Tuesday, January 5, 2016

Minimum wage - for what?

The minimum wage is the introductory point for teens and the unskilled to get some exposure in the workplace.  That's its purpose.  True?

No. The enactment of a minimum wage was intended to preclude the abuse of workers by employers, to ensure an adequate wage was paid for a minimum living standard.

The Fair Labor Standards Act, when first passed into law, applied to industries whose combined employment represented about one-fifth of the labor force.  In those industries, it banned oppressive child labor and set the minimum hourly wage at 25 cents, and the maximum workweek at 44 hours.

The law was extended over time to deal more effectively with the tendency of employers to misuse and underpay employees.  It was intended to provide a living wage precisely because employers tended to overuse employees and throw them away.  Such is still the tendency in many business venues.

Those who suggest that minimum wage need not keep pace with inflation are endorsing, perhaps unknowingly, the practices of employee abuse and enforced poverty.  There are many economic factors at play, and perhaps several concerns about the impact of fair wages, but that's the issue.  Fair wages, fair schedule policies, fair consideration of employees in the business plan.

Retail and fast-food are among the industry offenders.   Most of them artificially limit employee hours to avoid the costs associated with full time. This is not an unintentional practice, but a careful plan for distribution of hours to minimize cost to the corporation at the expense of the employees. Two half-time workers cost less than one full time worker.  That's not actually true due to reduced productivity, loyalty, and high turnover, but some industries like Walmart and Burger King use the method aggressively.

“If you raise the minimum wage, the inevitable effect will be, number one, young people will lose their jobs or not be able to get their first jobs,” says Ted Cruz, 2013.  That's one opinion; is he right?  Keeping wages low; is that the solution we need for the sake of the teens?  

Minimum-wage workers today are older than they used to be.
Their average age is 35, and 88 percent are at least 20 years old.  Jun 9, 2014 
There are between 3 and 6 million folks in the category. 

What solutions are available?  Is it time to reconstruct the fair labor standards act?