In last week’s paper, our editorial board took a stand on increasing the minimum wage.
Making such an adjustment is not nearly as easy as it sounds. Yes, with the pound of the gavel and swipe of the pen, a law can be enacted to raise the minimum wage, but the effects on the economy and jobs would not have the effect many are looking to see.
A drastic 45 percent increase in the minimum wage to $10.50 would be as much a shock to the economy as the Affordable Health Care Act is currently having on the state of health care in our country. Minimum wage is designed as an entry-level starting point. This country was built on capitalism and a supply and demand approach to the cost of everything.
You might say shame on employers who keep hardworking employees at minimum wage, but if there wasn’t an over abundance of supply -- in other words, employees willing to fill those positions -- employers would be forced to increase the wage in order to fill those jobs and keep employees who have a proven value. In turn, employees need to understand that minimum wage is an entry-level job that generally requires little skill. Employees take these jobs to develop skills that will allow them to seek higher paying positions.
Many companies have positions that can be handled by those with few skills and are willing to operate with a revolving door of people coming and going. Their business plans are built on the premise that anyone can do the job and they will not pay more than the minimum required by law because even the most talented person can’t do the labor-intensive job much better regardless of how long they choose to retain the position.
Now before you tar and feather me, please understand my point. The major problem with minimum wage is that it hasn’t kept pace over the years and it can’t be fixed all at once without upsetting the economy and having devastating affects on the workforce.
New York, Vermont and other states have taken the right approach to the minimum wage issue by not waiting for the federal government to act. These states adopted modest adjustments each year to provide employers the opportunity to adjust the rates of the products and services they offer in order to accommodate the increased wages. It also allows for accommodation up the line so as the base wage is increased so must the scale for other employees to be increased proportionately.
Our region has not only seen an exodus of employees leaving the area, but also fewer private employers also. As an employer, income to keep a business afloat has not been plentiful the last few years. Wage increases for staff have been hard to come by, with staff reductions and belt-tightening being a way of life over the last few years. It would be great if the government could mandate a 45 percent increase in sales to accommodate the mandated increase in wages, but our free market economy doesn’t work that way. If a business cannot afford increased labor costs, they must look to cut costs elsewhere or risk their life’s savings trying to hang on for better times. If neither of those options are viable, their last option is to close their doors.
In my younger years, I worked at 85 percent of minimum wage as was allowed at the time for students to earn some money, gain some experience in the workforce and learn the value of paying your own way. I learned quickly in my job at the supermarket bagging groceries that performance was my ticket to improved hours, wages and opportunities. Our system must never lose sight of that simple and basic principle.
I would strongly support improvements to the minimum wage laws provided it was fair to both employer and employee. It must also provide incentive that encourages both employer and employee to advance equally. Employers should not be allowed to keep employees on a minimum wage for any longer than 18 months. If the employee hasn’t proven their worth in that period of time, the employer would be forced to either raise the wage to the next mandated level or cut the employee loose to find a job they could excel at with an employer who valued their employment.
There are employers who value and reward hard work and initiative. There are also employers who take advantage of their employees. There are also employees who squander opportunities given them. No rule of law will ever substitute for those who chose to game the system nor should the rule of law reward those who look to do any less than their very best, be they employer or employee.
Dan Alexander is associate publisher of New Market Press and publisher and CEO of Denton Publications. He may be reached at email@example.com or firstname.lastname@example.org.