Monday, February 8, 2010
Final Thoughts...
I believe that minimum wage should exist. I do somewhat believe that people should be able to be compensated by thier work ethic. I do not really believe that people should be able to be decreased in pay. Money is not unlimited in amount. America should and needs to watch the minimum wage price eventhough I believe it should be increased. If it were increased, that means that someone somewhere is losing money. I find this unfair and do believe that minimum wage must be monitored carefully.
It's a free market........ I think.
Why not Let the employee earn what they are worth in a free market? Shouldn't a private business owner have the right to offer any wage they please? After all, employers can not force an employee to work for them so the employer should be able to negotiate any wage they can with the employee. If the employee feels they are worth more they are free to go to any employer they choose and attempt to negotiate a better wage.
Also, once you have been hired somewhere and you can prove your skills are valuable to employers you will have some leverage to negotiate a raise.
Think about this. You could be an excellent worker in an entry level position who deserves a raise, but the guy next to you is a slacker. Now lets say you both make minimum wage and your boss wants to reduce the slackers pay by one dollar and give that money to you, because you deserve more money than the slacker but the company can not afford to increase it's costs. Unfortunately, you the hard worker, will end up losing out and making less than you could because your company is paying more for than slacker than they are worth because they are required to by law.
I would not be surprised if employers are confronted with this situation all the time.
Also, once you have been hired somewhere and you can prove your skills are valuable to employers you will have some leverage to negotiate a raise.
Think about this. You could be an excellent worker in an entry level position who deserves a raise, but the guy next to you is a slacker. Now lets say you both make minimum wage and your boss wants to reduce the slackers pay by one dollar and give that money to you, because you deserve more money than the slacker but the company can not afford to increase it's costs. Unfortunately, you the hard worker, will end up losing out and making less than you could because your company is paying more for than slacker than they are worth because they are required to by law.
I would not be surprised if employers are confronted with this situation all the time.
Timing is everything.
When new minimum wage laws are passed the increases are often incremented over a few years. This could cause unforeseen problems when the raise actually happens if the economy is on a downturn or the current market situation is different than what Congress was expecting when they passed the law.
When these laws are first taking effect businesses may be at an unfair advantage in the global market because of the sudden cost increase. If prices for goods produced in the U.S. suddenly go up this could cause global demand for our products to shrink which in turn shrinks our exports and our economy.
When these laws are first taking effect businesses may be at an unfair advantage in the global market because of the sudden cost increase. If prices for goods produced in the U.S. suddenly go up this could cause global demand for our products to shrink which in turn shrinks our exports and our economy.
Sunday, February 7, 2010
So who should set the minimum wage?
Where in the Constitution does it give Congress the right, specifically or implied, to dictate the wages of an employee of a private business? I've looked and I can't find the section that covers that.
Shouldn't states have the right to set the the minimum wage for their state instead of Congress. I don't know how Congress can possibly pass a wage law that is fair to the entire country because the cost of living is not the same everywhere in the country.
If the point of minimum wage wage laws are to guarantee a livable wage this would be a much more fair and effective way to do it. States that have a higher cost of living would raise their minimums based on their cost of living and states with a lower cost of living would not need to raise minimum wages beyond what is necessary, based on the cost of living in their state.
Shouldn't states have the right to set the the minimum wage for their state instead of Congress. I don't know how Congress can possibly pass a wage law that is fair to the entire country because the cost of living is not the same everywhere in the country.
If the point of minimum wage wage laws are to guarantee a livable wage this would be a much more fair and effective way to do it. States that have a higher cost of living would raise their minimums based on their cost of living and states with a lower cost of living would not need to raise minimum wages beyond what is necessary, based on the cost of living in their state.
Saturday, February 6, 2010
The Problem With The Minimum
Josh Sheehan
Brian Lewis
Comp. 2 1022
Febuary 6, 2010
Minimum wage is a topic on a lot of people’s minds, mainly in the minds of workers who are stuck making minimum wage. With the current economic state as bad as it is, employers can only afford to pay employees minimum wage. No matter where someone goes to find a job, he or she is most likely looking at a minimum wage paying job. For teens that are still living at home with no real expenses, this $7.25 seems sufficient enough, but for people who are out of high school and on their own, this minimum wage seems way too low to live off of. College students are especially struggling with this insufficient wage. Most college students are no longer being supported financially by their parents. Therefore, they have to pay for their own daily expenses as well as the costs of going to school. This means that college students can only have a part time job. Part time jobs almost always start off with a salary of minimum wage. For a college student to be able to pay for classes, books, food and possibly rent off of minimum wage is unfathomable. I believe that minimum wage should be increased. Minimum wage is currently at $7.25 per hour which would be $290 a week with a full forty hour work week. This would be roughly around $1,160 or less per month. A person with this income working a full time job would be making about $13,920 per year. The poverty threshold varies from the amount of people living within the family; one person alone is drawn at $10,830, the rate increases by $3,740 per family member after that (Federal Register). This means that on minimum wage, working full time, a person will just pass the poverty line.
Minimum wage is not increasing directly with inflation, making minimum wage less and less each year. In 2009, inflation was negative for the first time in ten years, which means that inflation was extremely low. Other than 2009, the rates of inflation have gone up and up. With this going up each year and minimum wage not increasing, it gets harder and harder each year to support oneself on minimum wage. The inflation rate pretty much means that the value of the American dollar is worth less and less each year. This means that the prices of common items such as food go up each year. With the minimum wage not increasing and the inflation constantly increasing, minimum wage is, in essence, decreasing. Minimum wage should at least keep up with inflation so that it stays at a common equilibrium with the market.
A new concept in minimum wage could be in order as well. It is said that one of the leading causes of crime is poverty. Statistics show that the crime levels are worse in the poverty-stricken neighborhoods (Karmen). Research states that over half of the people living in these neighborhoods have never taken a college course. The problem, however, lies on the people who are forced to live in these neighborhoods even with a college degree of some kind. If minimum wage will not be increased, maybe congress should come up with a new minimum wage law that gives a second minimum wage, so to speak, to any person who has a degree of any kind. This could ensure anyone with a college-level education a better paying job which could lead to better living conditions.
Works Cited
Karmen, Andrew. “Poverty remains root cause.” USA Today 7 Jan. 2010. Academic Search
Premier. Web. 6 Feb. 2010.
“Labor Law Center.” Federal Minimum Wage Increase 14 Oct. 2009. Web. 8 Feb. 2010.
Federal Register. 74.57 (2009): 13261. 8 Feb. 2010.
Brian Lewis
Comp. 2 1022
Febuary 6, 2010
Minimum wage is a topic on a lot of people’s minds, mainly in the minds of workers who are stuck making minimum wage. With the current economic state as bad as it is, employers can only afford to pay employees minimum wage. No matter where someone goes to find a job, he or she is most likely looking at a minimum wage paying job. For teens that are still living at home with no real expenses, this $7.25 seems sufficient enough, but for people who are out of high school and on their own, this minimum wage seems way too low to live off of. College students are especially struggling with this insufficient wage. Most college students are no longer being supported financially by their parents. Therefore, they have to pay for their own daily expenses as well as the costs of going to school. This means that college students can only have a part time job. Part time jobs almost always start off with a salary of minimum wage. For a college student to be able to pay for classes, books, food and possibly rent off of minimum wage is unfathomable. I believe that minimum wage should be increased. Minimum wage is currently at $7.25 per hour which would be $290 a week with a full forty hour work week. This would be roughly around $1,160 or less per month. A person with this income working a full time job would be making about $13,920 per year. The poverty threshold varies from the amount of people living within the family; one person alone is drawn at $10,830, the rate increases by $3,740 per family member after that (Federal Register). This means that on minimum wage, working full time, a person will just pass the poverty line.
Minimum wage is not increasing directly with inflation, making minimum wage less and less each year. In 2009, inflation was negative for the first time in ten years, which means that inflation was extremely low. Other than 2009, the rates of inflation have gone up and up. With this going up each year and minimum wage not increasing, it gets harder and harder each year to support oneself on minimum wage. The inflation rate pretty much means that the value of the American dollar is worth less and less each year. This means that the prices of common items such as food go up each year. With the minimum wage not increasing and the inflation constantly increasing, minimum wage is, in essence, decreasing. Minimum wage should at least keep up with inflation so that it stays at a common equilibrium with the market.
A new concept in minimum wage could be in order as well. It is said that one of the leading causes of crime is poverty. Statistics show that the crime levels are worse in the poverty-stricken neighborhoods (Karmen). Research states that over half of the people living in these neighborhoods have never taken a college course. The problem, however, lies on the people who are forced to live in these neighborhoods even with a college degree of some kind. If minimum wage will not be increased, maybe congress should come up with a new minimum wage law that gives a second minimum wage, so to speak, to any person who has a degree of any kind. This could ensure anyone with a college-level education a better paying job which could lead to better living conditions.
Works Cited
Karmen, Andrew. “Poverty remains root cause.” USA Today 7 Jan. 2010. Academic Search
Premier. Web. 6 Feb. 2010.
“Labor Law Center.” Federal Minimum Wage Increase 14 Oct. 2009. Web. 8 Feb. 2010.
Federal Register. 74.57 (2009): 13261. 8 Feb. 2010.
Wednesday, February 3, 2010
Who really pays for the wage increase anyway?
Kyle Tregilgas
Composition 1022-14
Brian Lewis
One thing that really bothers me when I hear other people suggest that we need to increase the minimum wage is that most the people I have talked never stop to consider where that money comes from and who is actually paying for it.
The fact is when there is a mandatory wage increase across the board business's have a significant increase in their overhead costs and they are going pass that cost on one way or another. Most business's are not going to take the cost increase out of their profits, especially when their competitors will see the same cost increases.
Here is the the real problem. When a company has a increase in their fixed overhead costs they are going to make one of two choices, increase the the cost of the goods and services they sell or decrease employees and employee benefits.
So does raising the minimum wage actually hurt consumers and the economy more than it will help the employee who receives the pay increase? well, If you consider the the consequences of businesses passing on their increased costs by increasing the prices of goods and services they sell to consumers or cutting benefits and employees, the answer appears to be yes.
Consider this, if everyone who makes the same amount of money as you suddenly gets a pay increase of 5 percent do you actually have any increase in purchasing power? Unfortunately, the answer is no and here's why. There are not any additional goods and services being produced, only more money in the system chasing the same amount of goods. This of course increases demand which in turn increases prices. In this case the employee's pay increase is wiped out by inflation.
The other option businesses have is to decrease employees and benefits. This option has significant impacts as well.
If an employee's benefits are cut (like health insurance, 401k contributions and tuition reimbursement) this can add several thousand dollars in out of pocket expenses for the employee or prevent them from adequately saving for their retirement.
And if you think reducing the number of employee's or not hiring new ones is a better solution (as long as it's not your job), it's not. If companies don't hire the economy can't grow and if companies cut employee's the economy can actually shrink which leads to high unemployment rates and a stagnant economy. Very similar to what we are seeing right now.
It is worth noting that smaller businesses, those with an annual dollar volume of less than $500,000.00, are given some leniency when it comes to minimum wage. These smaller companies can pay as little as $5.25 per hour under the federal minimum wage law. Aslo, any company may pay a person under 20 years old $4.90 per hour for up to a 90 day training period.
Works Cites
Minnesota Department of Labor and Industry, "How federal minimum wage increase affects Minnesota Businesses." doli.state.mn.us. Minnesota Department of Labor and Industry, n.d. web. 4 February 2009.
Composition 1022-14
Brian Lewis
One thing that really bothers me when I hear other people suggest that we need to increase the minimum wage is that most the people I have talked never stop to consider where that money comes from and who is actually paying for it.
The fact is when there is a mandatory wage increase across the board business's have a significant increase in their overhead costs and they are going pass that cost on one way or another. Most business's are not going to take the cost increase out of their profits, especially when their competitors will see the same cost increases.
Here is the the real problem. When a company has a increase in their fixed overhead costs they are going to make one of two choices, increase the the cost of the goods and services they sell or decrease employees and employee benefits.
So does raising the minimum wage actually hurt consumers and the economy more than it will help the employee who receives the pay increase? well, If you consider the the consequences of businesses passing on their increased costs by increasing the prices of goods and services they sell to consumers or cutting benefits and employees, the answer appears to be yes.
Consider this, if everyone who makes the same amount of money as you suddenly gets a pay increase of 5 percent do you actually have any increase in purchasing power? Unfortunately, the answer is no and here's why. There are not any additional goods and services being produced, only more money in the system chasing the same amount of goods. This of course increases demand which in turn increases prices. In this case the employee's pay increase is wiped out by inflation.
The other option businesses have is to decrease employees and benefits. This option has significant impacts as well.
If an employee's benefits are cut (like health insurance, 401k contributions and tuition reimbursement) this can add several thousand dollars in out of pocket expenses for the employee or prevent them from adequately saving for their retirement.
And if you think reducing the number of employee's or not hiring new ones is a better solution (as long as it's not your job), it's not. If companies don't hire the economy can't grow and if companies cut employee's the economy can actually shrink which leads to high unemployment rates and a stagnant economy. Very similar to what we are seeing right now.
It is worth noting that smaller businesses, those with an annual dollar volume of less than $500,000.00, are given some leniency when it comes to minimum wage. These smaller companies can pay as little as $5.25 per hour under the federal minimum wage law. Aslo, any company may pay a person under 20 years old $4.90 per hour for up to a 90 day training period.
Works Cites
Minnesota Department of Labor and Industry, "How federal minimum wage increase affects Minnesota Businesses." doli.state.mn.us. Minnesota Department of Labor and Industry, n.d. web. 4 February 2009.
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