Sunday, August 4, 2013

Minimum wage

This past week there has been strikes and conversations about the proper minimum wage. In Chicago the fast food strikers were demanding 15 dollars an hour. In Washington they are talking about a living wage. Many speak about the impossibility of raising a family on 7.25 an hour.

So what does it all mean I have no problem with workers wanting more this is only natural. I think everyone has a right to better their lot in life. We all would like to see poverty eliminated but is a rise in minimum wage the way to do it.

First off let's throw out the idea of paying someone more because they have kids or a mortgage. Pay is based in general on 2 things, the value the job provides the company and the abilities and competence of the worker. Need is never an issue with pay the company that pays  based on need is not going to thrive. Need is only an issue for the employee and if you need more get educated learn a trade, make yourself stand out. Entry level jobs are just that jobs that almost anyone can do which makes it hard to justify higher wages.If you are competent you will rise within the company or move on to a better job elsewhere.

The idea that minimum wage should be a living wage or 15.dollars an hour is pure lunacy. What would happen in reality if these type of wages were implemented is highly inflationary. Not because a burger would have go up in price but because things are all tied together. If minimum wage is raised significantly what would happen to other wages. A person that is already making 15 dollars would then want 20 the twenty dollar an hour guy would want 25 and so on. Prices would rise in step with wages and 15 dollars an hour would still be rock bottom and ends would still be hard to meet.

In short life is always going to be hard for people who have limited education or skill sets. So stay in school learn as much as you can so you can move beyond what is meant to be a starter job.