I have seen a few recent reports about how many minimum wage workers are also collecting government assistance. This has generally been offered as an argument for raising the minimum wage. IMO this ignores a few significant factors.
In a free market and strong economy for labor, workers get paid for the value they create, and supply/demand for workers. If they are not happy with their pay they are free to change employers to one who values their effort higher. Traditionally minimum wage jobs were held by teen agers just entering the work force as a way to get their feet in the door and gain some work experience. I worked for minimum wage in my earliest jobs 50 odd years ago. As I recall $1.25 an Hr and I was happy to get it. But I became worth more and was paid more than minimum wage in my future jobs.
What we have now, is a brutal economy for unskilled workers. Automation has made even low value jobs worth replacing with machines so the remaining jobs are low pay for low value creation with lots of competition. Unfortunately many adults find themselves settling for minimum wage jobs like in the fast food industry, and I applaud these workers for their work ethic and effort. They could probably get the same money, sitting at home from the government assistance teat. IMO the way to help them is NOT to raise the minimum wage.
Allow me to predict what would likely happen to the fast food industry if the minimum wage gets raised significantly. Instead of counter workers manning the cash register and handing us our big Macs, we'll see self service fast food outlets that accept payment electronically, and you get your food from automat like window compartments, or even automated delivery by pneumatic tube. Instead of a half dozen minimum wage workers there will be 2 or 3 in the back and many less of these low paying jobs. You can't get blood from a stone, and you can't pay workers more than their work effort creates. The math just doesn't work for large corporations or small.
Raising the minimum wage is exactly like a tax on such entry level employment, and will leave us with less entry level positions. This will help the lucky few who keep their crappy jobs, but hurt everybody else. We need to look at entry level jobs as exactly what it is, a way for teens to get experience and enter the system, not destination jobs for adults. This is made even worse by an unintended consequence of ACA where less than 30 hour per week workers are exempt from fines.
The real solution is to remove the sea anchors from the private economy to allow for healthy job growth. We have some positive trends with low cost energy especially relative to europe (and CA) with their heavily subsidized renewable electricity. I see more manufacturing jobs returning to America thanks to this relatively cheap electricity but the regulators still have their hands gripping the golden goose by the neck and squeezing for all they are worth. (Hon Hai the big Chinese contract manufacturer is looking at building a TV assembly plant in AZ).
Just leaving the private sector alone could cause a huge increase in employment. Tax reform especially if it liberated offshore earnings could cause a huge wave of domestic investment. This stuff is relatively easy to do, if we can overcome entrenched partisan ideology.
JR
PS; The arm waving in DC over the ACA is getting more amusing.. The website is mostly a straw man and only iconic of the larger fail. The website will get fixed at some point but it is not the actual problem. The elephant in the room has always been how to pay for this unrealistic vision for health care. A speech today is trying to deflect this onto the states and insurance companies, but this will IMO continue it's slide toward the ditch as the rubber meets the road next year. Maybe we will finally have an adult discussion about how to actually reform the healthcare system. The 2014 midterm elections are already looming large to legislators due for re-election "and" linked to ACA.
Interesting times. I am not gloating, I have always been for constructive reform. Still waiting.
In a free market and strong economy for labor, workers get paid for the value they create, and supply/demand for workers. If they are not happy with their pay they are free to change employers to one who values their effort higher. Traditionally minimum wage jobs were held by teen agers just entering the work force as a way to get their feet in the door and gain some work experience. I worked for minimum wage in my earliest jobs 50 odd years ago. As I recall $1.25 an Hr and I was happy to get it. But I became worth more and was paid more than minimum wage in my future jobs.
What we have now, is a brutal economy for unskilled workers. Automation has made even low value jobs worth replacing with machines so the remaining jobs are low pay for low value creation with lots of competition. Unfortunately many adults find themselves settling for minimum wage jobs like in the fast food industry, and I applaud these workers for their work ethic and effort. They could probably get the same money, sitting at home from the government assistance teat. IMO the way to help them is NOT to raise the minimum wage.
Allow me to predict what would likely happen to the fast food industry if the minimum wage gets raised significantly. Instead of counter workers manning the cash register and handing us our big Macs, we'll see self service fast food outlets that accept payment electronically, and you get your food from automat like window compartments, or even automated delivery by pneumatic tube. Instead of a half dozen minimum wage workers there will be 2 or 3 in the back and many less of these low paying jobs. You can't get blood from a stone, and you can't pay workers more than their work effort creates. The math just doesn't work for large corporations or small.
Raising the minimum wage is exactly like a tax on such entry level employment, and will leave us with less entry level positions. This will help the lucky few who keep their crappy jobs, but hurt everybody else. We need to look at entry level jobs as exactly what it is, a way for teens to get experience and enter the system, not destination jobs for adults. This is made even worse by an unintended consequence of ACA where less than 30 hour per week workers are exempt from fines.
The real solution is to remove the sea anchors from the private economy to allow for healthy job growth. We have some positive trends with low cost energy especially relative to europe (and CA) with their heavily subsidized renewable electricity. I see more manufacturing jobs returning to America thanks to this relatively cheap electricity but the regulators still have their hands gripping the golden goose by the neck and squeezing for all they are worth. (Hon Hai the big Chinese contract manufacturer is looking at building a TV assembly plant in AZ).
Just leaving the private sector alone could cause a huge increase in employment. Tax reform especially if it liberated offshore earnings could cause a huge wave of domestic investment. This stuff is relatively easy to do, if we can overcome entrenched partisan ideology.
JR
PS; The arm waving in DC over the ACA is getting more amusing.. The website is mostly a straw man and only iconic of the larger fail. The website will get fixed at some point but it is not the actual problem. The elephant in the room has always been how to pay for this unrealistic vision for health care. A speech today is trying to deflect this onto the states and insurance companies, but this will IMO continue it's slide toward the ditch as the rubber meets the road next year. Maybe we will finally have an adult discussion about how to actually reform the healthcare system. The 2014 midterm elections are already looming large to legislators due for re-election "and" linked to ACA.
Interesting times. I am not gloating, I have always been for constructive reform. Still waiting.
