Thursday, May 19, 2016

Let's Get Real About the Minimum Wage

In California a new law is going into effect soon, the minimum wage increase to $15.00 an hour.

For the folks and students that have to work in restaurants, hotels and factories and are not self employed, this is a big blessing.  For the rest of the citizens, who will have to pay for their increased salaries, it is inflation and a pain.

Just the other day, we were in a fabulous restaurant and we noticed the price increase of $2.00 on the menu. For four of us for lunch was $60 which was basically 2 hamburgers, 1 french dip and 1 order of chicken wings.   Another restaurant for two was $30.00.  At this rate, we are going to start making lunch at home and coupons become more and more important.

Most people think $15.00 an hour is reasonable for a person to earn today.  However, for the employer that $15.00 in reality is more like $20.00 and hour when you calculate the employer's taxes and benefits that has to be paid per employee.  So for a mom and pop shop that has two employees they have to earn a minimum of $40 an hour just to keep the employees.

In the past these types of jobs were retained for students and others who were working as they were in college or waiting for a better job.  Today these jobs have become careers.  Naturally as a career employee you want to be able to earn more the longer you are with the company.

On the other hand, folks that are government employees, union employees and state employees have salaries that are way out of line with their actual work and duties.  And, many of these employees have so many good benefits due to their unions that whether they work hard, or work enough, they will still reap the benefits if they can last their 10, 20 or 30 years of employment.

So my recommendation -  get a government job.  Take the civil service exam.  At least when they raise the minimum wage for others, you won't be affected too much with the cost of living because they will probably raise your wage as well.

Mom and Pop stores will return to the old days when the family worked in the store and truly it becomes a mom and pop store again.  Others who cannot afford to stay open will close in droves.  More and more ordinary middle class citizens will go below the poverty line.  Then Mom, Dad, and all the children will have to work to make ends meet, just like the good old days when the family were farmers.

 As someone said to us the other day, let them continue to raise the minimum wage, and eventually, customer service will be not only outsourced to developing nations, but also handled by robots and ATM machines.

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