It would not matter if their wage were increased to $7 an hour. But would they pay the real price that it imposes upon the rest of the workforce – the one-half, almost three-quarters of the population that is excluded from paying for it?
We are seeing many employers now using minimum wage laws to compensate their employees. This means raising them to a higher wage, instead of doing away with them altogether. This was not the case in the United States in the 1980s and 1990s, when there was a national minimum wage.
The minimum wage in the United States is now $7.25 an hour (in the lowest wage bracket of $7.25 an hour for an adult and $10.10 for a small child) and the increase is now set by the Department of Labor in conjunction with businesses to account for inflation and the cost of living. So as long as the minimum wage remains the same, it does not raise the whole salary base. The people who must support themselves now have a higher standard of living, despite having seen their wages and benefits cut in recent years, and they are now the ones paying for it.
The minimum wage raises the cost of doing business.
According to the U.S. Bureau of Labor Statistics, employers of tipped workers had a cost impact of $19 billion on their bottom line last calendar year. This translates to an average hourly wage boost of 22.5 percent, far greater than the 11.5 percent average that tipped workers receive on their gross hourly pay.
What have businesses been forced to do?
The minimum wage is a direct transfer of income away from the middle class and towards the poor. It does not benefit workers who already have incomes and assets. It also does not provide any benefit and thus is regressive – which means it is not a program designed to benefit the middle class, and it does not help address the problem of rising incomes and growing economic growth.
As I have mentioned elsewhere and in my book, the cost of low wages and high unemployment in the United States is increasing poverty and insecurity, in ways that have nothing to do with the quality of the work being done at those wages. Instead, the costs of low wages and high unemployment are due to a mix of factors, including corporate and government intervention, the increased competitiveness of low-wage employers in the global economy, and the low wages and high unemployment in certain industries.
As I have explained in my book, the cost of
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