Minimum Rage

Now this is good timing: The hourly minimum wage in America increased this week to $7.25 from $6.55. That's an increase of seventy cents per hour ($1,456 annually) that employers must now cough up to pay to their hourly employees. This comes at a time of recession and continued job layoffs (over 9% nationally and increasing), not to mention the upcoming increase in taxes that most businesses will be paying to cover the gross spending by out-of-control Washington.

The minimum wage was originally implemented to protect workers from sweatshop tactics of overwork and underpay. But the sweatshops have long vanished from the American employment world, and we have those wonderful unions to protect today's worker bees. At least they're not driving up costs!

So many problems have derived from the minimum wage, one being the audacity of government to step into the private sector. Sure, there were abuses in the early days, but the point here is that there still were people willing to work for a lower wage. The government essentially stole away their right to work at an agreed upon price between employer and employee. The fact that they couldn't survive on that price is irrelevant here.

Because a minimum wage created a new wage floor in business operations, it necessitated elevating workers' pay in higher positions automatically. This reduced overall profits for business owners and provided workers with a false sense of self-worth. Here's an example:

At the Acme Press, an unskilled janitor who was willing to earn fifty cents an hour was paid considerably less than the semi-skilled typesetter who earned an hourly $1.00. But under the minimum wage, the janitor now must be paid $1.00. So, now the typesetter has to have a raise to reflect his worth as a semi-skilled worker to $2.00. This continues up the chain all the way up to the Editor. It's great that everyone has received a raise, but the raises were taken from company profits. When the wage expenses were too high, the company cwas faced with one of three options: 1)reduce production, 2)reduce the number of employees, or 3)close their doors. None of these are good choices, especially if expansion is your goal!

The problem is that employers today may not be able to afford the wage increases and, in these recessionary times, may find themselves firing workers or closing their doors, thereby expanding the unemployement rate, reducing the amount of tax dollars collected, and perhaps providing the blight of an empty building to a city or town near you. So the Usurpent will have at least one minimum wage increase in his cap while he remains president.

If Congress wanted to be responsible (I know, I know, you're laughing), they would have cancelled this latest increase until we're more stable. Instead, the White House is issuing a projected injection into the eocnomy of "billions" of new dollars spent by workers. Like other White House projections, this, too, is a farce. It seems to me that the workers who get to keep their jobs probably will use their new found wealth to pay off debt incurred during the past year. The others who aren't as fortunate will be applying for unemployment, thereby creating a zero sum situation and no boost to the economy will be realized.

It would be refreshing if government would simply stay out of our business.