Conservative Corner: Minimum Wage Wars

Many of us have experienced the challenge of working in fast food restaurants as youngsters. The embarrassing uniforms, hair nets, sweating over a hot fryer, dealing with grouchy customers, and difficult shifts were part of a chapter some of us would sooner forget.  For others, however, it was the first exposure to the business world and a better understanding and respect for the value of a dollar. Partially because of the reasons listed, it is well known that most fast-food places have a high employee turn-over rate. Most employees of fast food establishments were/are young and know that with an education and plenty of hard work a they can find themselves in respectable, high-paying positions in the professional world. Unfortunately, in this economy not just young people have found the need to apply at a local burger joint for income.

            With the national and state unemployment rates at unacceptable levels, many adults have made the decision to go back to the work of their youth and get temporary jobs at low income jobs.  Now, however, many adults who have gone back to work at the local fast food joint or discount store to help support their family have been reminded one of the reasons why minimum wage jobs have such a high turn-out rate, the lack of a family-supporting wage.

            The average young person doesn’t have a big issue with the minimum wage since many still live a home; on the other hand today’s economy has produced a new kind of employee. These people have families of their own, and sometimes years of experience in the world of business or the streets. With the employment that these new employees fill come with new demands that most minimum wage jobs have never had to deal with before, the threat of high wages and benefits.

            As of January, 1 2014 the Oregon minimum wage is $9.10 an hour up from $8.95. The national minimum wage is $7.25 an hour. The new Oregon minimum wage may be fine for employees with no dependent families; however, it is not near enough for those who have other depend on them. Unfortunately, many small businesses cannot afford to pay outrageous minimum wage payrolls. You may also think corporations may how no trouble being able to pay an increased overhead but even an increase to $15 an hour can drastically cut into a corporate wallet.

            If 75% of Wal-Mart employees make $15 an hour that would cut an 18 billion a year hole in the company. That is 80% of their profits. If McDonalds did the same thing it would be a cut of 4.5billion, or about half of their profit, according to finance.yahoo.com/news.  I don’t know any small company or large corporation that could stay in business by doing that.

            Others may have different reasons for increasing minimum wage, like saying it’s a way to stimulate the economy, but, according to www.minimumwage.com, “research has found no link between a higher minimum wage and economic growth. In fact, a higher minimum wage reduces output in certain industries with a higher concentration of less-skilled employees.” Others yet have argued that increasing minimum wage will reduce poverty, when, in fact “Twenty-eight states raised their minimum wage between 2003 and 2007, in an attempt to reduce poverty rates. Yet research from economists at Cornell and American University found no associated reduction in poverty.”

            It is common sense that when it cost more to produce and sell a product, weather it is cheeseburgers or running shoes, the price of making and selling the product, will come out of someone’s pocket. I’m fairly certain it will not be the stock holders of a corporation. Raising the minimum wage to $15 an hour or more would, of course, cut into the profits of all companies, from the little mom and pop store on the corner to the large corporation in the warehouse store. The question is, are you willing to pay more for whatever it is your buying?

Yes, increasing minimum wage would most likely make many low income workers very happy, but what happens when a person who just got a raise to $15 or $20 an hour goes out to spend his or her pay check and realizes that it still doesn’t go that far because the prices have went up to compensate the owners, stockholders, and managers for the cost in the overhead of running a business.

In a world of unicorns and pixie dust we would see low income workers get drastic raises in pay and the companies would just feel sorry for their poor employees and happily take an unhealthy cut in their profits and just to make them happy and  because it may seem fair. Unfortunately, that is not how business works.

So, the next time you go into a Wal-Mart, Burger King, or another discount retailer, be thankful that the person behind the counter is not making $15 an hour or more or you might just see a larger bill than you wanted to.  Do you want overly expensive fries with that??

 

                                             dkhummel.blogspot.com, dkhummel.com

 

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About D.K. Hummel
I am a dis-placed Alaskan, Ham radio operator, Broadcaster/DJ, Seahawk fan, Alaska Aces fan, U.S. Army Vet, and a conservative; but not always in that order.

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