Many facets of minimum wage

LARRY ANDERSON
Larry Anderson

Minimum wage is nothing new in America. It has been around since 1938 and was implemented in several other countries long before the U. S. got around to it.

Most view the minimum wage as a necessary part of job security for young people breaking into the market and for those who are largely unskilled.

It also helps prevent the exploitation of immigrant laborers and unfair labor practices.

Politicians like the minimum wage debate which typically centers on employer vs. employee. It is embraced every election cycle because it gives the appearance of being on the side of those struggling economically.

Polls show most Americans favor an increase in minimum wage. Parents see it as an opportunity for kids preparing for life away from home to contribute. Also, successful people like to see others do well.

Personally, I am opposed to the practice of not paying workers enough to live independent of subsidies. Income and freedom are synonymous.

Indeed, I often thought I was worth more than I was paid, and there were years when I did not get a pay raise when I needed it.

However, when I did get a decent raise, I tended to work harder. That is an honest and universal behavior.

That said, I never worked any job at minimum wage for a variety of reasons. Essentially, employers know that to attract and keep good workers, they have to pay more than the smallest wage possible. Labor is the most competitive above the minimum wage marker, not at it.

An open and free market does a lot to build a wage standard.

For example, I know a young man who has worked in the restaurant industry since high school. He explained as a manager he could not pay minimum wage in his fast food restaurant because he could not attract workers. The only way he could get applicants was to pay more.

You can tell minimum wage helped leverage higher pay for workers even though minimum pay wasn’t in play directly.

So what’s the problem?

Politics!

You see, according to Pew Research, as of the close of 2013, only 4.3 percent of American workers earned the federal minimum wage. Half those were ages 16-24, which means many of those workers were still living at home. Sixty-four per cent were part-time. Most will move to better jobs and better pay within a short time.

Hardly a crisis.

In our current political climate, it has become easy to blame employers for a failing standard of living. The real culprits, however, are a still soft economy in which good paying production jobs have been eroded and in a cost of living that outpaces wages.

It’s an old story and a political one.

Much of the current demand for increasing minimum wage rests in political deeds: shutting out good jobs in industries, encouraging the outsourcing of American jobs to other countries as part of wealth redistribution, tax policies, health care changes, and on and on.

Not all the need for better pay via minimum wage increases is due to employers reluctance to raise wages, but that is the only argument you will hear.

The minimum wage now is $7.65 in Missouri, even though comparatively few beyond their teens receive that pay.

In Los Angeles, the minimum wage for businesses with 26 or more employees will go to $10.50 in July. By 2020 it will be $15.00 per hour.

You can expect state after state to follow Los Angeles’ lead. Compare the percentage of increase to your own.

As states conform, you can also expect the cost of virtually everything to rise within the service/retail sectors.

The expense of eating out, taking in a movie, buying groceries, or servicing your car will all go up. This will impact most those who earn the least. Just like now.

Minimum wage is a driver.

Employers will find employees making more than minimum wage will be dissatisfied with wages that no longer look good compared to the new standard.

All pay is driven up.

The result is many small businesses of marginal profitability will be forced to the brink by the double whammie of wages higher than employers can afford and by expanding health insurance costs.

Some will close. Some will downsize to stay in business. Most will raise prices on their goods and services. There may be fewer jobs, not more.

Oh! When a restaurant cheeseburger hits 10 bucks, I stop buying, simply because the cost of the product won‘t be worth it.

Not to me.

Then what?

Larry W. Anderson’s novel, I, Eugenius, is available on Amazon and at Maryville Daily Forum.