THURSDAY, FEBRUARY 01, 2007
Minimum Wage Increase
The current minimum wage is $5.15. They want to increase it to $7.25. That is a 40% increase.
I wish I could vote myself a 40% increase in pay, which is to say, I wish I could vote myself into being 40% more valuable to my employer.
Also, while only 2% of all labors actually make minimum wage, when it is increased, it is going to scoop up everyone who makes up to 7.25.
How is this fair? I don't know. Consider this scenario:
Employee A starts working at Acme Hair Products 4 years ago at minimum wage, he is making 5.15.
He gets a promotion and a 10% raise every year, that is $.51, thus:
Year 1: $5.66
Year 2: $6.17
Year 3: $6.68
Year 4: $7.19
At the same moment that he reaches $7.19, two things happen. 1) Minimum wage goes up, 2) Employee B starts working at the same job that Employee A started at originally.
They both make $7.25, minimum wage.
Automatically, Employee A, with all his experience, is worth exactly the same as Employee B.
As employer, what do you do? Do you give Employee A a 40% increase so that his "value" to the company increases at the same rate at which it was decreased (it was automatically cut by 40%).
If so, he now makes $10.15.
Or, do you "reset" his base to 7.25 and give him four $.51 raises? That would give him only $9.29.
Now, 10.15 is only $.86 off from 9.29. But what about all the other employees in the company... they should also have their relative "value" increased at the same rate.
Take an employee who makes $50,000/year. That is $24.04/hour. Increase that by 40% and you get $33.65/hour which is $70,000/year, $20,000 increase.
That is a pretty penny for the employer just because the government isn't happy with highschool students and unskilled labors making so little that they cannot buy iPods.
Maybe I am just too critical because I have never made minimum wage, nor do I know anyone who has. Even Winn-Dixie (where I have worked) started their 15 year old baggers off at $.10 over minimum wage. And all they did was goof around out in the parking lot.
My first job, doing Internet technical support, paid $7.15. If this had happened while I worked there, I would have gotten moved up to $7.25, and I would have been paid the same as a bagger (not that there is anything wrong with bagging, I am just saying).
I have to throw in some Γρεεκ because it is φυν and I haven't had a chance to yet.
Posted by Chet at 10:08 PM
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