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What Should Be The Minimum Wage?

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1.What Should Be The Minimum Wage?
Photo credit: Diana Beideman / Flickr

High unemployment has caused politicians to use the minimum wage for political leverage against opponents. The definition of the minimum wage has been lost in the argument. Business owners pay starting wages to people with few marketable skills. Within a few months, an increase in the hourly wage is paid to employees who embrace the job. No one is supposed to be able to support a family on the minimum wage.

Minimum Wage Should Be Set By the Market

The employers within a market and locality should set adequate wages for work where competition for qualified workers exists. Mandating the minimum wage “kicks the bottom rungs out from under the ladder of success.” This statement was made when Walter E. Williams explained the importance of paying acceptable hourly wages for work performed. Employees can advance as skills are gained, and new jobs accepted.

Elimination of the Minimum Wage

More jobs could be created, if employers had discretion to price each job at the market rates. Employees would be paid during the time that skills are developing. Low-skilled workers, such as teenagers, college students and part-time workers, would be included in the workforce. Entry-level jobs are essential for startup companies with the need to develop a workforce over time.

Lower Wages Retain American Jobs

Minimum wage increases put pressure on employers to find another source of “cheap” labor. In many instances, overseas workers will work for much less money than the current minimum wage. Work performed here in the United States includes employment taxes, and standard benefits that cause employers to make decisions against hiring workers.

Charitable Organizations Suffer

Standard minimum wage rates for everyone costs charitable organizations valuable funds for simple tasks. Volunteers become more essential since the charity must have work performed without paying employees more than a job is worth. Jobs are not created in charitable organizations when the minimum wage rises.

Entry-Level Jobs Are Necessary

Millions of entry-level jobs have disappeared because the minimum wage is above the value of such jobs. Multiple roles are included in jobs that pay higher wages. Hourly wages are intended to compensate the worker for tasks that have a specific value in the marketplace. Overpaying for the job does not force an employer to comply. Instead, the job is eliminated entirely.

Small Businesses Will Close

Labor rates can drive small businesses to close instead of hiring workers who would benefit from part-time, entry-level work. Small businesses require a wide spectrum of tasks that could develop employees into effective workers in the future. Strict minimum wage rules place affordable labor out of reach during the initial business stages.

Cost of Living Varies

Workers earning minimum wage in New York state should be paid more than those performing comparable work in Montana. Again, no one is expected to remain on minimum wage for the duration. Hard work and the willingness to develop new skills allow the employer to justify pay increases. A few months at minimum wage leads to possibilities where the worker becomes more marketable and earns more money.

American Workers Win

Illegal workers are paid lower wages “under the table” because the minimum wage is above the actual market value of the skills required. American workers would accept these jobs if the wage paid were fair and advancement was possible. Without a mandated minimum wage, American companies would hire the employee that fits the job and build skills in each worker. Millions of jobs would be created if American businesses were allowed to set appropriate wage rates based on the actual value of the work to be performed.

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