Beyond the Cusp

February 26, 2014

Who Are the True Beneficiaries of a Minimum Wage Increase?

The United States Congress and Administration are once again discussing the disparity of incomes and as a byproduct the need to raise the minimum wage. The lamenting over the rise in the disparity of wages will center on incomes, people will see most of the mainstream media and the Obama Administration referring to the large increase since the year 2000. Their tactical reason for choosing this date is that by including the entirety of President Bush’s terms in the White House they can infer that much if not all of the growth in the disparity occurred during his term and not during their times with control over the Congress and White House. This is pure obscuration of the true realities which the numbers actually prove, that the disparity of incomes between those at the top and the middle class and poor has widened at its fastest rate under President Obama, and worse yet, the fastest was during the first two years when the Democrats also held an unopposable majority in both houses of Congress. This disparity was part of the reasoning given by President Obama when he unilaterally raised the minimum wage for Federal Government contract employees and employees under government contracts to $10.10/hour. Along with this announcement was the call for Congress to pass legislation and send it to him to sign raising the national minimum wage to the same level and he claimed that it was their obligation to do so. The claim was that those families who depend on a minimum wage worker for their income deserved to at least make close to the poverty level in wages and not the paltry amount they currently make with such a low minimum wage. But was this the truth or was this a bald faced lie meant to conceal other motives?

 

The truth is that very few families depend on minimum wages for their income and that most minimum wage employees are either teen part time workers still attending school or people starting on their first employment. Either group finds themselves making minimum wage for an average of less than one year before they receive a raise placing them above minimum wage. Another unreported truth is that in the majority of major metropolitan areas the minimum offered wage is well above the minimum wage as the competition for responsible and sufficiently trainable and motivated employees demands salaries well above minimum wages. Another group left out in the discussion are those who have worked diligently and received one or maybe more raises who will now once again be making minimum wage as the minimum wage rate has been increased to the level they had worked hard to attain. Also left from the discourse is the fact that a significant group of those earning minimum wage are in reality earning above minimum wage as their actual salary is calculated under some formula of a base minimum wage salary either plus a percentage of sales in commission or a straight commission of their sales with a guarantee of minimum wage if their sales during a pay period fail to earn sufficient commission to receive greater than the minimum wage for their hours worked. Most people working on a commission against minimum wage will not keep their position for any length of time should they receive too many periods at minimum wage as that means they are not making sufficient sales to be profitable to their employer. Add the one massive drawback of raising the minimum wage which always results in some minimum wage employees being let go as the employer often cannot increase the total amount of dollars budgeted for salaries so they need to make do with less hours or fewer employees in order to keep their budget within their expense and outlay plans. Then there are those employees who are exempted from any minimum wage laws such as wait personnel as they receive tips and that is taken into consideration when they were exempted in most jurisdictions from minimum wage requirements. This begs the question as to what may have been a hidden purpose for increasing the minimum wage, a reason that has been omitted from the normal discourse.

 

One reason that many may be unfamiliar with the hidden reason which has always been behind the Democrat push to increase the minimum wage rate on an almost regular basis is due to not having ever belonged to a union or have any familiarity of how union wages are calculated. Many of the unionized position, especially many large union manufacturing positions, are based on a rate as a multiplier against the minimum wage. So, when the minimum wage is increased, many, many union wage positions receive an increase often considerably larger than the increase in the actual minimum wage as they are calculated by some formula which is often some form of multiplier. Thus, by pushing through increases in the minimum wage the Democrats are serving their union member base as they will also receive an increase along with those making a minimum wage, at least the minimum wage earners who are not among those who were let go due to budgetary restraints on their employer when having to pay an increased wage. But the benefits realized by those union workers who received an increase resulting from an increase in the minimum wage is insignificant than the ones who are the real beneficiaries in this chain reaction being revealed here. The ones who make the largest increase in their incomes are the union officers, also often called union bosses. The high officers within the union structures make salaries commensurate to CEOs of the companies who employ their union members and possibly even more. These are the real power brokers who have significant influence over the members of their respective unions and can often really influence the votes cast by union members, though that influence has come under some challenges of late. These union elitists are also the ones who decide where and to whom the largess of union monies will be allocated at campaign time. That cash flow into the Democrat coffers at election time is the true and honest target that raising the minimum wage is aiming to influence. The Democrats can plead to be helping the little guy who is raising a family on minimum wages, a group whose numbers are so negligible as to be statistically insignificant or even completely nonexistent at the given point in time, and as a result of playing the assist the most desperate among us facilitate increased salaries for thousands upon thousands of union employees and granting significantly greater largess upon the elite union officers who in turn deposit equally great amounts of largess into the Democrat coffers come election time. Putting it in the simplest language, the Democrats are raising their campaign slush funds that can be used generally, as these contributions go to the party to be distributed as seen necessary in order to get around campaign finance limitations on candidates, while pretending to care about those who are basically powerless when it comes to political clout. As it is with virtually everything done by every candidate, political party and anyone else in a position of power or influence, the Democrats raising the minimum wage is simply a back door way to deposit even more cash into their coffers allowing for electioneering in the foreseeable future.

 

Beyond the Cusp

 

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