Ways a $10 Minimum Wage Would Help Employees

The current Federal minimum wage is $7.25 an hour, but president Obama is hoping to change that. Obama announced that he will make an executive order to raise the minimum wage for contract workers to $10.10 an hour. While this move is likely to only affect roughly half a million workers, he hopes that this will encourage congress to make the $10.10 minimum wage applicable for everyone.

Although there are some businesses and government officials against raising the minimum wage, there are a number of reasons why it would be a good idea, especially as it concerns minimum wage workers. Below are a number of reasons why a higher minimum wage would be a benefit, especially for low-income workers.

More Income

The biggest impact a $10 minimum wage would have on minimum wage employees is providing them with more income on a weekly basis. For someone who’s making a low wage already, even the smallest increase helps. A large percentage of low wage workers are employed by major corporations such as retail chains or fast food restaurants and those corporations wouldn’t be too severely impacted by an increase in the minimum wage.

Lower Poverty Rates

Severalstudies have been done that state that raising the minimum wage to $10 would lift almost half of the working poor out of poverty. While $10 is still not a very high hourly wage, it would go a long way for people who are currently making the current minimum wage. Money and low wages are one of the biggest influences of poverty, so this can be a good start to improving income inequality in the country.

Less Dependence on Government Assistance

A higher wage means less dependence on government assistance. Many minimum wage employees supporting themselves or their families on low wages rely on additional government assistance in order to survive. Having a higher wage means that they might not have to rely so much on government assistance.

Help Close the Wage Gap

It’s no secret that there’s a minority and gender wage gap that exists in this country. Studies have shown that a large percentage of minimum wage employees are female or minority workers, and raising the minimum wage to $10 would at least bridge that gap somewhat. While it will be awhile before the wage gap is completely bridged, raising the minimum wage would help those employees who are negatively impacted by the current minimum wage.

Boost the Economy

Many businesses and employers are hesitant to support a higher minimum wage, but raising it would help boost the economy. A higher income means will allow people to spend more money. More income means more spending which means an increase in the production of goods and services.

More Ability to Save

As with any situation where people enter into a higher income bracket, there’s a better chance of being able to save money and create an emergency fund. While $10/hour is still not enough to make anyone completely financially stable, it may allow someone living on a minimum wage to save a bit more than they previously were able to save. In addition, those who are earning as a side income such as teenagers or part-time workers, this is a great way for them to save more money.

Fewer Financial Difficulties

As previously stated, $10/hour is still pretty low in terms of income, as it only amounts to $400/week and $19,000/year for full-time workers. However, for someone who was making less than that, they may now be able to cover certain financial difficulties they previously were unable to on their own before.

More Access

One of the first things to go when you’re scraping by are paying for certain items that you know you need, but are unable to afford. Whether it’s a trip to the doctor’s office, paying the electricity bill or buying healthier groceries, even a small income increase can help. Increasing the minimum wage will help provide employees better access to the things that they need.

Reduces Job Turnover

Raising the minimum wage is also said to reduce job turnover, meaning that people are more likely to stay in one job than jumping from job to job. Going from job to job tends to put a strain on finances, so less turnover can be seen as a benefit of increasing the minimum wage both for employees and employers.

10 Responses to Ways a $10 Minimum Wage Would Help Employees

Second, the extra funds will come from either higher prices or a reduced workforce. Business owners must make a profit to stay in business. If their margins are reduced by artificially set wages by an external party to their business, that will be passed onto the consumer or jobs will be cut.

While listing all of the reasons this is a good idea, you seem to have overlooked some relevant facts.

Have you heard of supply and demand? It is an economic law which tells us some things about prices. When supply is constant and demand increases, prices also increase. Oops. There goes that utopian ideal of lifting the poor out of poverty by raising everyone’s wage.

You state “A large percentage of low wage workers are employed by major corporations such as retail chains or fast food restaurants and those corporations wouldnâ€™t be too severely impacted by an increase in the minimum wage.”

This is extremely naive. Corporations in fact don’t take hits to their bottom line passively. They react. They figure out how to minimize a 25% increase in labor costs. How will they do this? An obvious way is to cut back on labor hours. Another obvious way is to expect more skills from the workers they do hire. Both strategies have a negative impact on the very workers who are hoping to benefit from a minimum wage increase.

The solution to poverty is for the individual to gain skills which are in demand. Skills which are in demand command higher wages in the marketplace.

Paying workers according to their need rather than according to their value is a Marxist ideal. If we want to know how it works in practice, all we have to do is take a look at the economic history of Russia.

I am all for a minimum wage, as true capitalism would result in starvation for the unskilled worker. But trying to legislate wealth into existance by setting a minimum wage high enough to provide a middle class life for all is futile; it cannot be done.

The problem is that we are rapidly approaching the point where machines will do everything from cleaning floors to brain surgery to self programing computers. Wages are going to drop for everyone, because we can all be replaced by a robot. Raising the minimum wage will only accelerate automation. We need something totally different. The billion dollar question is what that something is.

I have a novel idea. Maybe instead of making up the shortfall generated by increasing minimum wage workers’ income by increasing prices or cutting labor hours, maybe we should look at the disparity in incomes that are already in existence and reduce them somewhat? Have the upper management of these companies, who all make hundreds of thousands (if not millions!) of dollars a year, take a pay cut. There is no earthly reason why ANYONE should be earning millions of dollars each year when others are making $8 dollars an hour at an honest job. And as for the person who said that the minimum wage workers should simply train and study to prepare themselves for more highly skilled (and better paying) jobs, do you realize that not everyone has the brain power to do this? Does that mean that they do not deserve to make a sustaining salary on a more menial (but still necessary!) job??

Yes, of course I realize that mentally challenged individuals exist. I hope you aren’t trying to imply that the vast majority of those earning minimum wage aren’t intelligent enough to do any better. That is definitely not the case.

My point isn’t just about the mentally challenged people deserving to earn a decent living for working an honest 40 hrs. It is for all of us, and, as I mentioned above, that the disparity between the earnings of a CEO, a VP, an A list actor, a sports figure, etc; all of which earn between 200k-200 million a year, and for what? who is to say that the A list actor deserves to live a life of luxury while others, who are also putting in a hard day’s work, cannot make ends meet? Anyone willing to work an honest 40 hours, no matter what the job, how menial, etc. should be able to receive a compensation that will allow them at least a lower middle class standard of living. This benefits ALL of us, not just the minimum wagers.

Sure, it’s a nice idea. The problem is that it doesn’t work in practice. You don’t eliminate the lower class by raising the minimum wage, you merely move the dividing line between lower class and middle class higher. At the end of the day, you still have a lower class.

If your theory worked, we could eliminate poverty by having the US Mint print money for everyone. Will that work? Just print, say, 5 million dollars for every man, woman, and child in the US and distribute it. Would doing so eliminate poverty? What do you think?

You mention the earnings of CEOs, sports figures, and A list actors and then refer to them “deserving” (or not) their salaries. “Deserving” has nothing to do with their salaries.

A movie studio doesn’t pay Tom Cruise a fortune to be in a new movie because he “deserves” it, they do it because people will pay to see his movies, and that in turn makes money for the movie studio. Their motive is profit, they aren’t interested in who deserves what. Since no one will pay a cent to see a movie starring Petunia 100, I will not be offered any movie contracts at any price.

Winning sports teams are big business, and that is why excellent athletes are offered high paying contracts. When they are past their prime, the sports team is done with them. It’s not that they don’t “deserve” a good salary, it’s that they no longer contribute to the team winning. The owners want the team to win, and so they recruit the very best players that they can. Other team owners are simultaneously doing the same thing. Since there are a limited number of excellent athletes available to be recruited, the price goes up.

CEOs have very specialized skills. Large corporations need those skills to be profitable. They aren’t profitable just by chance, they require good managment. Good CEOs command high salaries because the shareholders (owners) want the corporation to be profitable. And because, there is a very limited number of workers who possess the skills to successfully pilot a large corporation.

On the other end of the wage spectrum, suppose I am a worker who pours sodas into a cup at the movie theatre. This is a job requiring no specialized skills and likely pays minimum wage or close to it. If that is my job, how can I distinguish myself to be worth higher wages? Can I pour sodas in such a way that they taste superior to other cups of soda? Will customers begin to request me specifically to pour their soda? Will customers make special trips to the movie theatre to purchase soda I have poured? If so, then I can begin to demand higher wages, and I will get them. However, if the soda I pour is no better or worse than the soda anyone else pours, I will not be able to command higher wages. I have no special skills to offer.

There is a saying here in England – it is worth what it will fetch. It may be galling that what you say is true, there are sports ‘stars’ and celebrities who earn mountains of money. There are the risk taking bankers who get huge bonuses and all the rest of it. However, someone is prepared to give them that money for what they do. Clearly someone thinks they are worth it. No one can or will try to change that.