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Wednesday, February 13, 2013

The Need for a Two-Tiered Minimum Wage

We at A&G didn't bother to watch President Obama's State of the Union last night..

It was nothing personal, just.. well, what is he going to say other than its 'good' or 'strong' or some other complimentary adjective.

And to the masses of people who get their news from Twitter, who see Dow 14,000 and a multitude of statistical card tricks being played about as 'recovery', how could the common throng of the clueless think any different.

One proposal the President did mention last night which we found addressed in a news article this morning and got our interest, involved possibly increasing the minimum wage from $7.25 where it is currently to $9/hr.
From AP:  "White House officials say the move is aimed at addressing poverty and helping low-income Americans.  But the proposal likely will be opposed by Republicans and business groups, which have traditionally said raising the minimum wage discourages companies from hiring low-skilled workers.

Mr. Obama's proposal would raise the minimum wage by 2015 in several stages. After that, there would be an annual increase pegged to inflation. "

According to the Bureau of Labor Statistics, in 2011, 1.7 million workers earned exactly the prevailing Federal minimum wage of $7.25 per hour.  This represents 2.5% of all those in the US work force...

The notion that companies will hire less and jobs will be killed as a result of minimum wage going up is not true.

No corporation is going to spite their nose to save their face --  If its profitable for a company to expand its workforce in order to manufacture, distribute or sell its products or services, it will do so and simply try to sneakily defray the costs to the consumer or receive larger tax breaks.
So what does it mean to have a legal minimum wage?

Bluntly it means this-- if corporations could, they would offer low skilled work positions at salaries that are fractions of what they pay out now... $5/hr.. $2/hr...  maybe $1/day like in 3rd world nations..

And you best believe it-- if allowed, the corporations could easily find a work pool of people who would happily accept less than minimum wage.

Examples include people with little to no education desperate for any legal income, those needing any first job to help them get experience for other jobs, people seeking a 2nd or 3rd job, the elderly or retired simply looking to alleviate boredom and salary is secondary, etc..

And from that, you essentially have a bidding war among the uneducated and unskilled to see how low a wage will they accept..  And the corporate fat cats overwhelmed with joy..

But whether Obama's proposal passes or not, its really just a skipping stone ripple among a much larger pond.  Any chance this nation has to survive as we all know it and remember it growing up, depends upon the middle class, and specifically those entering the work force to acquire middle-class level salaries.

What really should be occurring is a two-tier minimum wage.  One for unskilled ($9/hr) and one for skilled i.e. college educated ($15/hr i.e. $31,200/yr.

People can debate the practicalities and realities of such a plan being implemented, but considering the average degree acquiring college graduate leaves with over $30k in debt as he/she turns 21, that person needs at minimum a $15/hr job to repay the loans, live for the present have have even a couple dollars left over to save for a future.

Because if there's little to no chance of a college educated person making a sincere income to start out, what's the point of even attending college?   Wal Mart and Target will still hire you if you're a high-school graduate to stock their shelves...

We'll end this post with a personal experience.. One that we're sure many, many out there have dealt with at some point in their professional lives.

So many many moons ago, yours truly was at a job interview, and all was going smashingly..  The prospective employer liked what I had to say about his company, and he was impressed with my work ethic, prior experiences, attitude, etc...

But he noticed on the job application under salary demands, I left it blank.

He asked me about it.. what salary did I seek?  I explained it didn't matter what I sought.. What mattered was what he wished to pay since if he had in his mind $8/hr and I had $50/hr, guess who wins that argument?

So after some hemming and hawing on my part, I stated a salary demand.  Sarcastically, I said I would accept $1/hr.
~ Every employee's dream-- private time w their boss

He looked at me with annoyance and said something to the effect of  'Be serious..I can't pay you below minimum wage... Just tell me your salary demand'

I then said with a smile, "Yes but I'm sure you'd like to if you could".. I received a very small grin in return..

Then I stated the truth.. I wanted "X" per hour as my salary... The reply I received was.. "No sorry, that's a bit too much.. We pay "Y"

By this point I was quite irate and for better or worse my temper got the best of me.. I exclaimed 'Did you really need to be a bastard about this?  Couldn't you honestly say the salary was 'Y' per hour without the games??
Needless to say the interview ended instantly and with both of us feeling ill will toward the other..

But as you can tell, I certainly had no regrets calling the guy out then and absolutely none presently..

Corporations/companies are Evil.. they simply are.  If they could get away with hiring you for 5 cents an hour, 12hrs a day and with zero benefits they would happily do so and know they could find someone desperate if patient enough.

The only thing preventing them are laws making such actions illegal.

To save the American worker from continually collapsing salaries and a greater dependence upon debt i.e. credit cards to make up the difference, there needs to be a two-tiered Minimum Wage... for both the unskilled and college educated.