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Raising Minimum Wage Doesn’t Solve Poverty Problem [OPINION]

Albert Einstein
(Photo by Central Press/Getty Images)

The method of setting a floor for compensation has been in place since 1938. Since that time, the fight has been waged for moving that target upward to combat poverty. It brings to mind the Albert Einstein definition of insanity: doing the same thing over and over again and expecting different results.

There are claims that business owners pay workers a minimum wage to selfishly use people for profit. No doubt there are some that do. Those business owners follow that model to their own peril.

Let’s also give some responsibility to the workers as well. If an employee delivers a minimum wage-worthy performance should there be an expectation to receive more?

It is true that about 25% of all workers in the United States make $10 an hour or less. The next question should be why?

In many cases these employees do not have a skill that is worthy of more than the lowest standard. Also the economics of supply and demand are a factor. If anyone can do your job, the business owner can choose from a large pool of prospects to fill that spot.

LeBron James
(Photo by Kevin C. Cox/Getty Images)

For example, there is only one LeBron James and he is compensated accordingly.  He didn’t get there by putting in the minimum amount of work to become a two-time NBA champion.

A smart employer will invest in people who will eventually prove their worth. An equally savvy employee will make money for the boss by doing more than the minimum, but find another place to work if they don’t get paid for their effort.

By waving a wand and magically saying to those at the bottom, “Here is what you are now worth,” changes relationships on multiple levels.

Requiring a higher investment in employees to get the job done eventually leads to increased consumer prices. Business owners need to make a certain percentage on their sales/products/services to stay viable.

If purchasers in the middle-income bracket don’t get a corresponding raise, it’s possible that the market becomes too expensive and the demand goes down. The result is decreased money flow and a distinct possibility that both management and workers feel the pinch.

It’s a false promise that people will be lifted out of poverty just by arbitrarily increasing their wages. Those workers are still only making the minimum.

Let’s encourage people at all levels of business to give more in order to receive the reward. From there we can see if the compensation agreement between employer and employee is proper.

The subject has also gotten people on Facebook talking. Here are some of the comments being posted:

Lacey Gerdes: If minimum wage takes a big hike, so will the price tag on everything. Sounds pointless to me.

Kyle Kuusela: Every other time min wage has gone up so has the price on everything else. If prices of everything does not jump up then yes it will help.

Jessica Sachtjen: Raising it wont do anything when the price of everything else has to go up or has been going up along with it.

Vickie Prusha: No! At this rate I would be better off quitting job I love to start over to be compensated for all the increases over the years! If u raise the minimum wage, current employees should see this adjustment in their wages!

Jayne Zobel: more taxes collected so it does not make a big difference in the long run

Tim Breitkreutz: My neighbor said while running a local paper 10 years ago,he was paying people $10/hr because they needed to live and he wanted them to stay. His friends in the business were crying that they were having start to pay that wage today. Grab the calculator and add up wages from $7.25 for 40 hours, (don’t forget withholdings), and deduct living expenses. Then tell me then how YOU can live on that!

Tanya Smith: Low income workers prob get other assistance. Let me break this down .. Lets say your low income, have 4 in a household. 2adults, 2 children but only one adult is working. Minim wage goes up so now you make too much to qualify for foodstamps and not to mention that maybe your kids health insurance was on spend down or free. Now not only would they have to pay out of pocket but they have to pay for kids. The more you make, the more that goes out.. Americans cant get ahead.

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