Minimum wage requirements did not originate in this country but
rather in Australia. One could quarrel that they were even minimum wages but it
was evident that some factories just didn’t pay their employees well; no
surprise. So, in Victoria in 1894 an amendment to the Factories Act created
wage boards to set basic wages for 6 industries that were know for low wages.
Winston Churchill brought this concept to England with the Trade Boards Act in
1909. In our country minimum wages were first set in 1938 with some states
doing so earlier.
Today Norway, Sweden, Finland, Denmark, Switzerland, Germany, Italy
and Cyprus do not have minimum wage laws. What they rely upon to provide
appropriate wages for workers are trade unions. As we know, our own unions have
decreased in size and power dramatically over recent years. Thus, we turn to
minimum wages.
But the basic ideas of these processes are clear; to provide
appropriate and adequate compensation for workers or to balance power and
influence between labor and management as well as stockholders.
These programs are aimed primarily at large corporations, which
employ a sizeable work force. Thus in country minimum wage laws only deal with
companies dealing with interstate commerce, except in those states that have
enacted their own minimum wage laws. This is contrast to welfare programs, and
there is no reason for it to “means tested.”
Small businesses or “Mom and Pop” businesses as some like to call
them are not affected unless they are involved in interstate commerce and
therefore much compete in a larger market.
A comment from a previous article points out that the minimum wage
only affects 3% of workers according to the Bureau of Labor Statistics. A small
group but if you are part of them, they are important. To see who is covered
you can check here: www.dol.gov/compliance/guide/minwage.htm.
We keep coming back to the vast inequity of wealth that has grown
in this country over the last three decades where the power of the wealthy and
large corporations have outweighed their union counterparts. In my previous
article I pointed out that despite conservative claims that this will cause
unemployment the contrast is true, giving the folk who spend money, more money
to spend helps the economy and stimulates employment.
What we seek in a democracy is a level playing field for all
citizens. We certainly lack that now.
I am familiar with a few minimum wage folk; single mothers, newly employed HS grads, part-time, etc. These people struggle and rely on local gov't for medicaid, food assistance and other taxpayer funded aid. Just from a pragmatic
ReplyDeletestandpoint, their work should be of some value..enough so that their hours produce enough money to permit some of the basics that
are otherwise provided by the community. The counter-argument is that any pay hike will result in them losing their job: the business
cannot afford it. Perhaps the business then also
should lose its job? For the taxpayers are supporting that business as well, by augmenting
worker pay.
"Small businesses or “Mom and Pop” businesses as some like to call them are not affected"
ReplyDeleteI've worked in those. And they were affected.
BB asked: " Perhaps the business then also
should lose its job?"
Not for wanting to pay a fair wage.
I find BB-Idaho's comment clear and succinct and agree with them. If the government provided subsidies and incentives to Mom and Pop stores they do to major corporations and banks, they might have a better chance of survival, but they can't afford the lobbyists to get these sweetheart deals.
ReplyDeletedmarks how do you define fair wage, living wage, or are these concepts just irrelevant to you?
I think I wrote an article before on Cabelas, Gander Mountain, and a local sporting goods store about how Cabelas demanded tax breaks to be willing to build a store in a community (think it was in Oklahoma), Gander Mountain refused the tax breaks as being unfair; and the local store which provided the same products as Cabelas at cheaper prices was driven out of business because of the tax breaks.
Hugh: A fair wage is one that is the real value, as determined by the payer and the earner. They determine what is fair. They are the only ones who know; no outsider does. Any outsider's conjecture or imposition on this is entirely ignorant, and often destructive.
ReplyDeleteI don't use the living wage term because it is meaningless, really. What is a living to one person isn't to another. A living wage for a 17 year old barrista from a middle class family is probably $0 per hour. For a single mother with 3 kids, one of whom has special needs, it might be $30 an hour. Any attempt to define one single value as a living wage fails completely.
As for relevance, I am full aware of what the fair value is, but the living wage idea isn't relevant because of its nebulousness and meaninglessness.
"...about how Cabelas demanded tax breaks..."
I hardly blame Cabelas for wanting less of their own property forcibly taken from them.
"...and the local store ..."
The real lesson here is the punitive taxation which discourages all businesses from locating where the tax rates are high, and wears them down and makes them go out of business. All businesses should be able to keep more of their own property (and thus employ more people), without having to beg and beg to be stolen from less.
Imagine if the Oklahoma community had said fine, and lowered the taxes for all businesses.
Ah dmarks, sometimes think your twisted. Your language is just not very clear to me. I assume the “real value” you talk about is in the perfect world of supply and demand in capitalism, which is good in theory but never works out that way; even Adam Smith knew that. A living wage is very important for those who don’t make one; given it may vary from place to place with varying costs of living, but the concept is important; again to provide food, shelter and clothing plus.
DeleteAs for Cabelas, they were obviously seeking an unfair advantage over competitors. The local business was doing just fine until they changed the playing field which Gander Mountain accepted. Even given that corporate taxes are essentially pass through taxes, they still need to be fair and equal for all businesses. You defend Mom and Pop stores and then show no support for them with the strange logic.
'They are the only ones who know; no outsider does.' Sometimes..we know that Ken Lay got $42.4 million in compensation in 1999. I did not know what a young forklift
ReplyDeletedriver made, but it amounted to $0 after he was terminated on the spot for refusing to work a third straight 8 hour shift while his wife was having a baby. And of course we all know folks who in our opinion are 'overpaid/underpaid'.
In my 40 years in the private sector that applied from the
lowest scale to the top gun. Overpayment at the topgun scale
is of course far more wasteful than that for the opportunities unlimited fellow cleaning the parking lot.
(just ask Ken Lay)
Another analysis offers some
ReplyDeleteinsight.
Refreshing piece of clarity. Guess I'll have to add another site to my home page.
DeleteI don't know all the details, but ENRON was quite corrupt and cut a lot of corners. He was like a mafia boss in that way. Not the same as a company that plays by all the rules... and the CEO still earns a high amount.
ReplyDelete"... after he was terminated on the spot..."
I already expressed my support for the FMLA earlier. I am all for mandates to treat workers fairly like this. But not to set values that the person setting the value has no idea what anything really is.
It's like I support food contamination regulations, so that the milk is not dangerous. But I don't want the government setting the price of milk. There's a huge difference.
The effects of minimum wage on business are interesting. Walmart built a new store here in Idaho some 10 years ago.
ReplyDeleteOur minium wage is $7.25. Then, 4 years ago, they closed the
Walmart and rebuilt a super Walmart across the river in Washington. The Washington wage is $9.19. The rationale
definitely was not labor savings! The Washington sales tax is 0.5% higher, so Walmart's goods cost more. I'm sure that WM did a study, but the logic escapes me. (as does the logic of paying taxes on a huge empty abandoned store). To top it off, Walmart left a state with median property taxes at 0.69% to one with 0.92%. [I'm assuming they cut a super secret Cabela deal] A local franchise chain of restaurants, with stores in both states here, pays the Washington $9.19 in both states. Knowing the owner, it is
not because of attracting interstate labor: he relies on top
notch workers and pays them accordingly.
"the power of the wealthy and large corporations have outweighed their union counterparts"
ReplyDeleteMissing from this is any concern over the balance of power between workers and unions. Until this year, the unions have bullied and stolen massive amounts from working people in Michigan. Now the balance is turned more in favor of the workers thanks to "right to work".
Congratulations to Michigan!
ReplyDeleteWe have had Right To Work for 28 years now, and
we are dead last in median per individual income. I assume that is really really good for the poor picked on corporations, but
our young are moving out in droves.
And BB, what is wrong with Idaho? Surely not right to work. North Dakota and Virginia are tops in personal income... and also are right to work statesm
DeleteBB said: "We have had Right To Work for 28 years now, and we are dead last in median per individual income."
DeleteThis deserves further scrutiny. Check this link [indicatorsnorthwest.org]
and you will see Idaho lagging behind without any radical change since 1972. Right-to-work there was passed in 1985, and around this time, instead of falling further back, the Idaho "line" kept pace with the rest of the US.
Michigan, before right to work, under Granholm"s union-friendly and worker-hostile "lost decade", had far many more people moving out in droves: it was the only state to lose population in that decade, the 2010's, according to the US Census. Not Idaho.
ReplyDeleteRight-to-work is good for poor picked-on workers, and that is the issue (nothing to do with corporations). It gives people who would otherwise be forced into unions a yearly raise of hundreds or thousands because they no longer have to pay union dues which really pretty much go to political campaigns and partisan causes.