Critical Thinking Exercise for the Day: Wage Devaluation vs Minimum Wage Increase- While most of us feel the plight of the base pay worker and would like to see them be able to better support themselves (minimum wage was never meant to support a family), we must look at the repercussions to them and others, as well. Simple example: If a lead person gets $11/hr and a base worker $8/hr currently, then you raise the base workers pay to $10/hr , but not the lead person, you devalued the lead persons labor by a significant amount. This is common sense. Why would you want to be an (industrious) lead worker for really no extra compensation? If you also raise that lead persons labor by 20% ($13:20/hr) to compensate, then how far up the pay scale and position ladder in any given business must you go to where the devaluation is not a significant concern to the employees at those levels? This obviously would put enough of a burden on a company to where consumer prices would need to be raised, or a small business would have to fire employees/close their doors. If you fix prices through legislation, you will create eventual shortages of those goods/services as the demand outweighs the supply due to increased consumer purchasing power. Another side effect is base workers are receiving some sort of govt supplemental aide. If legislation is not simultaneously passed to amend current dispensation levels, that base worker would basically see their wage increase as a wash due to benefits being lowered, even a net loss of income in some states until it was rectified. Your take?
Posted on: Fri, 08 Aug 2014 22:58:14 +0000
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