The Coveted
Commandment-Thou Shalt Build Wealth © 2013
by Wayne Dan Lewis,
Sr.
I say ‘somewhat’ because for what it is worth, we hardly
discuss the fact that wage increases of this nature, on a national level,
hardly translates into a rise from poverty.
Let’s be fair and straight with America
While the increase is a means of ensuring that American
workers are able to make some type of, dare I say, decent wage in order to
survive, it doesn’t do enough, and perhaps, and hear me clearly, it could never
do enough for America’s wage earners.
Why? For 2 reasons, as I hope you
will hear me out.
http://www.whitehouse.gov/state-of-the-union-2013
First of all, on the plus side, increasing the minimum wage
helps struggling families to “momentarily” improve the quality of their lives. For example, if a 4-member family with one (1)
wage earner is able to increase his or her income to $9.00 an hr, all things
being equal, that family would go from an annual earning of $15,080 to
$18,720.00. That is a 20% increase to
their family income, or $3640 a year more.
Or more specifically, $70.00 a week more. This is great, and because I have been on
that side of minimum wage, I always rejoiced whenever I received a raise, whether
it was minimum wage, merit raise, or a “I’m in a good mood” raise (never
happened by the way).
As I remember growing up, beginning work as a high school
kid, making above minimum wage because I was in a Union, I always remember
someone always saying that even as we received an increase in wages via the
union, it didn’t amount to much because the government was going to “take it
before you make it.” My union buddies
would always remind me, that because I was in high school, and that I was
single, that the government was going to clean me out on taxes. And they were right.
Additionally, someone else would remind me of the fact
because I was making more, even if 50 cents more an hour, that I would now be
spending more, inspired to spend more than I actually made. And because of that sidewalk, locker room
consultation, I found myself in the very boat that they described. But not all was grim. My parents always continued to emphasize that
I was to put money on the side. My
parents always wanted me to put money in a savings account. They always wanted me to buy savings
bonds. But would I listen? Nooooooo!
On the negative side, everyone is not going to necessarily
get a raise. I repeat, everyone is not
necessarily going to get a raise. While
the money will be on their payroll check as $9.00 an hour, many wage earners
may see their hours reduced, or perhaps, have their hours cut all
together. Why? For employers, with 10 to 50 employees for
example, full-time, that money has to come from somewhere. 10 employees with an increase from $150,800
to 187,200, would be an additional $30,000 from their profits, plus any
additional costs that comes with paying higher wages. With 50 employees, an employer’s payroll goes
from $754,000 to $936,000, an increase of $182,000. Where is an employer supposed to come up with
that money, when the government says they have to do it, and there is nothing
or anyone else stepping up to fill in the difference?
There is no question that employees are entitled to a raise,
but how are employers going to make up that increase in payroll? Could it be reasonably considered the cost of
doing business? Where is the money going
to come from? We know that employers
have this as a question, and often the answers aren’t choice ones.
- From the sky?
- Employee pay-back plan?
- Employee lay offs?
- Federal government who passed the increase in the minimum wage law?
- The consumers who buy and receive services?
- Out of the employer’s profits?
Several of these answers are ridiculous, no doubt. But then again, perhaps they all are. Let’s take a quick look. No, the raises aren’t going to fall out of
the sky; employees aren’t going to pay their employers back their hard-earned
wages. Layoffs may not always be a good
option if the business is there for the owner.
The government has its hand out already waiting for the taxes from the
increased wages, so forget them helping out.
Asking customers to pay for the raises can sometimes be a self-closing
move, even if the owner/employer goes up 2 or 3 cents here or there. And of course, asking the employer to cut
their profits? Well, that’s a tough pill
to swallow. Plus, I left off one other
possibility: Close down all
together. That one final option is not one
that is out of the question for some business owners. And, where would that leave employees if the
business closes down? We would, no
doubt, see unemployed workers. This of
course is in the context of how employers’ would look at the circumstances of
an increased payroll by way of increasing the minimum wage. No suggestions here, but these are the
circumstances a business owner have to consider when the President and the
Congress increase the minimum wage.
http://www.ehow.com/how_6763183_calculate-cost-doing-business.html
Conversely, this is an opportunity for those on minimum wage
to look at these circumstances, where employers weigh out their options in the
face of increasing not only minimum wage, but perhaps other employees who often
want a raise as well, whether to cut payroll by laying off employees, cutting
hours of existing staff, closing up all together, or just grinning and bearing
it.. For the minimum wage earner, this
could be a wake-up call to be on guard.
This is an opportunity to weigh your options for improved opportunities,
several of which you may be able to create.
Why? Because of several of the
reasons mentioned above, minimum wage earners should be putting together a plan
to prepare for their next move.
If an employer decides to cut payroll by cutting employee
hours, or to lay off employees, or worse yet, close down, today’s wage-earner
needs to be sure that they have something to fall back on. While another job would be great, it’s not
promised. Today’s minimum wage-earner
needs to prepare for their next move and here are some options:
1. Consider
going to school (trade, junior college or 4 year). There are some programs that provide
financial aid or assistance.
2. Consider
starting your own business (obtaining an equity line of credit, Small Business
Loan, partnering with family or associates)
3. Consider
getting a second job, but with the intent of building a savings plan that
itself has a long term benefit. A second
job that only provides a supplement to the 1st job, and no means of
increased savings put today’s wage earner more at a disadvantage than leveling
the playing field.
Increasing the minimum wage is a small step toward reducing
poverty. But today’s minimum-wage earner
needs to think outside the box. That
minimum wage position is constantly being evaluated by employers for either
elimination or reduction in value. Regardless
of how great an employee is, an employer has his or her own family and business
to be concerned about. And no doubt,
they are going to put a minimum-wage earner low on the lists of priorities when
it comes to maintaining their business.
However slight a wage increase maybe, it could very well be
for a short time, where today’s minimum wage-earner finds him or herself
looking for another position due to layoffs or business closings. The chances will be a challenge because
today’s employers will all be looking at positions on their roster that can be
minimized in order to maximize their profits.
It would be in today minimum wage earner’s best position to consider
other options that will help them prepare for tomorrow by finding ways to
improve the quality of their lives by increasing their marketability, or
striking out on their own.
In conclusion, I believe that increasing the minimum wage will
lift people out of poverty, temporarily, but without the benefit of preparing
them for the outcome of a wage increase, it is possible that more harm than good
can come from raising the minimum wage for those who may actually fall victim rather than benefit.
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