minimum Wage

The minimum wage is an entry level wage to pay workers while they learn basic skills, for example:

  1. Showing up to work on time;
  2. Showing up consistently;
  3. Learning how to take and follow directions;
  4. Understanding organizational structure;
  5. Learning about businesses and specific industries;
  6. Finding out what you like and do not like;
  7. Seeing how you stack up compared to the competition (other workers) in work ethic, intelligence, work quality, efficiency, productivity, general intelligence, etc.;
  8. Determining whether you are willing to fit into the organizational structure;
  9. As a stepping stone to more productive, valuable and better paying work;
  10. Preparing for your future; and
  11. Giving business owners and managers a reason to take a chance and hire the unskilled worker.

What the “minimum wage” Is Not and Was Never Meant To Be: a “Living Wage”!

A long, long time ago; I worked for the minimum wage; it was a buck 35! For sure things were much cheaper during that time, but I never looked at a $1.35 or the minimum wage as some pinnacle of success. It’s a sad indictment of our legislatures when their solution to helping people stuck in low wages is to simply – I say simply, but it’s really not – increase the minimum wage. The solution of simply raising the minimum wage says “I don’t really care about these individuals, their families and especially their future; I just want to make them feel good for the moment.”

The objective should be an UPPROACH to help people develop the skills necessary to move them to better opportunities and better paying positions. Move them to a skill set valued by employers and one employers are willing to pay better wages to get!

The second objective is job creation. With high unemployment – forget the number which the Department of Labor publishes – and high underemployment the competition for workers is low in most industries. As a result there is no incentive for employers to pay higher wages. Wages naturally go up when the demand for employees increases.

Harkin-Miller Proposed Minimum Wage Legislation

I was reading a synopsis of the proposed increase promoted in the Harkin-Miller legislation. Reviewing their public biographies; it’s clear neither one has ever been involved in a business let alone run a business. It was law school and then within a couple years a position in a State of Federal legislature.

Their proposal is to raise the Federal minimum wage from the current $7.25 per hour to $10.10 per hour over three years in 95 cent increments. Their contention is this increase would have only a small ripple effect on people who are currently earning $8.20 per hour – the current $7.25 plus the .95 increase – or less. Their next contention is the minimum wage will be adjusted yearly for inflation so those earning minimum wage will never “fall behind” again.

There are problems with the proposal.

  1. The “ripple effect” will be much more pervasive because all employers use the minimum wage in setting their wage structure; and
  2. The calculations for inflation have been modified by Congress and others to remove the most inflationary items; therefore we are not seeing the Government acknowledge the inflation which is occurring.

As I said earlier businesses, and especially businesses with unions, use the minimum wage as a starting point for their wages. Whether the business has workers earning the minimum wage; there will be evaluations and adjustments. The “ripple effect” will affect everyone because it will cause inflation and inflation impacts everyone!

Conclusion

Let the minimum wage do what it is supposed to do in developing job skills and employees! The solution we need is not a higher minimum wage; it’s more jobs with an accompanying demand for more employees so employers will have to compete for employees and pay better wages!

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