Minimum wage
Posted: Thu Mar 26, 2020 6:26 pm
I've long held the view that raising the minimum wage tends to lock out young and inexperienced workers, potentially employees, from jobs because they aren't productive enough to justify paying them the minimum wage. Today the US minimum wage is $7.25 per hour. In some higher cost locales that has been raised to $15/hour. This is inadequate to live on if you're not living at home with your parents providing shelter and sustenance. My argument has always been that minimum wage jobs are the avenue to gain experience, work ethic, respect for authority, industriousness and other virtues.
Further, when minimum wages go up jobs go down. Marginally productive or problem workers are abruptly let go. In many cases, small businesses like Mom and Pop restaurants, non-chain boutique retailers, and such, already operating on a shoe string, can no longer pay the freight and shutter their enterprises, throwing everyone associated out of work.
I've been reading various accounts about how the lower level employees in the US economy have stepped up during the Covid-19 crisis as literally the backbone of the US economy and our well-being. These are the store cashiers, Amazon (and pizza) delivery people, Uber drivers, fast-food restaurant employees and many more. They work hard for low pay but they are indispensable.
The hardest job I ever had was my first payroll position as a 16 year old new hire at McDonalds restaurant in St. Louis Park, Minnesota. In 1967 starting pay was $1/hour. The store manager was a hard-driving boss, demanding constant effort from every employee. That man, Gerry Bamberry, instilled a work ethic in me that lasted a lifetime. I learned every station in the shop, from making milk shakes, french fries, working the grill, and serving customers, taking in their cash. I was promoted to 'manager', wearing a red hat when working as opposed to the white hat everyone else wore. I was ultimately, after two years, entrusted with opening and closing the shop, recording receipts, inventorying and ordering supplies, training and evaluating junior employees. My pay rocketed to $2.75/hour. At 18 I went off to college but I needed a job to stay in school. I went to the local McDonalds in Norman, Oklahoma and applied. The manager of that store called Gerry Bamberry for a reference and I was immediately hired at the $2.75/hour I made in Oklahoma and got to wear the red hat again. I had to work there a few years but then left McDonalds for good. My association with McDonalds was more enriching than my entire educational experience I think, looking back. My friend at the St. Louis Park McDonalds was on the same track as me, but he stuck with McDonalds and now owns about a dozen franchise stores and is worth multiples of what I am.
Sorry for that digression, but there is a point I wanted to make. A lot of people work very hard performing critical tasks for little compensation. My epiphany, from my experience and the new realization that these little people are just as, if not more, important than the bureaucrat working a worthless government job, or the professional with a gender studies degree holding down a six figure position as a diversity officer of some hospital or bank.
My solution? Keep the entry minimum wage at today's low level, but increase the minimum wage after one year of employment, then again at two years, and again at three years. I would peg the minimum rates at $7.25 year one, $9.50 year two, and $12 year three, adjusted upward/indexed for cost of living. Employers would be free to pay more for valuable employees but should remain free to let go, without cause, those employees who don't measure up in the employer's opinion.
Any flaws in my argument?
By the way, the maids at my Mexican resort condo, working as hard as anybody cleaning condos, washing sheets, scrubbing floors, etc., make the equivalent of $12/day - 8 hours. To help them out I bought 100 Mexican silver Libertad coins that I paid about $15 each for. Every maid that cleans my condo gets one, doubling their pay for that day. I explain that each coin I give them is building their wealth and tell them to never sell it but save it for their children. The payoff is that I feel good about it, am helping them, and every time I return to Mexico (they clean the place before I come and after I leave) the place is spotless. I also know that they keep an eye out for me and have my back if anything comes up while I'm gone, sometimes as long as two months. Plus I get an inevitable bright smile whenever I come into contact with them.
Further, when minimum wages go up jobs go down. Marginally productive or problem workers are abruptly let go. In many cases, small businesses like Mom and Pop restaurants, non-chain boutique retailers, and such, already operating on a shoe string, can no longer pay the freight and shutter their enterprises, throwing everyone associated out of work.
I've been reading various accounts about how the lower level employees in the US economy have stepped up during the Covid-19 crisis as literally the backbone of the US economy and our well-being. These are the store cashiers, Amazon (and pizza) delivery people, Uber drivers, fast-food restaurant employees and many more. They work hard for low pay but they are indispensable.
The hardest job I ever had was my first payroll position as a 16 year old new hire at McDonalds restaurant in St. Louis Park, Minnesota. In 1967 starting pay was $1/hour. The store manager was a hard-driving boss, demanding constant effort from every employee. That man, Gerry Bamberry, instilled a work ethic in me that lasted a lifetime. I learned every station in the shop, from making milk shakes, french fries, working the grill, and serving customers, taking in their cash. I was promoted to 'manager', wearing a red hat when working as opposed to the white hat everyone else wore. I was ultimately, after two years, entrusted with opening and closing the shop, recording receipts, inventorying and ordering supplies, training and evaluating junior employees. My pay rocketed to $2.75/hour. At 18 I went off to college but I needed a job to stay in school. I went to the local McDonalds in Norman, Oklahoma and applied. The manager of that store called Gerry Bamberry for a reference and I was immediately hired at the $2.75/hour I made in Oklahoma and got to wear the red hat again. I had to work there a few years but then left McDonalds for good. My association with McDonalds was more enriching than my entire educational experience I think, looking back. My friend at the St. Louis Park McDonalds was on the same track as me, but he stuck with McDonalds and now owns about a dozen franchise stores and is worth multiples of what I am.
Sorry for that digression, but there is a point I wanted to make. A lot of people work very hard performing critical tasks for little compensation. My epiphany, from my experience and the new realization that these little people are just as, if not more, important than the bureaucrat working a worthless government job, or the professional with a gender studies degree holding down a six figure position as a diversity officer of some hospital or bank.
My solution? Keep the entry minimum wage at today's low level, but increase the minimum wage after one year of employment, then again at two years, and again at three years. I would peg the minimum rates at $7.25 year one, $9.50 year two, and $12 year three, adjusted upward/indexed for cost of living. Employers would be free to pay more for valuable employees but should remain free to let go, without cause, those employees who don't measure up in the employer's opinion.
Any flaws in my argument?
By the way, the maids at my Mexican resort condo, working as hard as anybody cleaning condos, washing sheets, scrubbing floors, etc., make the equivalent of $12/day - 8 hours. To help them out I bought 100 Mexican silver Libertad coins that I paid about $15 each for. Every maid that cleans my condo gets one, doubling their pay for that day. I explain that each coin I give them is building their wealth and tell them to never sell it but save it for their children. The payoff is that I feel good about it, am helping them, and every time I return to Mexico (they clean the place before I come and after I leave) the place is spotless. I also know that they keep an eye out for me and have my back if anything comes up while I'm gone, sometimes as long as two months. Plus I get an inevitable bright smile whenever I come into contact with them.