posted on Nov, 6 2014 @ 01:04 PM
So, lets have a hypothetical business creating iWidgets. Those iWidgets are the latest fad, and EVERYONE wants not 1 but several. The business owner
needs to produce as many iWidgets as possible since there is no guarantee that this fad will last beyond next week. But, not only produce them but
advertise, sell, manage the stock, ship them, process returns, handle customer support, etc.... Every one of those positions require a set of skill
sand qualifications.
For example (a few of the roles needed to run a business, but definitely not ALL):
- Assembly line worker: Common-sense skills, no college degree needed, assembling prefabricated components produced in an offshore facility (due to
lowest material cost)
- Advertising Manager/Associate: Specialized skills, usually a college degree position
- Sales Manager/Associate: Specialized skills, usually a college degree position
- Stock/Shipping Manager: Specialized skills, no college degree required
- Stock/Shipping Associate: Common-sense skills, no college degree needed, moving and shipping the packaged stock
- Customer Support Manager/Associate: Some specialized skills, no college degree required
So, looking at each of these with the view of the number of employees needed and the salary equivalents might be:
Several employees needed with specialized skills and perhaps a college degree, less available (~ 4-8 employees)
- Advertising Manager/Associate (5X)
- Sales Manager/Associate: Several employees needed (4X)
- Customer Support Manager/Associate: Several employees needed (3X)
Many employees needed with varying skills, mostly common-sense skills that are widely available (~ 20+ employees)
- Stock/Shipping Associate (1.5X)
- Assembly line worker (X)
If the base pay is X/hr, and increases based upon skill or education level. As you ca see, the majority of the employees make less than 2X here. So,
if you want to set a minimum wage of $8.00/hr, then the most expensive employee is being paid $40.00/hr, and those you want to have as few as possible
to be competitive. However, if you raise the minimum wage for the lowest paid employees to $10.00/hr, then that has a ripple effect of now the highest
paid employees (the one's with the most skills and least available in the market) will now want to make $50.00/hr. If that is the case, your
expenses are rising, so you need to cut costs. Where to cut? Where does a cut have the least impact to a business? Most likely it is in the largest
number of workers in an area, like the stock room. S0, you layoff 1/5 of that workforce (~5 people).
The raising of the minimum wage now only supports keeping 15 people on-staff instead of the 20 people before. So, 5 families are negatively affected
by that change that was supposed to help them?
I don't see it helping, only driving costs higher. Another option is to offshore ALL of the manufacturing (all the assembly work) to a country that
provides a more cost-effective price while maintaining the remainder of the employees at their new higher wages.
So, how did that help those assembly workers that are now not only unemployed, but the jobs are no longer there for another person to take upon
themselves?
This is how business works, whether you agree with it or not. Business is in the business to make money for the business owner, the investors, and the
employees. A business that does not streamline and stay competitive will not be in business very long, and will eventually shut down, making ALL
employees unemployed.
Again, I do not see this helping....