There has been a lot of talk about minimum wage laws coming out of the federal government lately. The proponents say that all companies must increase the pay they provide their minimum wage employees. There is no perspective given as to what these laws will do to those employees and the employers who must pay these new wages.
It is stated that everyone should get as close to what is referred to as a living wage as possible. The current minimum wage is standing at a little over seven dollars an hour. This was an arbitrary amount when it was established. Many states have larger amounts that are required to be paid to all starting employees, some almost as high as 10 dollars.
A new, mandatory, pay rate will influence the expenses of each business affected in a discriminatory way. The payroll expenses will go up and that means other things will have to go down. Arbitrary increases of this kind will make the almost four percent of employees affected, almost not worth the extra pay for a variety of reasons. Not the least of which is the fact that one size fits all programs rarely fit all or even most.
Legislators, working in Washington, DC, do not have payrolls for which they must be responsible. Many of them never have and do not understand how raising all employee expenses, for any company, impacts their ability to be flexible. All of this nanny state interference comes from the belief that all private companies have slush funds that they can dip into whenever new taxes are imposed.
Free markets allow new entrants into the work force to start at the bottom of the earning curve and grow in value as they learn and gain experience. They do not have the experience, just starting out and are not worth the new wages set by the Federal master minds. Employers, faced with this new rate will favor older, more experienced workers, all but eliminating opportunities for teenagers starting out.
Raising the starting pay for new employees to somewhere closer to their supervisors pay creates problems with employee morale. This person will have to be given a raise, which raises all of the associated expenses as well. All other personnel will have to be reviewed in order to ensure salary separation for the various duties, titles and positions. This further interferes with the market as future expansions, additional business locations and other growth activities will have to be put on hold.
One of the biggest problems with a new federal law dealing with the establishment of new minimum wages is that it does nothing for production. Minimum wage people begin that way and only stay at this level for a very short time. They either become more valuable and gain raises, naturally, or they do not produce and are let go. With a higher required pay to begin with, a raise will come much later and firings will be sooner.
The largest problem with these federal laws is what they do for people who do not even work at those wages. Most union contracts are based on a factor of the minimum wage in the area. By raising the wage to an unsupportable level, union contracts, already extremely confining to many companies, will be even more so as they use the new rates to demand more pay for their members.
It is stated that everyone should get as close to what is referred to as a living wage as possible. The current minimum wage is standing at a little over seven dollars an hour. This was an arbitrary amount when it was established. Many states have larger amounts that are required to be paid to all starting employees, some almost as high as 10 dollars.
A new, mandatory, pay rate will influence the expenses of each business affected in a discriminatory way. The payroll expenses will go up and that means other things will have to go down. Arbitrary increases of this kind will make the almost four percent of employees affected, almost not worth the extra pay for a variety of reasons. Not the least of which is the fact that one size fits all programs rarely fit all or even most.
Legislators, working in Washington, DC, do not have payrolls for which they must be responsible. Many of them never have and do not understand how raising all employee expenses, for any company, impacts their ability to be flexible. All of this nanny state interference comes from the belief that all private companies have slush funds that they can dip into whenever new taxes are imposed.
Free markets allow new entrants into the work force to start at the bottom of the earning curve and grow in value as they learn and gain experience. They do not have the experience, just starting out and are not worth the new wages set by the Federal master minds. Employers, faced with this new rate will favor older, more experienced workers, all but eliminating opportunities for teenagers starting out.
Raising the starting pay for new employees to somewhere closer to their supervisors pay creates problems with employee morale. This person will have to be given a raise, which raises all of the associated expenses as well. All other personnel will have to be reviewed in order to ensure salary separation for the various duties, titles and positions. This further interferes with the market as future expansions, additional business locations and other growth activities will have to be put on hold.
One of the biggest problems with a new federal law dealing with the establishment of new minimum wages is that it does nothing for production. Minimum wage people begin that way and only stay at this level for a very short time. They either become more valuable and gain raises, naturally, or they do not produce and are let go. With a higher required pay to begin with, a raise will come much later and firings will be sooner.
The largest problem with these federal laws is what they do for people who do not even work at those wages. Most union contracts are based on a factor of the minimum wage in the area. By raising the wage to an unsupportable level, union contracts, already extremely confining to many companies, will be even more so as they use the new rates to demand more pay for their members.
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