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Minimum Wage, Minimum Perspective

Posted by cann0nba11 on August 30, 2013

Labor Day, according to the official US Department of Labor Day definition, “is a creation of the labor movement and is dedicated to the social and economic achievements of American workers. It constitutes a yearly national tribute to the contributions workers have made to the strength, prosperity, and well-being of our country.”

There is no mention of wages or unions. Yet in the news this week we have SEIU organizing protests and events that support increasing, even doubling, the current minumum wage of $7.25.hour. Passionate progressives are demanding that minimum wage be increased because it is the humane thing to do. “How can anyone live on minimum wage?” they ask.

Well, there’s a reason it’s not called “Living Wage.” It is not meant to be a living wage.

Minimum wage was introduced in America in 1933 by President Roosevelt during the Great Depression. It was part of The New Deal and was abolished by the Supreme Court in 1935 for a variety of reasons. The law included acts and new government departments the quickly became bloated, bogged down with reams of legislation, and many unintended consequences occurred. Shocker. Sounds like the health care law to me, or pretty much any other major government legislation.

And as history has shown, “the main finding of economic theory and empirical research over the past 70 years is that minimum wage increases tend to reduce employment.” (source)

Compounding the minimum wage issue is the current national mindset around entitlements. Many of today’s youth simply want more for nothing. They feel owed a higher wage, and our president agrees with them, obviously a wise stance given his vast economic and business experience. Many people today are unwilling to take entry-level jobs because they feel that the work is beneath them. THIS is a problem.

My first job was washing dishes at an old folks home for $3.35 an hour. I got the job because a couple of my friends already worked there and they suggested me when an opening became available. It was part time work, and I did everything I could to earn more hours. How? By proving that I was a dependable person, that I could show up on time, that I could follow instructions, learn, and do the job I was paid to do. That is what a minimum job is supposed to do. It sets the foundation for your resume and future work potential.

After my first job, then took a different dish washing job for a higher wage at a nicer location. The nicer location charged higher prices and could pay a higher wage. I got the job because I had experience already at the old folks home, and I knew somebody that worked there. Later on while in college I grabbed a job in the fast food industry. Having had a couple of jobs under my belt made it easier for me to get hired.

Then I started temporary work, or “temping.” Temp agencies specialize in filling temporary jobs of all kinds, from basic manual labor to advanced computing skills. I had no office experience, but my track record of success at basic minimum wage jobs gave the agencies (I worked for more than one) confidence in me. The assignments were often boring, extremely simple or repetitive, but I took every one I could find. I stuffed envelopes, did light physical labor and basic clerical work. More importantly, I learned new skills and was introduced to corporate business etiquette: How to dress, how to listen, how to follow instructions and set myself up for success with new or unfamiliar tasks.

These menial jobs led to desk work. Answering phones, mail room duties, etc. Best part was that I started using computers and learning things like word processing, spreadsheets and presentations. This helped me work on my typing and writing skills.

Eventually I landed a “temp to perm” position, something akin to a job audition. The company hires you on an evaluation period and if you do well they have the option of hiring you. In my case one of them worked out and landed me my first job with a regular salary plus medical benefits — a first for me at age 24.

I could go on about the jobs I’ve had and how I moved up the ladder. I could go on about the jobs I lost, about being on unemployment, and even welfare for a while. Each time I lost a job I worked hard to find a better one. I’ve moved for new jobs, and I’ve taken pay cuts for new jobs. Having a job is not a right, it is a privilege.

Let me add this: There is great value in providing unemployment insurance, as long as it is a temporary solution, not a lifestyle. There is great value in providing a minimum wage, as long as it dictated by market conditions instead of government bureaucrats, and more importantly, as long as it is not expected to be a lifestyle.

At the end of the day, history has shown that forcing a raise in the minimum wage ends up decreasing the hours of the very workers the wage is intended to help. There are basic economic laws in effect here, and those that try to distract Americans with outlier stories like Wal-Mart vs. Cost-Co are doing the topic a disservice. The wildly vast majority of minimum wage jobs are provided by small and medium sized businesses: millions of jobs all over the country, performed by people of every type.

So while you are chomping down on your burger or hot dog this weekend, think about who should be determining how businesses run: business owners with years of experience feeding the economy, or government officials with years of experience stifling it.


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