TAKING BACK AMERICA!

    Tuesday, January 04, 2005

    Minimum Wage, Maximum Headache

    Oregon now has one of the highest minimum wages in the country - $7.25/hr. Washington is higher at $7.35/hr. If you happen to do business in San Francisco then you already know you're paying a minimum wage of $8.50/hr. The national minimum wage is set at $5.15/hr. The minimum wage differs between the nation and some states and even, like California, between cities.

    Some advocates for a higher minimum wage have changed the name to livable wage. The problem as I see it is the notion that any job that pays minimum wage should not be a career goal. I see young people wanting some money (students) or older people (like the WalMart greeters) or agriculture workers in this category.

    I see minimum wage jobs as temporary until the worker can aspire to something better. No one is forced in this country to take any job. If you are in a minimum wage job and you want to be paid more consider:
    • Expand your education - get a degree or professional training
    • Showing an extra effort at your work might put you in a better position
    • Don't be a whiner - if you don't like the company or the people you work with take your skills somewhere where you think they will love you
    Let's say I was on the team of Target and I can open a new store in either Oregon or Idaho. If I go to Idaho I know my 300 minimum wage employees will be paid the national minimum. If I choose to put the store in Oregon, my employee wage expense will be $25,200 more each week more than Idaho. (The difference between minimum wages is $2.10, multiplied by 40 hour week per person, multiplied by 300 employees). In a 48 week work year that comes out to $1,209,600 more just to locate in Oregon. Where would you locate the store? Oregon has one of the nations highest unemployment rates right now - 7.1% - any connection?

    11 comments:

    Craig R. Harmon said...

    It seems to me that a company's ability to pay employees is, at any given time, a zero-sum thing: it can pay many employees a little each or it can pay fewer employees more each. What it cannot do, regardless of minimum wage laws, is pay an equal number of employees that it has been paying a small wage a larger wage. Raise the minimum wage and some will lose their job, effectively moving them from earning a small wage to earning no wage. The one thing that raising the minimum wage cannot accomplish is raising the company's ability to pay its employees the mandated higher wage.

    Norma said...

    I agree. The minimum wage should not be a living wage because it is entry level or low level. Some companies will not have any minimum wage positions; some will have many. When the economy is good and we have full employment, most employers pay more than minimum to get the best employees. I have a master's degree, but if I worked fast food, I should get minimum wage because I'm slow, get orders mixed up and can't work a cash register. I'd require a lot of training and supervision before I'd be worth anything to that employers.

    : JustaDog said...

    LOL, thanks for the comment. I'll take a Boca burger please!

    The Mad Tech said...

    Fantastic example of common sense economics, I have posted a link to it on my site. Keep up the great work.

    The Mad Tech

    : JustaDog said...

    Thanks Mad Tech. When I can figure out the javascript to make a decent tree effect I'll put your blog in my Good Site list!

    Nathan Frampton said...

    Found you because of Mad Tech's post. Great post. Keep it up.

    cassiopeia said...

    Came through Mad Tech's blog. Great post!

    BillyBudd said...

    Found you through that Other Blog* I like it and will be back.

    *Denotes inside joke

    Johnny Nobody said...

    Don't be ridiculous. The minimum wage has to rise from time to time to keep up with the rate of inflation just like everything else. Since the last time the minimum wage rose was 1994, an increase is long since due. Just like Social Security. Just like government employees. Just like top-level management that move to cities like New York and San Francisco.

    That standard of living is higher in some places so a person's wages get increased. It's common decency. And since the standard of living has risen since 1994 it only makes sense to update the wage. No one is saying people should be able to make a good life on minimum wage, but paying a person what they earn is common sense.

    Crystal said...

    Agree Agree Agree...Employers pay for skills and for jobs to be accomplished. Employers do not pay for people to make a living. No time to go on right now but nice job! Keep up your great work!

    Blahggraider said...

    A point that no one is mentioning is that many union contracts contain wage elevator clauses which kick in automatically when minimum wages are raised. This is a key reason unions always support State and Federal minimum wage legislation.