Probably the best "fix" for the minimum wage is to have it automatically adjusted based on the CPI, as is done for Social Security benefits and many (but not all) provisions of the IRS code.


Caveat:  There are some serious issues with how the CPI is calculated, chief among which is the exclusion of food and energy and the inclusion of such things as mortgage interest.  The very poor/low wage earners are likely to spend much of their limited income on food and energy, but very little if any on mortgage interest.

It is indeed unfortunate that the people in the board rooms and executives at corporate offices feel no responsibility for adjusting wages and salaries of their employees to enable a reasonable standard of living. It seems to me that they are more interested in keeping the expense related to human resources to a minimum. They say they need to do this because of global competition. So they make decisions like cutting back the workforce, increasing mandatory overtime rather than hiring additional staff, stifling annual increases (for the average worker the average annual increase today in the U.S. Is about 3%), moving manufacturing facilities and HQ's overseas to avoid taxes, and acquiring like companies to reduce competition.

The interesting result of these actions is, while less people are employed and those that are find their wages/salaries stagnant, the compensation packages of corporate executives continues to grow (statistics show U.S. executives make over 400% more per year than their average employees) at a staggering rate, and the quality of products and services provided by these mega corporations continues to decline. Doesn't that demonstrate that something is definitely wrong with the way our system is administered today?

Last edited by Rongone (8/26/2016 7:05 am)

As a business owner myself (although much, much smaller than rongone), I'll echo rongone's perspective on the issue.  His posts are spot on.

As far as increasing the minimum wage to $15/hr, I wasn't thinking of an immediate jump, but instead increasing the minimum incrementally.  Maybe over a period of 5 years, for example.

As I pointed out before, history doesn't support the premise that raising the minimum wage is detrimental to business or the economy, but in fact, the opposite is true.  Also, if the minimum wage were to increase, there is a ripple effect that works upward throughout the workforce and middle management.  

As rongone also observed using his own experience, the demand for goods and services is the driving force, not the supply side.

 

Last edited by Just Fred (8/26/2016 9:12 am)

tennyson wrote:

For background, here was  an interesting article from two years ago about WHO makes the minimum wage. It is from the Pew Research Center. 

http://www.pewresearch.org/fact-tank/2014/09/08/who-makes-minimum-wage/

One might conclude from the data that raising the minimum wage will have neither the widespread good, or bad effect that some proponents and opponents predict.

"There is almost certain to be a reduction in entry-level jobs in the economy if the minimum wage is increased to $15, which makes it difficult for individuals to enter the workforce and build job experience and skills necessary to further their career."


From my perspective, Individuals not having the skills necessary to qualify for entry level jobs seems like a failure of our education system along with lack of collaboration with companies stipulating the skills needed for the products and services they offer. How can a company say they can't find people with the necessary skills in the U.S., and then close down domestic facilities and then move their operations overseas to a third world country? Are they doing this because workers in Bangladesh are more skilled than domestic workers or because they will work for 20% of the wages of domestic employees? We all know the answer to that question. And, I submit, that is one reason that the quality of their products and services have declined when this action is taken. If you don't believe me, I can tell you stories, and I'm sure you or a family member, or a friend has expressed their frustration when calling a helpline and getting "Donald" located in Bangalore, India to help you solve your problem.

I suggest that more cooperation and collaboration between educational institutions, corporate training facilities, and government is necessary to educate and train workers here, in the U.S., that will fill the necessary slots in our workforce to ensure quality products and services at a reasonable price while providing quality employment for all workers at a reasonable wage/salary. Even at the expense of some of the outrageous compensation packages of many corporate executives like Heather Bresch.

Last edited by Rongone (8/26/2016 9:22 am)