As an employer in the service sector, I wonder how proponents of the "livable wage" argument would define "livable wage." Do we say $10 per hour ($20,800 per year)? Why stop there? Should it be $25,000 per year? Without giving any consideration to market forces, picking an arbitrary dollar amount could kill many businesses. If you think that's rhetoric, consider the following;
The cost of labor is always the single biggest expense in the production of goods and services. My business is dry cleaning. The jobs I offer don't require a great deal of education and training. In today's marketplace, we can charge $2.40 to launder and press a shirt, $5.50 to dry clean a pair of slacks, skirt or blouse. Now let's just say that I'm required to hire people at $10 per hour instead of the current $8.00 per hour I offer (which is above the federal minimum wage). That is a 25% increase. Service industry profit margins are typically low. A 25% increase in wages would have to be passed onto the customer. Based on this, a shirt would now cost $3 to launder and press and dry cleaned slacks, skirts and blouses would now be $6.88 each (before any taxes). I wonder how long the proponents of "livable wages" would be willing to pay such an increase in goods and services.
If we were to mandate a "livable wage" the cost of all goods and services would increase. Since the poverty level is some calculation that incorporates the cost of goods it seems that the poverty level would also increase. Ergo, if we were to make the "minimum" livable wage some percentage of the poverty level, the calculation would continuously change. I.e. the cost of goods goes up, causing the poverty level to change, causing the "minimum" livable wage to increase, causing the cost of goods to increase and the cycle goes on.
While I recognize there are poverty issues in America and around the world, most of the "poor" in America have lifestyles well above the middle class of other countries. I visited a "middle class" neighborhood in China in 2009. They didn't have indoor plumbing.
I believe it is very important for us to raise up the disadvantaged and the downtrodden. The problem I have with this in America is that we seem to have redefined poor. We rail against "the rich" and cry that the poor should have all the same accesses as the rich. We want to walk into Walmart and buy big screen TV's for rock-bottom prices yet Americans aren't willing to work for the low wages it would take to manufacture/assemble that same TV for the price we are willing to pay.
I think we are fast approaching the time when we're either going to be forced back to letting market forces dictate costs and pay (which may mean many of us give up many of the things our parents considered luxuries), or we will be forced to pay more in taxes to subsidize basic living expenses for the majority of Americans.
What do you think?
Agreed! Will write more next time, just thought I'd pop in quickly after our conversation earlier today (yeah, it's Michelle!) Will now try and select a profile and see if I can get this posted, then I've gotta get off this thing for the evening but will give you more feedback in the future. Thanks for looking into your settings!
ReplyDeleteBeing a manager in a company shows me that people cannot live on "minimum wage". And that any person with any ambition will not work for you for long. Most people want to have nice things,houses,cars, furniture, etc. Most of the turn over in my profession is because someone else is willing to give them a pay increase or a different package of benefits, which in turn changes their position in society.
ReplyDeleteWhere would all of us be if we did nothing but work for $8.00 an hour....$320.00 per week? That wouldn't even pay my house payment. Ambition,drive, desire to have a better life are what changes people.
Steve You know me, I have lost everything, but, when I did, I only looked back to say it would never happen again......
Ray M
I think the majority of those calling for calling for this come from two camps, The first who are currently comfortable in their world and feel compelled to do something. Second is the workers who are making those wages. Both don't understand how it works. I agree with privious entry ambition and hard work leads to success. The question to ask them is what is correct level of pay and level of comfort and who determines it? Where you live and cost of living for that area determine for a large part of what people make. I don't know but using Steves examples I would bet those same items cost more in New York or Washington DC because of area. To set a base line wage for comfort will cause lots of shops to simply close.
ReplyDeleteSteve, well said! Marcy said I'd like your blog...
ReplyDeleteRay, you're right. Many, perhaps most, folks making minimum wage don't have your drive and perseverance. Our son got a computer degree from UWF but hasn't been able to find a job in his field so he's been working for West for two years. He's now finishing up his teacher education and will, with luck, be teaching this fall.
You can always find a way to improve your lifestyle if you want to.
Michelle's comment reminds me of the old "equal pay for equal work" when talking about women making less than men.
ReplyDeleteI strongly agree that two people, of equal education, knowledge, and skills should be paid the same for doing equivalent jobs. But this isn't what a lot of folks want; they seem to believe that the average wage of 40-year old women should be equal (or greater than) that of 40-year old men. That proposition fails to take into account the higher levels of responsibility men have historically had.
With luck, my children's generation will be a lot more equal than my generation.