Obama is now out there trying to peddle the idea that we need a raise in minimum wage. There’s so many problems with this! On a very simple level, it is going to raise price of goods, essentially canceling out any benefit for those who may need it. If you, as a company, are required to pay more in employee paychecks, guess where the money comes from? The consumer! Prices will NEED to then go up.
Secondly, it makes employers less likely to hire, which means teenagers will have a more difficult time entering the workforce and gaining needed experience. Think about it this way, using fictional numbers: if an employer has $10 a month to spend on employees, and minimum wage goes from $2 to $5, the workforce at that company is necessarily going to drop from 5 down to 2, or, as I mentioned above, the prices will go up, which may end up having the reverse effect of hurting sales, which will aggravate the problem, possibly bringing the employee budget to $5, which would end up with one employee. Look at that: from 5 employees to 1, all because of minimum wage increases.
But lastly, minimum wage jobs aren’t meant to be family supporting jobs. If people are living on them, the main problem is the lack of economic growth. That’s what we need. As they say, a rising tide raises all boats. If we can get the growth, the minimum wage won’t be such an issue. People will be able to leave jobs if they aren’t getting what they need.
Updated on 3/23/2013
Well from “my perspective”, I’m a little discontent in the work place. I am 46 years old, I work part-time, and do not make in the two digits (per hour).
Since I am a part-time worker, the company will not offer me health insurance. Really, I feel pretty darn sad for me! I did not think this would have been my life at 46! A few years back I went to MATC, hoping to learn some skill that would have benefited me, but the programs I wanted to enter were always filled with a two year wait period. So to get in the door, I just took various classes of interest, (now I have sixty-two credits) no degree, and I now work part-time, no insurance, not a two digit per hour wage. Life truly isn’t fair. I have never commited a crime, I donate (what I can) to charity, I try to do the “right thing” (whatever) that is? And I get no breaks! Am I bitter? Well, yah!
Can I get a second job Ben? I don’t want to! I ywork HARD ENOUGH at the one I’ve got! I don’t want to put myself in an early grave from the stress of two jobs, as I said, I already do three jobs in the one job (that is part-time), why should I have to kill myself trying to earn a living wage?
While I can’t claim to understand first hand what you’re going through, I can see how you can be really frustrated. But the problem with raising minimum wage is that it’s only going to hurt people like you. In fact, it will hurt people like you the most. By doing so, especially on a federal level, it raises the prices of ALL goods, making it even more difficult to get along. In many cases, it even forces layoffs, because many businesses are barely making ends meet as it is.
It’s one of those things that sounds good at first, but really has far reaching but hidden negative consequences.
“If you are supporting a family on one, why not either look around for a different job, or [gasp] work harder, so you can get that raise your employer isn’t giving you (because you aren’t working as hard as you could)?”
Wow, that’s an extraordinarily unfair generalization. Many people in minimum wage jobs are honest, hard-working folks who, due to varying circumstances, cannot find a better job. To assume that someone only makes minimum wage because he is lazy is a most uncharitable assertion.
I agree that raising the minimum wage is NOT the solution, but neither is more unfettered Capitalism. The greed of the wealthy in denying their employees a just wage is a most despicable sin, as has been consistently taught by the Magisterium:
“Furthermore, the employer must never tax his work people beyond their strength, or employ them in work unsuited to their sex and age. His great and principal duty is to give every one what is just. Doubtless, before deciding whether wages are fair, many things have to be considered; but wealthy owners and all masters of labor should be mindful of this – that to exercise pressure upon the indigent and the destitute for the sake of gain, and to gather one’s profit out of the need of another, is condemned by all laws, human and divine. To defraud any one of wages that are his due is a great crime which cries to the avenging anger of Heaven. ‘Behold, the hire of the laborers… which by fraud has been kept back by you, crieth; and the cry of them hath entered into the ears of the Lord of Sabaoth.’ Lastly, the rich must religiously refrain from cutting down the workmen’s earnings, whether by force, by fraud, or by usurious dealing; and with all the greater reason because the laboring man is, as a rule, weak and unprotected, and because his slender means should in proportion to their scantiness be accounted sacred” (Leo PP XIII, Rerum Novarum, 20).
“The members of the working classes are citizens by nature and by the same right as the rich; they are real parts, living the life which makes up, through the family, the body of the commonwealth; and it need hardly be said that they are in every city very largely in the majority. It would be irrational to neglect one portion of the citizens and favor another, and therefore the public administration must duly and solicitously provide for the welfare and the comfort of the working classes; otherwise, that law of justice will be violated which ordains that each man shall have his due. To cite the wise words of St. Thomas Aquinas: ‘As the part and the whole are in a certain sense identical, so that which belongs to the whole in a sense belongs to the part.’ Among the many and grave duties of rulers who would do their best for the people, the first and chief is to act with strict justice – with that justice which is called distributive – toward each and every class alike” (Leo PP XIII, Rerum Novarum, 33)
“Now, for the provision of such commodities, the labor of the working class – the exercise of their skill, and the employment of their strength, in the cultivation of the land, and in the workshops of trade – is especially responsible and quite indispensable. Indeed, their co-operation is in this respect so important that it may be truly said that it is only by the labor of working men that States grow rich. Justice, therefore, demands that the interests of the working classes should be carefully watched over by the administration, so that they who contribute so largely to the advantage of the community may themselves share in the benefits which they create-that being housed, clothed, and bodily fit, they may find their life less hard and more endurable. It follows that whatever shall appear to prove conducive to the well-being of those who work should obtain favorable consideration. There is no fear that solicitude of this kind will be harmful to any interest; on the contrary, it will be to the advantage of all, for it cannot but be good for the commonwealth to shield from misery those on whom it so largely depends for the things that it needs” (Leo PP XIII, Rerum Novarum, 34).
“Let the working man and the employer make free agreements, and in particular let them agree freely as to the wages; nevertheless, there underlies a dictate of natural justice more imperious and ancient than any bargain between man and man, namely, that wages ought not to be insufficient to support a frugal and well-behaved wage-earner. If through necessity or fear of a worse evil the workman accept harder conditions because an employer or contractor will afford him no better, he is made the victim of force and injustice” (Leo PP XIII, Rerum Novarum, 45).
“In the first place, the worker must be paid a wage sufficient to support him and his family. That the rest of the family should also contribute to the common support, according to the capacity of each, is certainly right, as can be observed especially in the families of farmers, but also in the families of many craftsmen and small shopkeepers. But to abuse the years of childhood and the limited strength of women is grossly wrong. Mothers, concentrating on household duties, should work primarily in the home or in its immediate vicinity. It is an intolerable abuse, and to be abolished at all cost, for mothers on account of the father’s low wage to be forced to engage in gainful occupations outside the home to the neglect of their proper cares and duties, especially the training of children. Every effort must therefore be made that fathers of families receive a wage large enough to meet ordinary family needs adequately. But if this cannot always be done under existing circumstances, social justice demands that changes be introduced as soon as possible whereby such a wage will be assured to every adult workingman” (Pius PP XI, Quadregesimo Anno, 71).
“But, with the diffusion of modern industry throughout the whole world, the ‘capitalist’ economic regime has spread everywhere to such a degree, particularly since the publication of Leo XIII’s Encyclical, that it has invaded and pervaded the economic and social life of even those outside its orbit and is unquestionably impressing on it its advantages, disadvantages and vices, and, in a sense, is giving it its own shape and form.
Accordingly, when directing Our special attention to the changes which the capitalist economic system has undergone since Leo’s time, We have in mind the good not only of those who dwell in regions given over to ‘capital’ and industry, but of all mankind.
In the first place, it is obvious that not only is wealth concentrated in our times but an immense power and despotic economic dictatorship is consolidated in the hands of a few, who often are not owners but only the trustees and managing directors of invested funds which they administer according to their own arbitrary will and pleasure.
This dictatorship is being most forcibly exercised by those who, since they hold the money and completely control it, control credit also and rule the lending of money. Hence they regulate the flow, so to speak, of the life-blood whereby the entire economic system lives, and have so firmly in their grasp the soul, as it were, of economic life that no one can breathe against their will.
This concentration of power and might, the characteristic mark, as it were, of contemporary economic life, is the fruit that the unlimited freedom of struggle among competitors has of its own nature produced, and which lets only the strongest survive; and this is often the same as saying, those who fight the most violently, those who give least heed to their conscience” (Pius PP XI, Quadregesimo Anno, 103-107).
“Nevertheless, in some of these lands the enormous wealth, the unbridled luxury, of the privileged few stands in violent, offensive contrast to the utter poverty of the vast majority. In some parts of the world men are being subjected to inhuman privations so that the output of the national economy can be increased at a rate of acceleration beyond what would be possible if regard were had to social justice and equity. And in other countries a notable percentage of income is absorbed in building up an ill-conceived national prestige, and vast sums are spent on armaments.
In economically developed countries, relatively unimportant services, and services of doubtful value, frequently carry a disproportionately high rate of remuneration, while the diligent and profitable work of whole classes of honest, hard-working men gets scant reward. Their rate of pay is quite inadequate to meet the basic needs of life. It in no way corresponds to the contribution they make to the good of the community, to the profits of the company for which they work, and to the general national economy.
We therefore consider it Our duty to reaffirm that the remuneration of work is not something that can be left to the laws of the marketplace; nor should it be a decision left to the will of the more powerful. It must be determined in accordance with justice and equity; which means that workers must be paid a wage which allows them to live a truly human life and to fulfill their family obligations in a worthy manner. Other factors too enter into the assessment of a just wage: namely, the effective contribution which each individual makes to the economic effort, the financial state of the company for which he works, the requirements of the general good of the particular country—having regard especially to the repercussions on the overall employment of the working force in the country as a whole—and finally the requirements of the common good of the universal family of nations of every kind, both large and small.” (Bl John XXIII, Mater et Magistra, 69-71).
“In spite of the great changes which have taken place in the more advanced societies, the human inadequacies of capitalism and the resulting domination of things over people are far from disappearing. In fact, for the poor, to the lack of material goods has been added a lack of knowledge and training which prevents them from escaping their state of humiliating subjection” (Bl John Paul II, Centesimus annus).
Obama’s socialistic policies certainly don’t solve anything, but neither does modern capitalism. It’s time for a system that focuses on Almighty God and the salvation of souls, not the false god of the almighty dollar which denies the dignity of man and rewards greed. Distributism is the only fully Catholic option that rejects the condemned errors of Socialism and the inevitable greed of Capitalism, and places Christ where He belongs as King.
I will admit that I phrased that poorly. I did not intend in any way to say that all minimum wage workers are lazy.
Ben:
I can assure you that at my place of work, they could toss an extra dollar per hour at all of their employees – and it would not hurt revenue “at all”.
I am not saying I am their best employee, but I certainly am not their worst either.
But I can say this with all certainty, I am their MOST DEPENDABLE! I am on time, I have never missed a day of work, and I make all their meetings. Surely all of that deserves “some recognition? Or is that just me beeing greedy? I think not.
At “some point” this new attitude of, “Just be grateful you have a job”, is going to backfire on the employer, you can only milk that for so long.
I drive a fifteen year old car, Do I deserve a brand new one? No, but I’d at least like one built in this century. I have no retirement account set up, (wish I had “something” put away for that). I pray to GOD that I do not end up in a state run retirement home in old age, you start thinking about those things when you get into your 40′s.
Ben, I think you are very smart and have a bright future ahead of you! But you really do not understand this issue as well as you’d like to think you do. I think this is one of those instances where the phrase, “You’ll understand better when you get older” applies.
I’ll stop talking and take your word for it
I’ll stop talking and take your word for it
I’m not sure why because your main point is valid: All the minimum wage hike does is increase the cost of production, and the only logical thing to do to offset it is raise the price.
The benefit to raising the minimum wage is:
“It boosts consumer spending, … and stimulating the consumer spending necessary for economic recovery”.
Everything is already raised, gas, milk, the cost of entry into a movie theatre, CD’s. Funny how our world seems to be hesitant when it comes to “workers wages”, but it’s okay if a gready CEO takes a bonus, or pay raise.
There is a old phrase, “You get what you pay for”. Paying a poor wage = undedicated employees, a fast turn over of employees, and poor employee attitudes.
If I earned a better income, I’d be able to contribute more to the church, but as it is, I’m on a strict limit with that.
Actually, I am going to refrain from future political comments. I am going to pay attention to the religious posts, as I find “catholicsm” a much more interesting subject.
It can be helpful to consider a real-world example — say, a business with 30 minimum-wage employees working 40 hours per week.
A one-dollar increase in the minimum wage will translate into at least a $1.10/hour increase in payroll costs, because of taxes etc.
The real increase could be *much* more because of workers’ comp insurance premiums, which can be 50-60% of wages. A roofing company in California, for example, could easily pay $1.75 more per hour to comply with a $1 minimum-wage increase.
But just sticking with the $1.10 increase — a business with 30 full time employees would see its payroll costs increase by $1320 a week, which works out to around $66,000 per year.
Can a business with 30 part-time employees absorb a $66,000 per year increase in expenses without any negative effect on those very employees? And even if it can, will the local community feel no downside (such as increased prices)?
It’s impossible to give generalized answers to those questions — but a federal minimum wage is an attempt to do just that, for every single business in the country, from Anchorage to Honolulu to Miami. Certainly some individuals will benefit, even in the long term, but how many more will suffer?
Oops, didn’t mean to say “part-time” in the second-to-last paragraph. Substitute “minimum-wage”
It works both ways. Increase wages, and employers are unable to hire as many people. Decrease wages, and the employees are unable to provide for the needs of their families.
Either way, it’s only fighting the symptoms and ignoring the disease. The real problem is an economic system which focuses on worldly commodities rather than on Christ our King and salvation of souls.
Quoth Belloc: