Minimum wage debate

 

Show me exactly where, when the minimum wage, set in 1938, was going to be a quote, “living wage?” It doesn’t. $.25/hr was to allow people to survive. My grandfather was one of those on the WPA crews. It didn’t pay much, but it allowed he and his wife to survive and keep pushing for a better life.

Let’s say we raise the minimum wage to $15.00 for remedial entry place positions. How does that affect a person Let’s do a comparison to SF and Dallas. 1 bedroom in SF average $2641.00, Dallas $1256.00 Gross $2,400.00. Better get a roommate in SF because you’re $241.00 short. Perhaps you could live your car to save money. Maybe SF needs to raise it to $30.00/hr?  In Dallas, you fair better. You’ll have $1385.00 left over. How far will that go? Car payment $300.00, Insurance $125.00, utilities $250.00, phone $150.00, food, $400.00. Total $1,225.00. Balance $160.00. Whoops, forgot about gas. Depending on the commute and rising gas prices, just zeroed that out. No money for health, life insurance or investments. No money for childcare, if required, trips or entertainment.  In Dallas, you might survive, in SF you’re screwed unless you can pack two or three roommates in that one bedroom!

Tell me how we survived on $2.15 and hour back in the late 70’s. We pooled resources, lived with friends, sharing costs and continued to improve ourselves. We didn’t settle. We wanted more out of life and weren’t relying on the government to make that happen. When I turned 18 and could work construction, that pay increased to $8.00 an hour which was a Meca! Even at $8.00, budgeting was required, but unlike retail, when the hours swelled to 50, 60 and sometimes, 70 hour weeks, the OT picked up the slack. Instead of $320 gross, it went to $560.00 which was very good money.

If you raise the minimum wage across the country, that will also include the Davis-Bacon Act. Any idea how that will impact construction costs across this country? Yeah, haven’t thought about that. Labor costs will soar along with WC premiums, resulting in fewer jobs being completed because of budget constraints on existing projects. For new projects, get ready for an influx in bond programs because the dollar just won’t go very far. How will the shortfall be addressed? What else, raise taxes. Just what we need.

If you’re in retail, don’t think those fast food companies and retail stores won’t find a way to replace those jobs with automatic tellers. Yeah, they’ll still need employees to stock shelves and receive trucks, but they will do their best to cut costs and increase profits so their shareholders will be happy.

Doubling the minimum wage is not the answer. The largest increases since 1997 has been $.70/hr. That has happened three times. No change since 2009. Is it time for an increase? Yes. Is it time to double it? No. Why? When sellers think customers have more money, don’t think they won’t raise their prices, especially in real-estate and rental properties. Like free agency in sports, they will test the market to assess the worth.

I could provide several examples of people starting at the bottom, but I’ll only use one. One of my former bosses was married and working for Radio Shack. Started as a clerk and wound up managing the store. Life was good until Radio Shack got in trouble. This led to him losing his job and his marriage. He moved back in with his dad. Each day he would look across the street at a construction company. It took him months to suck up his pride, walk across the street and ask for a job. He was in his mid-thirties. They hired him at minimum wage to sweep around the shop. How many today would have the guts to make that move?  While this was a menial job, it was a start. Over time he was given more responsibility and occasional raises-very small. The day they found out he had an electrical background, they put him in charge of message board installation. You know, the ones you see on the highway. Yep, those. Remember, he did not have a construction background, but he pushed himself to learn the ins and outs. Thirty years later he is one of the top managers in a 100 million dollar company. He is also one of the nicest guys I know. Bottom line, his accession wasn’t an easy road, but in the end, he has a modest house, a great wife, wonderful kids and grandkids. Why? Because he worked for it and bettered himself each and every day.     

Mike Rowe has the right idea. You want to make more money, then go out, learn a trade and continue to improve yourself. The golden number of $15.00, is not the end-all, as the press and left keep pushing, to afford the 2000sf, double car garage unit, it will only result in lost jobs and inflation. I don’t think anyone wants that.