Ecomonic Differences: Who Does the Minimum Wage Help?
January 23, 2012
Click here to read about the debate surrounding the minimum wage and share your comments.
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CJS-360 Diversity Issues 
I am interested in hearing everyone’s thoughts on this issue. Thanks in advance for your comments.
In terms of economical difference with regards to whom the minimum wage help, I will contend quite bluntly that the minimum wages help the upper class citizens that owns everything. The upper class citizens are people whom own businesses, and companies. Also, They are the people who want to pay as much as lower price per hourly labor for any person that work for them. Given that, the minimum wage benefits the upper class of the society and they are willing to pay as lower wages for worker as they can in other for them to maximized profit and minimized their loses.
I found some good points for both sides online:
When you force companies to pay a certain wage, you increase the likelihood that those companies will outsource jobs to foreign workers, where labor is much cheaper. Additionally, minimum wage could drive some small companies out of business.
For larger companies, lowering or abolishing the minimum wage would create lower prices and in turn increase profit for them.
On the other hand, if you get rid of the minimum wage, businesses will have more power to abuse those desperately seeking a job in the labor market. Currently, minimum wage forces businesses to share some of their profits with the people that help produce it. People need a certain amount of money to survive and there is only so much time in a day.
Redistribute the wealth or keep allowing Big business’s to profit?
Like the Criminal Justice System (to be fair and just), the intent of the minimum wage was/is good. In My Opinion (IMO). It probably came to being because people saw that CEO’s were making so much more money than how much they were getting paid per hour. Also, because people were having a difficult time to make an HONEST living off of the wage they were getting paid. Out of those concerns, and probably others, and for FAIRness, a minimum wage was ushered into being. However, from what I’ve seen, as soon as the minimum wage goes up so does everything else causing inflation; Businesses’ need to please share holders has to act so they must raise their prices to meet projected yearly revenue. It has gotten to the point that minimum wage only serves to drive up inflation thus defeating it’s TRUE intent which is to make things FAIR.
It is the difference between good intentions and good outcomes. Just because something feels right does not mean that it will work. The biggest issue with feeling-based policies is that they get a tremendous amount of support due to the fact that they maniacally target emotions. Therefore, these policies get implemented and the ripple effect takes over. E85 is a prime example of this. It feels good to think that we are using less fossil fuel and consequently not hurting our environment. But, E85 has drastic cons. To elaborate, it is subsidized by tax dollars, gives farmers an incentive to replace other crops with corn, uses a massive amount of water, raises the price of cattle, does not perform as well as gas, takes energy to produce it, and its seasonal. So why do we even contemplate ethanol as a substitute for gas? Because it feels good. Just like raising the minimum wage its all about caring and compassion. Therefore, it is almost impossible to debate these kinds of policies because the opposition is usually labeled instead of debated. Now, this is an extrapolation to a plethora of policies that have been implemented. It is very typical of a left of center government to start meddling with the free markets affairs. And, this type of meddling will inevitably hurt the economy of America. Our debt is around 17 trillion (its something like that). Even if minimum wage went up, the money would not be worth anything because everything would go up. If our economy could handle the jump to double the wage then sure go for it.
If there was any good advice to be given, it would be to let the free enterprise do what it was intended to do. Without a large government intervention.
What really boggles peoples’ minds is when there are bad intentions and good outcomes.
As a worker who is paid minimum wage, an increase in minimum wage would mean a great deal to me. I am a middle aged female who has a mortgage to pay and a family to support. An increase in minimum wage would mean an increase in my monthly income. This would mean less financial worries and greater access to the necessities that my family needs for daily living. On the other hand, I work for a small business owner and I fully understand that she is operating her business on a tight budget as well. An increase in minimum wage could possible be hurtful to her business. Having to pay an increased wage to her employees would mean that she would be limited to how many people she can hire and how many hours her current employees could work( a negative impact for those of us who already work there). This in turn could have a negative impact on service and product quality. I do agree that in some cases the minimum wage can benefit those of the higher class who own businesses, i.e. paying lower wages to increase profit. But, for those small business owners who are paying minimum wage because that is all they can afford an increase could be very detrimental. Although an increase in minimum wage would be extremely beneficial to those of us who really need the increase in our income. There are many pro’s and con’s to this issue, for individuals on both sides, and finding a fair and balanced solution will be quite a challenge.
I do agree with Mr. Vang and I also agree with part of the article. I understand small employers are going to be hurt because of a wage hike, but the article did not go into the corporations and their own mishandling. It stated that only 5% of workers get minimum wage but the vast amount of other people are getting just a spit above it. To live in this country (the way the media says you should and the way most of us emulate) a person has to work two jobs just to make ends meet. Even when I was a manager at Target I was paid $13 hr and had to clean up the messes of the upper level management all the time. The people that worked under me had even more to do and they were paid less. Target posted their earnings, thanking all the employees, that they made a record 52 bn (sales/revenue) that year. I looked at that number and thought about all the employees that made $7 hr and wondered what life would be like for them if they made even a dollar more an hour. A company thinks that it has to make more money each year or it is failing. I say a company who makes more each year and cuts benefits, stalls wage increases and shortens hours IS a failing company.
Minimum wage facilitates the opportunity for the people to be worked over by large companies.
When you force companies to pay a certain wage, you increase the chances that those companies will outsource jobs to foreign workers, where labor is much cheaper. Additionally, minimum wage could drive some small companies out of business.
For larger companies, lowering or abolishing the minimum wage would create lower prices and in turn increase profit for them.
On the other hand, if you get rid of the minimum wage, businesses will have more power to abuse those desperately seeking a job in the labor market. Currently, minimum wage forces businesses to share some of their profits with the people that help produce it. People need a certain amount of money to survive and there is only so much time in a day.
Melissa Martineau
“We” the people need to put more pressure on big businesses. We cannot let the government do the work for use as they should be serving the people already, which they don’t do a great job. Businesses make huge profits, as their employees are expendable/replaceable. It is just a continuous cycle they needs to be changed. Prices of good go up within weeks as wages go up only about once a year. I think profits should be capped. The less people make the less they spend. The profits should go back to the employees/benefits etc.
Profits are the best incentive. The rich stimulate the economy by providing us with labor, cheap goods, and philanthropy. Would you be in favor of capping the profits on say someone who finds the cure for cancer? If there is a cap on profits then the computer I am typing on would not be here. Artificially effecting the economy is bad news. Profits are why people do the things they do. Just because someone is flying on a private jet with gold seats does not mean they are greedy. In fact, it is quite the opposite. Someone had to design, build, and maintain the airplane. Someone provides storage for it and people need to fly it. Additionally, someone has to make the fuel for it. The rich are not like scrooge like where they hoard their money. They spend it and reinvest into new advancements. The economy is built by pinning our greed against each other. Inevitably, capitalism will suffice if subsidization, taxes, regulations, and government bailouts either cease or slow down. The unions who are asking for better wages have shut entire companies down. We should all be content in our work ethic, not in our pay.
I believe with an increase in minimum wage you will see an increase in outsourcing and or an inflation of the price of the good’s or services that is being provided. By increasing minimum wage you are removing any incentive to go to college, to create your own company, and to work hard. I believe your pay should be determined by your job, education, work experience, and how easily you are replaceable.
The minimum wage increase will help the low income earners, especially, the minorities. It is a good idea to increase minimum wage, but, we have to consider and weigh the cost and the benefits to the economy. The corporations and private companies must be wiling to accept any increase, if not, these people may look for cheap labor elsewhere, and which will adversely affect our struggling economy. Otherwise, minimum wage increase will help families and inject extra spending power to the economy. It will reduce the hardship faced by different low income earners. Prentice hall, in his book, Investigating Difference, says that ” 24.4% of African Americans were living below the poverty line, compared with 10,5% of whites”. Therefore, it will be an economic boost, for example, to this group of people. And finally, it will also help the economy with the extra cash to spend.
I am going to go at this debate from a different approach. I believe the minimum wage helps to secure the upper class against lower class mobility. Just as Investigating Difference explains “When societies are organized around private production and economic competition, the division of society into haves, have somes, and have-nots is an inevitable structural outcome” (p. 58). If you look at the middle class income growth in 2005, you will find a 15 % increase when compared to a 1% decline for the poorest 20% (Investigating Difference, 2009). The figures indicate that there was plenty of money being earned, but none of it was making its way to the lower social class. Minimum wage is a component used to construct social indifference. Combine this with other elements of social indifference you begin to see the barrier those at the lower end of the spectrum are faced with.
From a socioeconmical vantage point, low wage can not help anyone, excpet those who don’t have education but most people nowadays want to improve their educational background in order to get higher wages.
This is 2013, the cost of living is higher than ever ever before, the minimum wage doesn’t provide effective relief to anyone because the cost of the commodities are increasing as we speak. Prime example, look at the gas prices, food, rent, mortagage to name a few.
I think all of the previous comments make many valid points. I think that minimum wage should reflect the cost of living especially in certain areas. I moved from a smaller town in Wisconsin where for most, that $7.25 is going to be good enough. When I moved to the cities I found out how much more expensive my lifestyle is. I pay double the rent, and it costs more to do just about any activity. Thank God for financial aid! I at least have an end game in sight, going to school so I can get a career with a higher wage (so I can pay back student loans for the next 30 years!) There are people out there though that are barely making ends meet working their butts off for minimum wage, with no means of acquiring a better job. If we do not keep minimum wage at a reasonable level it is just going to mean more people are going to need government assistance in which we will be paying for eventually. I do understand it from a business aspect as well. Bigger businesses will outsource and some smaller businesses might have to higher less or unfortunately close; but we can’t leave minimum wage so low when the cost of living keeps rising! Nothing is cheap anymore.
Technology is reasonably cheap these days. I work at a mexican resturaunt for 8 bucks an hour to pay for school. If they doubled my wage I would be laid off for one reason; a machine can make tacos. This means that one person operates the machine and one person can take orders on a more advanced computer system. So two people lets say making 15 bucks an hour versus our 5 person shifts of pay ranging from 7.25 to 12 bucks an hour. Minimum of 36.25 per hour cost for 5 people or 30 bucks an hr for 2 people who could operate a machine that cranks out a massive amount of tacos that are at the perfect weight and product distribution is equal throughout the taco. Additionally, the mechanical system would pay for itself within the first month by eliminating losses due to error. And, the system could track the number of sales per day and order the correct amount of product needed. Consequently, the food items would go down in price for the consumer. Now the cool part; on the job education and training for the employees working on the machines! We could have fast food workers with technical backgrounds which would inevitably help them get better jobs (in theory). I am all for raising the minimum wage because I have faith in our capitalistic society to come up with some cool stuff. And yes, I understand this is a hypothetical situation but it would be interesting to see how buisnesses react to such a sudden increase in pay for their employees.
Generally speaking, the minimum wage is probably a good starting wage for the young and singles that live with their parents. From an economically independent vantage point, the minimum wage actually increases poverty, increases unemployment because people don’t feel motivated to work. Well, the simple explanatory reason would be to say “hey, I get more benefits for being unemployed than working” So, there is a psychological dichotomy that needs to be viewed.
The Unemployment benefits versus minimum wage which one would be more beneficial in dealing with expenses?
There must be an increase in the state and federal wage index in order to motivate people to work. The minimum wage may help some who are situated differently , but overall it’s viewed as a damaging force to the business industry.
Raising the minimum wage would benefit a few (those making the minimum) in the short term, but long term it is more harmful. The immediate effects of having more money to spend on food are lost when the cost of the food goes up (similar to gasoline, when I made minimum wage, gas was cheap. I make tons more now, but the price of gas has more than tripled, my income has not kept the same pace). Additionally, those workers who are close to the minimum wage gain nothing (in fact, they will get offended at the idea that they had to work up to their current wage, and someone who just started is making the same or close to their wage). This happens quite often when businesses find it hard to find new people to hire, they increase the starting wage. Employees that may have been there for a few years are not compensated as well and feel that their loyalty is actually working against them. Why work here if I can go there for the same amount?
Finally, the article talks about how those making minimum wage (or close to it) actually spend more. This would also explain the change in real family income that Investigating Difference references (pg. 59). The top 5% actually gained income because they had the means to put the money into things that would produce more money for them (stocks, savings bonds, etc.) while those that are at the bottom had a 1% decrease in their “real family income” due to their inability to save. Increasing the minimum wage would not produce a proportional increase for the bottom 20% because the added wages would not be invested long term, they would be spent on basic needs of the employees or their families.