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Why Do We Have A Minimum Wage?

How will the economy be affected if we raise the minimum wage?

The President is recommending we raise the minimum wage.

 

Why do we have a minimum wage and how does it affect society?

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Greg February 19, 2013 at 06:30 AM
There are massive indirect costs with hiring an employee into many types of businesses. If the job requires training the new employee may work for hundreds of hours before actually producing enough to cover his wages. During the training period the company will incur costs for the trainer(s) and possible scrap product. The costs of training a $9/hr employee could cost in the area of $60/hr. This training could take weeks or months. It may take years for the employer to recuperate these expenses, all the while the employee expects raises. Or at any point the employee may just walk out the door. Most beginning employees think the grass is greener over there. If you are lucky, you can snipe the trainee and save some training expense. So in many cases the minimum wage job includes a free education, but that does not show up on the W2.
Brian Dey February 19, 2013 at 02:43 PM
If you are paying an employee minimum wage now, with FICA and Workers Comp., you are paying $8.67 p/hr, or $18,033..60 for a full time employee in my industry. If the minimum raise gets bumped up to $9.00 p/hr, with FICA and Workers Comp, you will pay $10.76 p/hr or $22,380.00 per full time employee. The total cost of minimum wage full time employee in my industry will be an additional $4,347.00. Somebody please tell me how this is good for the worker. To keep my costs unchanged, I would have to make them part time and cut 404 hours from them annually. OR How is that good for the consumer? I just got hit with a 20% increase in labor. I turn that over to my customers. But, but, but... They will be getting paid more so they can afford to buy more! REALLY? If the price of everything has to go up (in economic terms, they call this inflation), isn't the value of the consumers dollar going to be the same? OR The employee really isn't going to make more because hours will be cut or jobs will be eliminated, thus shrinking the consumer pool or remain stagnant with part time hours an now no benefits. I hope this little economics lesson gets through to the liberals because I have just outlined how most businesses will react to this huge expenditure you President wants to inflict on small business.
Urban Pioneer February 19, 2013 at 09:22 PM
Kathy doesn't that business owner now have $70.00 less money to shop and invest with every single week. Kind of kills your point. How about the Govt. gets the hell out and left the businesses owner pay the price per hour that suits his/her business, and the job being fulfilled.
Luke February 19, 2013 at 11:56 PM
Anyone??
Bottom Line February 25, 2013 at 04:02 PM
Informing citizens, and inviting critical thinking, when legislators suggest something as dynamic as raising the minimum wage improves the possibility that we can stop bad policy before we are invested. Reversing bad policy, once we are invested, is usually too challenging. Better to nip it in the bud ...

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