Minimum wage laws, currently the latest debate in Washington, DC to distract everyone from the horrors of Obamacare, interfere with free market concepts and activities. The one size fits all approach to meddling in the private enterprise disrupts the free flow of capital. Without perspective, the mandate will negatively impact not just the employers who must pay the new wage, but also the potential employees and others already employed.
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.
A new, mandatory, pay rate will influence the expenses of each business affected in a discriminatory way. The payroll expenses will go up and that means other things will have to go down. Arbitrary increases of this kind will make the almost four percent of employees affected, almost not worth the extra pay for a variety of reasons. Not the least of which is the fact that one size fits all programs rarely fit all or even most.
Payroll based expenses, such as Medicare, Social Security and unemployment insurance as well as employee accidental injury insurance are raised every time a raise occurs. The US Congress and Senate do not truly understand this as they have no payroll to deal with. Most companies do not have a slush fund that can be dipped into, like the representatives do, to fill in when costs increase.
These types of arbitrary laws discriminate against the teenager, just getting into the work force, preventing them from being hired. As these new comers do not have much training or experience, they are not valued as being worth the newer pay rates. This makes employers look for the older, more experienced workers and not someone that does not have a lengthy resume.
Raising the starting pay for new employees to somewhere closer to their supervisors pay creates problems with employee morale. This person will have to be given a raise, which raises all of the associated expenses as well. All other personnel will have to be reviewed in order to ensure salary separation for the various duties, titles and positions. This further interferes with the market as future expansions, additional business locations and other growth activities will have to be put on hold.
A very large concern about any new minimum wage mandate is that there is no automatic increase in production as a free market will require for the extra costs. The vast majority of minimum pay personnel starts there and rarely stays there. They gain experience and additional training and move up the ladder. If they can accept additional duties and responsibilities, they are given raises. If they are not able to become more valuable, they are let go.
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.
A new, mandatory, pay rate will influence the expenses of each business affected in a discriminatory way. The payroll expenses will go up and that means other things will have to go down. Arbitrary increases of this kind will make the almost four percent of employees affected, almost not worth the extra pay for a variety of reasons. Not the least of which is the fact that one size fits all programs rarely fit all or even most.
Payroll based expenses, such as Medicare, Social Security and unemployment insurance as well as employee accidental injury insurance are raised every time a raise occurs. The US Congress and Senate do not truly understand this as they have no payroll to deal with. Most companies do not have a slush fund that can be dipped into, like the representatives do, to fill in when costs increase.
These types of arbitrary laws discriminate against the teenager, just getting into the work force, preventing them from being hired. As these new comers do not have much training or experience, they are not valued as being worth the newer pay rates. This makes employers look for the older, more experienced workers and not someone that does not have a lengthy resume.
Raising the starting pay for new employees to somewhere closer to their supervisors pay creates problems with employee morale. This person will have to be given a raise, which raises all of the associated expenses as well. All other personnel will have to be reviewed in order to ensure salary separation for the various duties, titles and positions. This further interferes with the market as future expansions, additional business locations and other growth activities will have to be put on hold.
A very large concern about any new minimum wage mandate is that there is no automatic increase in production as a free market will require for the extra costs. The vast majority of minimum pay personnel starts there and rarely stays there. They gain experience and additional training and move up the ladder. If they can accept additional duties and responsibilities, they are given raises. If they are not able to become more valuable, they are let go.
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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