Wednesday, March 31, 2021

Costs and Minimum Wage

 For this next topic, I am taking a few minutes on a break to break down the issues related to minimum wage and costs for both businesses and workers... something I actually know a LOT about from my accounting MBA, work history in both corporate and retail America and paying bills in poverty.

The last time that minimum wage was increased was 2009... 12 years.  In that time, the inflation rate has made something that cost a dollar now cost 1.24... 24 percent increase.  Likewise, a person could rent a 1 bedroom in 2009 for 1064 (that's median across the whole country).  In 2018, it was 1,588.  However... again... minimum wage has not increased AT ALL.  Not only does that mean that it has not increased but the purchasing VALUE of it has decreased.  There is no WONDER we have so many living in poverty.

Meanwhile, businesses do not care.  For the last several years, I have been working as a contractor... both digital and driving.  Driving... there are STILL hours that I will work all hour and make only what I spent in gas and tolls... so NO income.  Online, I'll use Mturk as an example... they offer tasks to do that take a half hour and pay 50 cent for it...if you work at thousand tasks at it, you can get the tasks that work out to 7 per hour, assuming you were able to immediately follow task with task and so on.  These are not small unnamed payers..... they are ivy league schools, news network, political campaigns, and busineses that figured out how to get work done and not have to pay employers taxes, not have to pay reasonable rate, and not have to give benefits.  If business is going to pay the least possible for their labor, SOMEONE has to monitor that, and that's where the labor laws come into play, even though they have not been kept up to date to protect contractors, as well.

Businesses rightly say that a sudden increase in minimum wage would make it hard to operate.  A sudden increase in labor costs means less budget for operating, and stores could close or people be laid off.  And, even the Biden administration doesn't want that.

But.... why not offer a years long subidy for it?  We have now spent a YEAR of paying literally TRILLIONS out to businesses.. specifically for labor costs, and checks to individuals.  Why is it unrealistic to pay a government subsidy on the labor costs so businesses don't pay it, till the incomes of ALL families increase and can pay for more goods and the increased incomes of business in sales can sustain a continued wage?  There is no risk to anyone, and if the government believes this will raise ALL sales, it can afford the debt for the program... or was that not the case when the government paid out stimulus and is still doing it?


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