Beyond the Cusp

February 8, 2017

The Coming Destructions of the $15 Minimum Wage

 

There are a number of Democrat run and owned cities which feel they have found the solution to poverty caused by those working merely for the paltry $7.25 per hour; the new dawning of the $15 per hour minimum wage. These cities see no problem with doubling their minimum wage and believe that the businesses, such as burger and other fast food restaurants and retail shops will have no choice as they will be unable to move from the city. They have missed another alternative that those unable to move beyond the city limits will face, total disappearance as they find it impossible to sell their merchandise at the inflated price required to pay their remaining help the overly inflated salaries. Where the minimum acceptable wage is already around $10 per hour the increase will still cause hardships for the retailers and manufacturers. Their higher priced goods will cause financial distress for those residing within the city limits without the means to get to the suburbs where the prices will actually be lower. Even the real estate will lose value as it becomes more difficult to rent their retail and manufacturing spaces and the cities slowly fall into disrepair as the people find they have little if any choice but to leave the city. With what jobs currently exist being initially cut just to remain viable, the economic base for these cities will be cut from under them. The loss of jobs will lead to decreased business which will again lead to more job loss in a slow death spiral. These cities will slowly turn into husks collapsing under their bureaucratic foolishness. They are signing their death warrant in their misguided attempt to right a nonexistent wrong.

 

When I first entered the job market the minimum wage was all of $1.25 per hour; yet nowhere in the entire area around the city where I resided could one find a job at that wage. The minimum wage by 1975 had risen to the unbelievable heights of $2.00 per hour and even that was not high enough to affect work in my home city. The reason was simple, nobody would accept such a wage nor could any employer find workers even for digging ditches at such a wage. My first job was washing dishes at a diner which paid more than $1.50 and was among the lowest paying of jobs. As it turned out I was a poor dishwasher and was fired within the first few weeks. From there I found work stocking shelves at a chain shoe store which paid even more and eventually became a commissioned sales person where minimum wage never became a consideration. Still, even friends who took construction work actually digging ditches or, as I did one summer, building railroad tie walls in a new community development were paid well above minimum wage. I know that across the nation there were many places where the minimum wage was the guideline for minimum wages of employment but that was always a starting salary. Anybody working at a minimum wage who was still making the minimum wage within six months or a year was usually soon to be seeking a different line of work as they were not up to par. Minimum wage was a test salary which was offered largely as one learned how to work at their chosen job and once they proved proficiency their salary would rise above that minimum rate. This fact was one of the truths I found wherever I moved was that any employee worth their salt made minimum wage only for the shortest of periods and once they proved their worth they received a more decent wage. Are there those who make minimum wage to start and will continue making that level no matter how hard they work? Yes, but these are a very small minority and few of them are raising a family on their salary. Those who only make minimum wage for extended periods of time will not benefit from a $15 per hour minimum wage as those will be the first people who will be let go. Often those making minimum wage for prolonged periods of time often are kept on the payroll not because they are price efficient but because their employers realize they are doing the best they are able and they remain employed more for spiritual or social reasons than economic ones.

 

History of the National Federal Wage Rate

 

The reality is the world is a hard and cruel place with little sentiment, though fortunately there is more sentiment just not in the workplace. In the workplace every salaried individual must fulfill a simple parameter; they must make more money for their employer than their employer pays them. Businesses are not for generosity or charity, even those in the business of charity as even they must show a profit for every employee. Their secret is the majority of their employees are largely volunteers and thus can easily take in more than they cost. Businesses need to make a profit or they serve no purpose and would soon go out of business without a profit margin. Let us take an example of a business which makes exactly the money as it pays out in salaries. How long would the owner and his family survive if this was the case? Owners only receive a salary from profits after all expenses are paid and thus employees must make more than they cost or the owner has no reason to remain open. Further, what is the owner to do when the rent for the store space comes due, the water and electric bills, the gas bill, taxes on the property and on sales, and how do they pay for the insurances for their employees such as medical (Obamacare does not come cheaply to the average business) and unemployment and payroll taxes etc. And then there are the other incidentals an employer has such as the Christmas party and cupcakes for employee birthdays and of course meals for their own family. If it is a large company then there may be stockholders who also demand profits otherwise they will take their investment capital elsewhere.

 

These are the most basic of reasons that the $15 per hour minimum wage is going to bust many of the cities employing it. There are probably a select few cities such as San Francisco, New York, Los Angeles, Washington D.C., Chicago and a maybe others where the minimum employable wage, not the minimum wage but for that location it acts as the minimum wage, is already over $15 per hour. These cities could make the empty statement that they are raising their minimum wage to $15 per hour knowing that virtually every employer, especially their main employers, already are paying $16, $17, $18 or even more just to find worthy candidates to fill their positions. The problem with their taking their minimum wage above the national average is it places an upward pressure on smaller and less affluent cities to follow suit when their economic situations cannot support such a wage scale. It is all well a good for the major cities where there are no shortages of employable people compared to the job base to make offers to raise their minimum wage to less than the going rate as they and their employers will not suffer. But as this is not about their minimum wage, it is about making a case to raise the Federal minimum wage to $15 per hour, which the Democrat Party has been pushing, which would have disastrous results especially for rural neighborhoods and farm laborers. Small towns would find the higher prices near impossible for families to meet and employers would run their businesses as lean as humanly possible possibly leaving numerous former employees unemployed. These communities would soon be faced with taking their economies off the grid, so to speak. They would most likely turn to a barter system which is untaxable and makes things relative and neutralizes the minimum wage as what is the worth of bushels of wheat in exchange for a new roof on the barn? Soon these communities would drive out any competitors who could not accept bartered goods such as the chain stores which run only on dollars and cents. No, the $15 per hour minimum wage argument is mostly being pushed in Democrat controlled major cities such as Seattle, where their Federal Court Judge heard a case and has attempted to nullify President Trump’s immigration vetting delay from terror ridden nations. These cities already have virtual minimum wages well above that $15 per hour and thus are only going to hurt small Mom and Pop stores and other smaller enterprises or workplaces with low profit margins such as miniature golf courses, etc. The whole reason behind the minimum wage argument is to give false hope to young employees who see such a higher minimum wage as their salvations not realizing that it will only bring about a bout of inflation until the new minimum wage will be equal in buying power to the present minimum wage and will only result in the American worker becoming more expensive and thus chase more jobs overseas. This is a bad argument and can only harm America, but what do the politicians care if they can garner a few extra votes in November?

 

Beyond the Cusp

 

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October 21, 2016

The Real Reason Behind $15.00 an Hour Minimum Wage

 

There are all the usual reasons behind the proposing of a $15.00 an Hour Minimum Wage and it has little to do with actual minimum wage. One of the standards for an increase in the minimum wage is and has always been the unions. Many unions have salary agreements based on the minimum wage. This means increase the minimum wage, and union salaries automatically get a boost. When union salaries get a boost, then union dues get a boost. If union dues get a boost, the union leaders get more money for their own wages and for political donations. As political donations go higher, then incumbents get support of more PAC monies and this cements their job for life. So, in the end the politicians raise the minimum wages and the donations to the parties and their own campaigns increase thus making it that much more difficult for some upstart young man with the dreams of repairing the system to ever have a chance and the system is comfortably maintained. But even more is at stake this time around.

 

The introduction of ObamaCare forced employers of minimum wage employees to cut their hours to thirty hours so many positions became four six-hour days or three eight-hour days thus producing a twenty-four hour workweek. With these hours it also made it easy to establish seven-day-a-week, twenty-four-hours-a-day coverage by employing four shifts of six-hours/four days a week, and three shifts of eight-hours/three days a week, and presto-chango the twenty-four/seven week scheduling was covered. This actually worked out cleaner and easier to now cover the twenty-four-seven workweek than it had been with the forty hours a week which left weekend scheduling which often had two twelve-hours-a-day weekend staff which led to poor performance as twelve hour shifts have proven to be overly taxing on the individual worker according to many studies. The twenty-four hour workweek solves that problem very tidily. This caused a different problem in that the forty hour a week minimum wage earner now being reduced to twenty-four hours per week part time work placed an undue strain on the finances of anybody attempting to live on a minimum wage salary. The solution, make a twenty-four hour workweek pay close to what the forty hour workweek had paid in salary. The current Federal Minimum Wage of $7.25 per hour making a forty hour work week pay $290.00 and if one were reduced to a twenty-four hour workweek one would need a salary of approximately $12.10 per hour and if working a mere twenty hour workweek would require a salary of $14.50 per hour. This makes a fifteen dollar an hour minimum wage a slight increase in pay and would actually cover a minimum wage using the twenty-four hour workweek of $9.00 per hour for a forty hour week. (For a list of minimum wages by state see here.)

 

Where this would be a nice explanation, there is even further reasoning behind this and that is the idea which has begun to be floated of a minimum livable salary for everybody. This idea is a guaranteed minimum annual salary paid by month which would be given every citizen of voting age regardless of their work status. This living wage would be based at, you guessed it, the $15.00 an hour minimum wage and be set just a mere $1200.00 per year less than working the forty hour workweek at $15.00 an hour. The worker at this imaginary line would earn an annual salary of $31,200.00 per year and the guaranteed monthly minimum would be $2.500.00 per month or $30,000.00 per year, a mere $1,200.00 less than the standard forty hour per week at $15.00 an hour minimum wage. Thus if you worked one of the twenty-four hour part time workweek at $15.00 an hour your salary would equal $18,720.00 per year thus you would receive a check each month of $940.00 each month bringing your salary up to the guaranteed yearly rate of $30.000.00 a year. Further, when this guaranteed minimum wage would be enacted ObamaCare would already have been amended into a single payer healthcare system exactly like those failing healthcare systems throughout Europe thus there would no longer be any need for the twenty-four hour workweek and employers could resume having forty hour workweek employers unless they found the part time system to their advantage. With the minimum wage at $15.00 an hour and working a forty hour workweek one would be being paid $31,200 per year, a dizzying $1,200 more than the guaranteed minimum salary. For that minuscule difference to make a difference there would need be a earned income credit for people not collecting anything on the guaranteed minimum salary making employment even at minimum wage for full time forty hour workweek more attractive otherwise there would be even more people forgoing working and just taking the guaranteed salary, something which would likely occur no matter what the incentives.

 

Tech Workers of the World Striking

Tech Workers of the World Striking

 

The libertarians and conservatives would likely gasp and potentially come close to having a stroke at this idea and it will be strongly resisted but in time reality would force some system similar in nature to this even if initially at a lesser guaranteed minimum salary. The reason will become evident in the near future as Wendy’s is going to provide stores with an automated cashier and likely when possible automated food delivery as well. We can expect as robotics improve and become less temperamental (known as more dependable in the automation and artificial intelligence community) there will be more and more positions worked by automated employees, otherwise known as robots. In industrial positions, the first to automate, the robotics need not resemble humans in any manner other than wielding tools, even should those tools resemble appendages. In human interaction the initial AI robotic interface with the public or other employees will likely obviously appear robotic even if their actions appear close to natural. Their mode of transportation is more likely to be wheeled for speed and stability but expect bipedal as walking robotics become more stable and safe. Their appearances will also go from R2D2 to C3PO to so human in appearance it may be next to impossible to tell the robotic organisms from the human employees except the robotic employees will not get all of the jokes and will be pranked constantly by those who feel a need to show their greater imaginations. Eventually the robotic organisms will even match or exceed us in these fields as well though they will likely only use such areas of their programs as a defense mechanism and in getting revenge on their human tormentors.

 

The future will present the problem that almost all low skill and even moderate and eventually all but the highest level requiring human traits such as imagination will be filled largely by robotic organisms. Robotic organism lawyers will have sued to have them referred to as organisms even if we lesser humans insist on using the robotic label in order to feed our egos and to make ourselves feel superior in some esoteric manner. There will be no reason why robotic organisms cannot teach school having a human reference person available to assist when a robotic organism has difficulty interacting with biologic lifeform students but such humans will be mostly bored and will probably be able to back-up many scores of robotic organism teachers. Waiters, stockroom workers, sales positions, almost any position will eventually be filled by robotic organisms such that we will eventually reach a point where humans will only need work if they so choose. All of this is dependent on our robotic organisms at the least being amused at our presence or needing us to be consumers for their products. Of course there is always the science horror possibility that they will perceive us as unnecessary and eliminate us. There is one position which will be legally restricted from robotic organisms being employed, politicians. There are already long-haul truck companies starting to look into automated tractor trailers for inter-city long-haul truck routes which is being fought against by the Teamsters Unions. No surprises there. There will be no preventing the use in more and more positions of robotic organisms even if at first it will be a bit of a novelty, it will soon thereafter become a necessity for doing business as the company using robotic organisms will have a large advantage over one using old fashioned human workers. Competition will lead to replacing human organisms with robotic organisms even to the point of their using robotic organisms as the supervisors until they realize that robotic organisms do not require supervisors, just repair technicians which can also be robotic organisms. It’s the future and that is part of the $15.00 an hour minimum wage which will lead to the $2,500.00 a month individual minimum wage. The only thing we would like to request is please do not kill the messengers as was the case in Shakespeare’s Hamlet.

 

Beyond the Cusp

 

September 8, 2016

Why I Accept Most Inequality

 

Inequality is part of existence and no matter how hard those who believe all inequality must be eradicated, inequality is a part of the human existence. Accepting inequality does not mean that you accept all inequality as there are certain areas where inequality must not be tolerated. The foremost of these is justice and treatment under the law and in access to services and other areas where inequality is an anathema. We must have equal application of the law, equal access to legal defense when charged with a crime and equality in all applications of the powers of government. But even in this there are limits which we must address and decide whether these areas of unequal treatment are acceptable. We can easily give an example where even the most adamant proselyte of equality likely will confess to their acceptance of an inequality. The tax code and such support programs such as food stamps, unemployment insurance payments and welfare payments are all areas where society has agreed to not only allow inequality but to strictly enforce and apply these inequalities in perpetuity. There will be candidates running for office in the United States this fall who will base much of their campaign on the application of inequalities in how the government treats members of the American public. They will favor supportive programs which apply largely to their electorate and against any supportive programs which are not applicable to their electorate. An obvious example would be any candidate running for office in the areas around Washington D.C. will support increased wages for Federal Government employees while somebody running for office in central Nebraska or central Montana would call for limiting or even freezing government workers’ salaries. Somebody running in an area where there are a majority of union employees would favor pro-union legislation and programs and probably also the raising of the minimum wage to $15.00/hr. as many union salary scales are figured using the minimum wage as a scaling point.

 

Inequality is a fact of life and the sooner people understand that, equality in all things can never be accomplished. What one should not accept is inequality which is unnatural or selective in manners other than those inequalities which are a result of natural abilities or differing efforts or difficulties of task. Obviously the greeters at the neighborhood box store and a brain surgeon will not receive equal income. Though the greeter interacts with and potentially can make a positive influence on more people; if you or a friend or relative needed brain surgery, the greeter would not likely have the necessary expertise. The brain surgeon invested a large part of their life and developed a specific and vital skill which may only have an effect on a smaller number of lives. The inequality of skill levels and number of people mastering the skills of the brain surgeon is a much smaller and more elite group of people. Of course there will always be the equality in all things who will make the claim that had the greeter had similar opportunities and training they too could have become the brain surgeon. Where that could be accurate, there would be no means of discerning the reality because, believe it or not, life itself is not equal; but if we are lucky, it is fair.

 

Scales of Life in the Balance

Scales of Life in the Balance

 

Equality is one of the important qualities we should use as the basis in how we treat one another. We should not accept biased treatment in our societies, from our judicial system, by law enforcement, in service in public areas such as restaurants, in residential opportunities and numerous places all of which have some relation to interpersonal interactions or opportunities. Even when a society achieves equality in all of these areas, there will still be inequalities for which any solution would require the force of government and would in and of themselves be a form of unequal treatment. Where equal pay for equal work can be a sticky area, equal pay for all people is not actually equality, it’s communism. The problem with full equality for all incomes is that many people will choose the easiest work rather than work harder at a more difficult profession and not receive greater remuneration. What would be the reason to work at some taxing job requiring great exertion of physical energy or years of training and constant continuing education to learn the most recent developments or techniques rather than seek easier employment such as the greeter’s job we spoke of earlier? Granted there are those driven few who seek the challenge but there would be far too many capable people who would not work to their fullest if there were to be no opportunity for additional remuneration. Enforcing universal equal pay would result in losing one of the main incentives which drives many to achieve greater achievement. Without inequality in pay scales there would be little incentive to attempt to advance or perform at a higher level than your fellow employees. Across the board equal pay no matter the level, difficulty or dedication of an employee in their choice and enthusiasm and commitment is the quickest path to across the board disinterested and lazy employees who have little drive or will to exceed or even succeed.

 

Most of the inequality we find in our day to day world has a direct relation to effort, level of education, difficulty of vocation or physical requirements. The one inequality we most often hear people complain over are the huge salaries paid to professional athletes. Every time the same point needs to be driven home. The discussion usually starts off asking if the top salespeople working on commission making hundreds of thousands of dollars a year selling top products such as real estate, high end jewelry or other high end items deserve what they earn. The answer is always a definitive affirmative. Then we ask about the top medical physicians who perform the most difficult procedures such as heart surgery deserve their high paychecks? Again we hear the answer stating of course. We then mention CEOs and the other heads of industry. Then we point out that all these people have one thing in common, they are in the top five to ten percent in what they do and so are professional athletes. People at the top of their professions, and especially in the top of high money making professions such as sports, make the large salaries in proportion to the money flowing in their line of work. Are ticket prices ridiculous, yes but on the other side the average person can have a better than front row seat with slow motion replay and professional commentary watching the same game or event on television. Pay for view being one of the most expensive television viewing protocols still is often no greater than one hundred dollars and if you have a party with nine friends then it costs only ten dollars each and you get a front seat and reasonably priced refreshments with a wider range of foods from which to choose, and you’re watching it with your closest friends, what could be better.

 

Equality is something which is a target which we aim to satisfy as best as we are able. Will we ever attain complete equality in those areas where it serves society? Very likely not but that allows for improvement which gives us a reason to try that much harder. We need to fall short from time to time such that we have reason to improve and find new and better means to achieve equality. The one caution we need to remember is that equality in all things should never be the goal. Equality in measure to difficulty, level of performance, importance to society and other considerations will always provide inequality in payments to individuals who satisfy the most demanding needs of the society. Sometimes the inequalities may not be apparent to all people but as long as there is a segment of society willing to put out the money, there will be those who will find the means to satisfy those demands. The good side is that as long as there are these opportunities which offer unequal pay scales, there are opportunities for anybody to find such a niche and make some of those higher paychecks for yourself. Most of us will not take the high risk route and settle for a more equal salary which is guaranteed steady and less risky, which is our choice to make. Sometimes we can make inequality work for us but the one thing we need watch is that we deal with greater equality with the people whose paths we cross. As long as we deal with care and equality we can expect similar treatment ourselves and if we have quality friends and business associates, then we can consider ourselves fortunate and thank Hashem for such goodness in our lives. As a last note, we are all equal before Hashem and Hashem alone judges our goodness.

 

Beyond the Cusp

 

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