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Lost in the discussion about the potential raise in the minimum wage is what impact that will have on people who CURRENTLY make slightly more than the new minimum wage when it is implemented.
Here is what I am talking about:
Current Minimum Wage $7.25 an hour is paid to mostly people with no skills and in retail or fast food.
Semi Skilled person working in a position such as an Office Clerk, Nurses Aide, Receptionist, Cook, factory worker with some skills, etc. (Lets say they currently make $10.25 an hour)
They are paid more than minimum wage because these semi skilled employees have some unique education and talents and the marketplace says they should make more than minimum wage.
OK now, lets say President Obama is successful and get a law passed that will increase the Minimum Wage to $10.00 an hour and now low skilled fast food workers make $10 an hour.
What happens to the semi skilled workers who use to make $3 more than Minimum Wage because they had talents and education? Will their pay go up to $13 an hour?
I will answer your question. IMO some employers will give raises but no where near 3 bucks an hour. Take my employer as a example, they threw everyone in the Obamacare exchange but did employees get any compensation? Nope, they just pocketed the savings. If min wage is raised I expect a 25 cent increase, so far every move my employer has made I have predicted because they are so predictable.
Last edited by Swingblade; 01-17-2014 at 02:05 PM..
So you think poor people shouldn't make more money?
Wow, of course he thinks poor people should make more money. I started out poor, he started out poor, we're all in favor of poor people making more money. This has to be through development and improvement of their own human capital, one by one, so as to be of greater value to the rest of society. An arbitrary law that criminalizes the sale of low-skill labor for its market value will only hurt the poor.
That is between them and their employer, but their pay would not be affected.
Really?
When minimum wage is raised, all boats will expect to raise as well. The bottom up CONtango.
One thing is certain; employers will only hire people with more experience, or automate. There will be less entry level on-the-job training jobs, except for those that are already well above $10, such as construction apprenticeships.
I was hoping someone who understood employee compensation and economics would answer my narrow question directly. So far this has not happened. Instead we got another generic discussion of the pros and cons of an increased minimum wage.
Please! Can someone who understands how employee compensation is set and understands wage economics answer my original question?
Minimum-wage hikes are beneficial to unions. The increases restrict the ability of businesses to hire low-skill workers who might gladly work for lower wages in order to gain experience. Union members thus face less competition from workers who might threaten union jobs.
This view is not speculation. A 2004 study in the Journal of Human Resources by economists William Wascher, Mark Schweitzer and David Neumark determined that lower-wage union workers typically see a boost in employment and earned incomefollowing a mandated wage hike. Never mind the corresponding drop in jobs and earned income for nonunion minimum-wage workers.
They may have been priced out of the jobs they need, but that is not the union’s concern—its members have landed higher wages and reduced competition for jobs.
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