There has been a lot of talk about minimum wage laws coming out of the federal government lately. The proponents say that all companies must increase the pay they provide their minimum wage employees. There is no perspective given as to what these laws will do to those employees and the employers who must pay these new wages.
Some states, those entities that are the closest to the people, have larger rates than the federal wage floor of about seven dollars an hour. This occurred with only a small increase in the unemployment rate. When the federal government mandated the seven dollar an hour rate, the unemployment rate spiked because it applied to all people, everywhere. Now they want to take it to over 10 dollars an hour.
The problem with a one size fits all approach to a pay scale that affects less than four percent of the population is that one size rarely fits all in the first place. When an employers payroll expense, the largest part of their expenses, is arbitrarily increased, something else has to give way. This is usually accomplished by not hiring as many people or lowering other perks for those already employed.
Legislators, working in Washington, DC, do not have payrolls for which they must be responsible. Many of them never have and do not understand how raising all employee expenses, for any company, impacts their ability to be flexible. All of this nanny state interference comes from the belief that all private companies have slush funds that they can dip into whenever new taxes are imposed.
By discriminating teenagers from being hired, the new rate will have employers looking for older, more experienced workers. These potential employees provide more value than a new person getting started. The new wages that would be set by Federal authorities do not take any input from these businesses. This is because this input is counterproductive to their ideas about how the market should run regardless of how it actually does work.
When the minimum pay for a new person is arbitrarily raised to be at or above the supervisors pay, there are internal problems with employee morale. They will have to be raised in order to provide the pay difference which will further deplete any retained earnings and future growth plans will be put aside. Every other position, above them, will have to have adjustments made and it can become complicated and expensive quite quickly.
One of the biggest problems with a new federal law dealing with the establishment of new minimum wages is that it does nothing for production. Minimum wage people begin that way and only stay at this level for a very short time. They either become more valuable and gain raises, naturally, or they do not produce and are let go. With a higher required pay to begin with, a raise will come much later and firings will be sooner.
The largest discrimination has to do with who this type of law hurts and who it helps. Most union contracts base all of their step increases for their members on the minimum wage. Arbitrarily raising them will give the unions all the ammunition they need to further tie up other companies and support the politicians who vote for these mandates.
Some states, those entities that are the closest to the people, have larger rates than the federal wage floor of about seven dollars an hour. This occurred with only a small increase in the unemployment rate. When the federal government mandated the seven dollar an hour rate, the unemployment rate spiked because it applied to all people, everywhere. Now they want to take it to over 10 dollars an hour.
The problem with a one size fits all approach to a pay scale that affects less than four percent of the population is that one size rarely fits all in the first place. When an employers payroll expense, the largest part of their expenses, is arbitrarily increased, something else has to give way. This is usually accomplished by not hiring as many people or lowering other perks for those already employed.
Legislators, working in Washington, DC, do not have payrolls for which they must be responsible. Many of them never have and do not understand how raising all employee expenses, for any company, impacts their ability to be flexible. All of this nanny state interference comes from the belief that all private companies have slush funds that they can dip into whenever new taxes are imposed.
By discriminating teenagers from being hired, the new rate will have employers looking for older, more experienced workers. These potential employees provide more value than a new person getting started. The new wages that would be set by Federal authorities do not take any input from these businesses. This is because this input is counterproductive to their ideas about how the market should run regardless of how it actually does work.
When the minimum pay for a new person is arbitrarily raised to be at or above the supervisors pay, there are internal problems with employee morale. They will have to be raised in order to provide the pay difference which will further deplete any retained earnings and future growth plans will be put aside. Every other position, above them, will have to have adjustments made and it can become complicated and expensive quite quickly.
One of the biggest problems with a new federal law dealing with the establishment of new minimum wages is that it does nothing for production. Minimum wage people begin that way and only stay at this level for a very short time. They either become more valuable and gain raises, naturally, or they do not produce and are let go. With a higher required pay to begin with, a raise will come much later and firings will be sooner.
The largest discrimination has to do with who this type of law hurts and who it helps. Most union contracts base all of their step increases for their members on the minimum wage. Arbitrarily raising them will give the unions all the ammunition they need to further tie up other companies and support the politicians who vote for these mandates.
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