I hear that a lot of "fast-food" workers will
strike today for higher wages. There is
talk of a national minimum wage of $15.00 an hour. It makes me stop and think. And what I think is things won't get better,
and here is why.
You might have learned that prices are based upon the economic
principle of supply and demand; that is only partially true. There are more factors involved. One of these
factors is risk and reward.
If the basic wage is $15, then the people now making $15 per
hour will want more. To maintain the parity, all wages will go up. To clarify
this last statement, wages are one form of reward for excellence in
performance. The shift supervisor makes
more than the busboy. The manager makes
more than the shift supervisor, and so it goes.
It provides incentive to do the best and advance in position. Why would anyone want to take more responsibilities
without more reward?
Wages and other benefits
are major portions of business expenses.
When expenses go up, profits go down. To maintain an acceptable profit
margin and keep the business open, revenue must go up. In most businesses that means prices must go
up. When the prices of goods go up then
the costs of other businesses go up and they too must raise more revenue. So things other than goods go up in
price.
There is talk about everyone deserving a living wage. There was a time when many jobs were held by
students, students who lived with parents and worked to save some money for
school, or to get a few things for themselves that their parents didn't or
couldn't provide. They weren't working
to survive, but to improve the life they had.
It seems that now everyone expects to live on every job's income. That
is a tremendous change in attitudes toward work.
Why
do people expect more from what were once considered entry level or part-time jobs? Because more and more jobs are being converting to part-time. This is partially due to the government placing more and more
requirements and restrictions on full-time employment positions. Employers can no longer afford full-time employees.
Another point; when wages go up so do taxes, and not just
income tax. There is the Social Security
tax, unemployment taxes, sales taxes on higher priced goods, and other monies
collected by government from businesses. Our government actually has its own motivation
to increase the minimum wage: more tax revenue.
When I was a young man, a student, the minimum wage was
$1.00 per hour. Gas was 25 cents a gallon. A
McDonald's hamburger was 15 cents. A movie ticket was 25 cents. A Saturday
night date might run you five, ten dollars.
You could eat a good lunch for a dollar or less. Tips were small change.
This whole issue isn't about people making more; it's about
people expecting more for less.
