Sunday, July 15, 2007

Who Benefits From Minimum Wage Increase?

My daughter works at a local pizza place. A few weeks ago they put into effect new (higher) prices. Many other pizza places in the area did the same, as did, I am sure, most restaurants. Interestingly, these price increases coincide with the increase in minimum wage which took effect July 1. This makes me anyone better off because of the minimum wage increase? I can tell you that I, for one, am not. My salary is not tied to the minimum wage so it does not change when the minimum wage does. The businesses are neither better nor worse off. They simply pass on the increased costs to the consumer. That is one thing I hate about capitalism. It is always the consumer who has to absorb increased costs. I cannot have my wages increased just because the prices I pay for things has gone up. So it is always me, the consumer, that gets screwed every time. The minimum-wage workers are probably no better off either. They get paid more, but they have to turn around and pay more for things that now cost more because of their own wage increase.

So does anyone really benefit? Wait! I think I know! Its the GOVERNMENT that benefits! They can collect more tax on the higher wages and also on the higher prices. They benefit both ways! Imagine that! the government enacting policy that benefits no one except themselves!

So Sayeth The Shack

1 comment:

Jeni said...

While I do understand fully your complaint about businesses passing along the increase in minimum wage to consumers and your salary not being tied to minimum wage, think about that for a minute. True, minimum wage and your wage are not tied together but most of the time, your employer may offer a few crumbs of a raise to you over the years - like say the past ten years at any rate. Whereas those who work at positions paying only minimum wage rarely are given an increase unless the employer is forced into doing it by it being passed into a law that those wages are brought up to a new, slightly higher level.

Are either of these processes fair? Hell no! We both know your knowledge, you abilities in your chosen field, the time you put into your work on the job, all make your efforts worth much more than you currently earn. But, people groveling along, doing what is often the "grunt" work for society also deserve a little more income too along the way.

However, each business also faces many of the same rising costs as we, the consumer face too - utility bills, higher fuel prices -and yes, along with that, higher labor prices and they still have to maintain a profit for themselves to live on and enough to be able to afford to still employ adequate staffing to peddle said product to the consumer after the fact.

Is there a happy medium here? Most likely not to everyone's satisfaction for sure. I know I have no answer for the dilemma although inevitably all of us have to "suck it up" one way or another. Either we stop spending as much as before, or the providers of goods/services ceases to provide some services or just folds up completely. Tough call from any perspective there though isn't it?