Minimum Wages, Worker Contributions, and Skilled American Workers

[OKCTalker]

This discussion thread will almost certainly turn political, but I’ll start by posting it under “Current Events & Open Topic.”

The minimum wage (currently $7.25 per hour) is intended to be a compensation floor for entry-level employees who are able to make only small contributions to their employer after they have entered the work force. It’s a starting wage for those who are starting out in the world, and who typically perform menial tasks. While doing so, employees learn how employers and industries operate, and they demonstrate what value they offer to the organization. An observant employee quickly learns that he is expected to be on time, to do his job efficiently, to work well with others, to help solve problems, and how all of these things contribute to good customer satisfaction and a more successful employer. Most employees demonstrate an understanding of these skills, and they are promoted and given a raise. Those who do not understand this remain at their low levels of responsibility and compensation.

A 30-year-old person earning only minimum wage is not the fault of the employer, nor is it the government’s responsibility to give them a “raise” by increasing the federal minimum wage. It is the individual’s responsibility to prove to his employer that he is a valuable team player, and is worthy of greater responsibilities and compensation. If he cannot, then he continues at minimum wage and must accept hard truth that parity has been reached.

Employers want good employees, and they want to reward them through promotions and raises. They don’t want laggards who deserve less than the minimum wage because they don’t come to work on time, don’t do their assignments without constant supervision and retraining, don’t work well with others, cause problems instead of solve them, and are inattentive to customer needs. But that is commonly the type of person who is stuck in an entry level, minimum wage job. Forcing an employer to pay more without the guarantee of a better quality employee will cause them to employ fewer of them.

I believe that there are two solutions: 1. Parents need to teach their children how the employment world works, and how children can rise in the ranks by being more valuable to the employer. 2. We need a second educational track in this country for those wanting a vocational career. If you think that this is a “second class” career path, then take eight minutes to watch Mike Rowe (“Dirty Jobs”) testify before the U.S. Senate on the lack of modern American skilled workers: Mike Rowe Speaks To Commerce, Science, and Transportation Committee [05-11-11] - YouTube

[Plutonic Panda]

Simply put for me, I like this proposal to raise the minimum wage.

[Hawk405359]

You're treating bosses like they're benevolent dieties who gladly open their pocketbooks for their hardworking employees. Ideally, this makes sense, but the job market isn't an ideal situation. Especially in a market like this (but many times not even that is a requirement), many employers feel like they can away with treating their employees worse and worse, because there are fewer options for employees. This is even more true when a lot of the employers are multi-national corporations who have no real connection to their employees. It's a pie-in-the-sky notion that employers want to pay more to their good employees, many, if not most, don't. They will if they don't want their employees to leave, or if it's part of some negotiated deal in advance, but many, many employers have no qualms with doing anything they can to give their workers less. They want employees as cheaply as they can get them.

Do I think it's the government's responsibility to dictate employee wages? Not really, no, but the idea that employers are just waiting and hoping for the opportunity when they can dole out more money than they had been to people is just ridiculous. Businesses exist to make money, and that's hampered if they have to pay more to employees who are doing a good job.

Secondly, we have vocational educational opportunities in this country. In school, you can begin to learn a trade as early as high school, go to vocational school, do an apprenticeship, and so on. I don't think anything needs to be set up, it exists already. Students just don't take advantage of it.

[BBatesokc]

Yeah, I don't really agree with the original post.

From my perspective (which is the only foundation I have to go on), I often encounter minimum wage staff working positions that often have no room for 'moving up within the organization' or are in a position that management has already deemed 'a minimum wage job' and regardless of the employee's efforts, there will be no meaningful raises.

When I was out there hustling to get a job, or observing my son's job seeking, I found that most companies that promoted from within didn't start their employees at minimum wage to begin with. They paid better because they wanted better employees who would stick around long enough to become skilled and move up the ladder or continue to do their job without nearly as much turnover.

I worked for many different low wage companies before taking on a professional 'grown up' job. When I worked restaurants, they paid minimum wage and 'moving up' meant maybe $.50 more an hour - but also a lot more required hours. Or worse yet, salaried position with the worst hours ever. I also worked for WalMart and 7-11. Both paid decent to good (above minimum wage) for a starting wage and had plenty of room to grow within the organization and flexibility to pursue school, etc.

I'm personally not in favor of a mandatory minimum as high as is being proposed. Not that I don't think employee's deserve a more livable wage - but the reality is, employers often simply cut their full time employees to part time to reduce costs all around (wages, benefits, etc.).

Also, raising the minimum wage during a recession doesn't make sense to me. Do it when 'times are good' and it receives less push back.

City Bites recently did this to their employees, as did others.

[Just the facts]

OKCTalker - I used to think like you but here is the reality - the country you and I used to live in no longer exists. So I say screw it - give Obama exactly what he wants. If boosting the minimum wage results in the increasing automation of low skill jobs and higher unemployment at the entry level ranks then so be it, that group voted for Obama anyhow. Besides, Oklahoma could use a few less fast-food restaurants and low-end retail anyhow. And yes, many union contracts have their base wage tied to the minimum wage but that is a dying entity anyhow and this will just help it die a little quicker.

For my 2020 prediction to come true we still have a lot of stupid mistakes to make so this should help keep us on track.

I guess my only question now is - is $9 per hour enough or should Obama aim a little higher.

On a side note, I wonder how the $9/he figure was reached. Did he just pick a number out of the air that sounded good or is there an economic reason behind it?

[kelroy55]

JTF... Don't you live in Florida? Why do you say OK could use less fast food and retail places if you don't even live here?

[Snowman]

JTF... Don't you live in Florida? Why do you say OK could use less fast food and retail places if you don't even live here?

Possibly since it always gets mentioned in practically every heath report and many ratings for the city over at least the last fifteen years on the number of fast food restaurants per citizen, per mile or the utilization rate being on the extreme edge compared to the rest of American cities.

[OKCTalker]

Hawk - I agree that it's human nature to want to pay less for everything, whether it be employee wages, airline tickets, Big Macs or college tuition. But you get what you pay for, and when the price arbitrarily is raised, people will buy less of it (like cutting back on driving when gas prices increase, or hiring fewer employees when minimum wages are raised).

Brian - Yes, many companies don't offer promotion opportunities, but once an employee has mastered low-level skills, he is more employable at other companies, and at a higher wage. "Victory" isn't defined by an employee staying at the same company over his lifetime.

My first jobs were seasonal ones in high school, my parents had to drive me to work, I was paid minimum wage and I learned a lot. I continued working through college, both on-campus and off, so I had worked for lots of different organizations by the time I left college. I had an idea of what worked best for me, and how to get along.

It isn't that hard today to excel in the eyes of an employer: Get to work on time, do your job, ask your boss to show you how things work, do extra work when you can, and don't ask for favors (getting off early, taking days off, getting a pay advance). If they can promote you they will, but if not, "self-promote" by looking for better opportunities and seizing the right one when it comes along.

[PennyQuilts]

I'm about to the point where I am also ready to just step back and let the liberals/progressives have what they want. At the end of the day, the people are too stupid to understand they can't have everything they want and expect someone else to pay for it. The left has the power, they aren't afraid to use it and it is long past time that they were given the opportunity to learn from their mistakes and take responsibility for their stupid policy decisions. A lot of people are going to suffer, needlessly, but wanting people to grow a brain and sanity doesn't mean they will. They will just have to destroy our country before they figure out that we aren't indestructible. I look forward to the day when home grown Americans start to value our way of life and freedoms the way new immigrants fleeing ****holes do. It might be too late by that time but we are going in that direction, anyway. Let's get it over with. Some people can't reason and they won't learn by getting good advice - they have to learn by their mistakes.

[Just the facts]

I'm about to the point where I am also ready to just step back and let the liberals/progressives have what they want. At the end of the day, the people are too stupid to understand they can't have everything they want and expect someone else to pay for it. The left has the power, they aren't afraid to use it and it is long past time that they were given the opportunity to learn from their mistakes and take responsibility for their stupid policy decisions. A lot of people are going to suffer, needlessly, but wanting people to grow a brain and sanity doesn't mean they will. They will just have to destroy our country before they figure out that we aren't indestructible. I look forward to the day when home grown Americans start to value our way of life and freedoms the way new immigrants fleeing ****holes do. It might be too late by that time but we are going in that direction, anyway. Let's get it over with. Some people can't reason and they won't learn by getting good advice - they have to learn by their mistakes.

Welcome aboard Penny.

Stages of Society

1. From bondage to spiritual faith;
2. From spiritual faith to great courage;
3. From great courage to liberty;
4. From liberty to abundance;
5. From abundance to complacency;
6. From complacency to apathy;
7. From apathy to dependence;
8. From dependence back into bondage

The trick is getting through step 8 as fast as possible. And getting back to step 1 is going to be painful for a lot of people.

[andrew3077]

I don't want to turn this political, but isn't the point of this to bring minimum wage in line with inflation?

[Just the facts]

I don't want to turn this political, but isn't the point of this to bring minimum wage in line with inflation?

No.

1) Social justice
2) Buy votes

You can't close the gap on inflation by increasing the cost of the number 1 factor in inflation - wages. This is why when you see countries enter inflationary periods you never see wages keep up.

[venture]

I don't want to turn this political, but isn't the point of this to bring minimum wage in line with inflation?

If it were to realign with inflation, minimum wage would need to be around $10.50/hr. The Fed Reserve did a study not long ago that showed a $1 increase would be relatively well absorbed by the economy and actually grow things. I'm not sure if $9 would be too much.

I think one of the main concerns here are there are less of those next level positions available to move into. So working up to a higher paycheck isn't always a viable option. There are plenty of companies around as well that don't have any sort of annual raises for employees that do good work and stay with the company. However, that is the employer's choice and employees also make the same choice by staying. The main thing is that is there anything for that employee to move to if they threaten to quit.

Perhaps a more logical trade off would be an increase in fully funded higher education for people to expand their skills. Invest in education and get a better workforce in the end.

Just some random thoughts to consider versus just whining about this political party screwing over the other. That conversation is so tired and unproductive.

[onthestrip]

Closing the wage gap isnt a bad thing. In fact its a good thing for the economy. Growth is much harder when 1% holds most of the wealth.

Also, the working poor (min wage workers) require our tax dollars anyways in the form of government assistence. So we will pay either way. Giving them a little extra in a paycheck is probably better than giving away welfare or whatever else it might be.

[PennyQuilts]

Right up until the owner can't turn a profit and stops hiring/starts firing entry level help.

[Hawk405359]

Hawk - I agree that it's human nature to want to pay less for everything, whether it be employee wages, airline tickets, Big Macs or college tuition. But you get what you pay for, and when the price arbitrarily is raised, people will buy less of it (like cutting back on driving when gas prices increase, or hiring fewer employees when minimum wages are raised).

Depends on the good/service. Supply and demand have some elasticity, and if you're in a market for essential goods, people are willing to eat more costs. Employee wages are even more elastic, they'll take mediocre employees as long as they don't cost them too many customers, to avoid paying them a living wage. These also tend to be the jobs that minimum wage is starting pay.

The jobs that pay minimum wage now aren't the type of jobs that get people real skills. Stocking shelves, answering phones, checking tickets, being a fry cook, those are the types of jobs that you get minimum wage, those places don't care if you've got 50 years of being the best hash slinger in west or if you're looking for your first job your freshman year of high school, and those skills aren't suitable anywhere else. Most better jobs don't care if you worked at Walmart or Burger King, they care hat you have a degree/skillset you didn't get at your other job/have the recommendation of someone within the company. Nowadays, just about everyone trains on site unless it's a skilled trade or something medical. And they really don't care about your high school job.

Does a good work ethic help? Absolutely. Is it going to be enough to get ahead in this day and age? No, it isn't. Not in the way our economy has evolved.

It also doesn't help that we've conditioned employers with decades of increasingly lower taxes that have made it absolutely impossible for them to fathom taking any hit themselves. We opened the floodgates for that type of business that couldn't care less about the lower level employees, and then want to act appalled when they do mistreat them (or if you're part of that world, you act appalled when employees complain about how you mistreat them).

[SoonerDave]

Right up until the owner can't turn a profit and stops hiring/starts firing entry level help.

Exactly. That fact always seems to get missed, Penny. Somehow, the workers that will inevitably lose their jobs over this never get much public notice. We just chug along with this bizarre notion that small businesses just have infinite piles of money, and what a job might actually be worth to the employer in terms of the viability of his business and all the people it employs doesn't matter a bit.

[SoonerDave]

Depends on the good/service. Supply and demand have some elasticity, and if you're in a market for essential goods, people are willing to eat more costs. Employee wages are even more elastic, they'll take mediocre employees as long as they don't cost them too many customers, to avoid paying them a living wage. These also tend to be the jobs that minimum wage is starting pay.

But there is the essential fallacy in the argument - that it is implicitly the responsibility of the business owner to pay a living wage.

It isn't.

It's the employer's job to pay what that job is worth to the enterprise. And the fact that so many "entry level" jobs are undesirable, low paying, is the motivator that is supposed to be encouraging people to get better educations, get more skills, to make themselves more marketable.

Supply and demand curves teach us something about wages, too. Those curves tell us just as much about employees and wages as they do loaves of bread. Its a pretty simple rule of economics that price floors mandated above what the market would bear at equilibrium creates a surplus in supply - in work terms, that's unemployment. You put a minimum wage out there that's higher than the market would otherwise bear, and you have people out of work.

[Hawk405359]

I agree that the employers shouldn't be forced to pay more. I think those types of jobs are meant more for high schoolers looking for their first sucky job or for people looking to supplement their income, and as long as customers care more about spending ten cents less on those mechanical pencils, they'll always have a market.

I disagree with the all the other parts of the argument. I disagree with the notion that the type of employers who pay minimum wage really care about keeping good employees, that the type that hire for minimum wage will pay more for experience, that the job market at large really cares about your summer job regardless of how good you were at it, that all you have to do to get ahead is work hard and keep your nose clean, or that employers are so strapped for cash that they absolutely could not make any money if they paid their employees another red cent.

[onthestrip]

Right up until the owner can't turn a profit and stops hiring/starts firing entry level help.

Doesnt really happen with small increases.

[SoonerDave]

Doesnt really happen with small increases.

It doesn't?

I guess I'm not understanding how might anyone claim to be able to define "small" for the thousands of small businesses that are going to be bearing the brunt of this increase.

My math may be rusty, but a jump from $7.65 to $9.00 is 17.6%. I'm not sure too many small businesses consider a government-mandated 17% jump in any expense "small."

[Just the facts]

Don't fight it SoonerDave, you can't win. We have been waging this battle since 1938 and we have never won. We are 0-23 on the subject.

[OKCTalker]

...they'll take mediocre employees as long as they don't cost them too many customers, to avoid paying them a living wage. These also tend to be the jobs that minimum wage is starting pay.

And that's my point. Minimum wage is a base wage for a starting job, certainly not a wage that is designed to support a family. Which is another point - you don't get married and have children until you can financially support them, which won't happen when you're earning minimum wage.

[SoonerBoy18]

The cost of living is up, Gas prices are up, why cant minimum wage go up?

[OKCTalker]

(Cynically) Because the average capability of an entry level employee hasn't gone up.