Post by Gingerbread Man on Nov 14, 2013 11:49:51 GMT
"The Minimum Wage Should Be Abolished
By William Wilkie
Theoretically, a raise in the minimum wage should be a simple adjustment for inflation that businesses have by now adapted to. As inflation raises the cost of goods and the prices businesses charge, one would expect the workers wages to rise to counterpart that upward trend caused by inflation. In reality, the cost of living always rises more than the increase in salary.
There are generally two viewpoints with regards to increases in minimum wages; the employee view and the employer view. For the employee, the minimum wage never seams to be enough and a raise in the minimum wage doesn't make a significant difference in his pocket. For the employer the rise in employee expenses makes doing business more costly and affects the businesses bottom line.
The Small Business Owner
The hardest hit by an increase in minimum wages is the
small business. Small businesses that employ a large number of unskilled workers can see a massive jump in their costs of keeping employees when the state or federal government the minimum wage. Often small businesses operate on a slight margin of profit, so any change to their cost structure can be a devastating blow to their budgets. Furthermore, as the small business model is extremely competitive, there is little margin to raise prices to customers or clients without the risk of losing business to a larger competitor who is able to absorb the increase in minimum wage without increasing their prices.
Relocation of Businesses Overseas
It is because of some of these concerns that congress is slow to increase the minimum wage. Also, there is already bitterness within the population for US businesses that are relocating overseas their support facilities or production so that they can take advantage of low paid workers.
For US workers to contest competition from unskilled workers overseas, they have to stop being unskilled themselves. They need to take advantage of educational opportunities and gain important skills so that they can enter a new market where those skills will land them a well paying career that is not liable to go overseas if there are specialized workers at home.
Alternatives to the Minimum Wage
As it stands, the minimum wage is unworkable in the US. If it is too low then US workers won't want to work for it and if it is too high then companies will simply relocate overseas. The minimum wage just keeps people in poverty as it doesn't allow them to progress. As an alternative, businesses could implement payment by productivity of the individual worker.
As an example, I successfully managed a large organic coffee farm that had the minimum wage structure. If I wanted to prune all of the shade trees on the farm, it would take 100 workers 30 days to complete. So, I implemented a payment based on productivity. I set a price for pruning one tree and it was then up to the worker how much he wanted to work and earn. At the end of the day,
it took the 100 workers only 10 days to complete the job. Each worker earned just under three times the minimum wage, so they were happy. The farm was then able to get more jobs done that went towards improving the crop yield, or it could hire fewer workers for the same production figures.
I believe that this model could be adapted to almost any business, not just farming. I have seen it in factories on production lines; if management wants to increase the production, then everyone on the production line has to work harder but they also earned more. If someone couldn't keep up, then they were moved to another job so that the majority could keep to the quota and keep their higher wage. There are many ways to restructure a business so that it can function on a system of productivity or incentive based wages.
William Wilkie writes about personal finances at his website where you will find articles and reviews to help you know How to Manage Your Money. There are also Personal Finance Tips to help you with your personal finances.
Article Source: EzineArticles.com/3920464"
Personally, the govt. setting the wages that any business has to pay an employee flys in the face of a free market economy. It forces a small business to pay a productive employee the same amount of a lazy employee. Further than that, it's a centralized govt. control on business which is pure socialism. Booo, hisss!
By William Wilkie
Theoretically, a raise in the minimum wage should be a simple adjustment for inflation that businesses have by now adapted to. As inflation raises the cost of goods and the prices businesses charge, one would expect the workers wages to rise to counterpart that upward trend caused by inflation. In reality, the cost of living always rises more than the increase in salary.
There are generally two viewpoints with regards to increases in minimum wages; the employee view and the employer view. For the employee, the minimum wage never seams to be enough and a raise in the minimum wage doesn't make a significant difference in his pocket. For the employer the rise in employee expenses makes doing business more costly and affects the businesses bottom line.
The Small Business Owner
The hardest hit by an increase in minimum wages is the
small business. Small businesses that employ a large number of unskilled workers can see a massive jump in their costs of keeping employees when the state or federal government the minimum wage. Often small businesses operate on a slight margin of profit, so any change to their cost structure can be a devastating blow to their budgets. Furthermore, as the small business model is extremely competitive, there is little margin to raise prices to customers or clients without the risk of losing business to a larger competitor who is able to absorb the increase in minimum wage without increasing their prices.
Relocation of Businesses Overseas
It is because of some of these concerns that congress is slow to increase the minimum wage. Also, there is already bitterness within the population for US businesses that are relocating overseas their support facilities or production so that they can take advantage of low paid workers.
For US workers to contest competition from unskilled workers overseas, they have to stop being unskilled themselves. They need to take advantage of educational opportunities and gain important skills so that they can enter a new market where those skills will land them a well paying career that is not liable to go overseas if there are specialized workers at home.
Alternatives to the Minimum Wage
As it stands, the minimum wage is unworkable in the US. If it is too low then US workers won't want to work for it and if it is too high then companies will simply relocate overseas. The minimum wage just keeps people in poverty as it doesn't allow them to progress. As an alternative, businesses could implement payment by productivity of the individual worker.
As an example, I successfully managed a large organic coffee farm that had the minimum wage structure. If I wanted to prune all of the shade trees on the farm, it would take 100 workers 30 days to complete. So, I implemented a payment based on productivity. I set a price for pruning one tree and it was then up to the worker how much he wanted to work and earn. At the end of the day,
it took the 100 workers only 10 days to complete the job. Each worker earned just under three times the minimum wage, so they were happy. The farm was then able to get more jobs done that went towards improving the crop yield, or it could hire fewer workers for the same production figures.
I believe that this model could be adapted to almost any business, not just farming. I have seen it in factories on production lines; if management wants to increase the production, then everyone on the production line has to work harder but they also earned more. If someone couldn't keep up, then they were moved to another job so that the majority could keep to the quota and keep their higher wage. There are many ways to restructure a business so that it can function on a system of productivity or incentive based wages.
William Wilkie writes about personal finances at his website where you will find articles and reviews to help you know How to Manage Your Money. There are also Personal Finance Tips to help you with your personal finances.
Article Source: EzineArticles.com/3920464"
Personally, the govt. setting the wages that any business has to pay an employee flys in the face of a free market economy. It forces a small business to pay a productive employee the same amount of a lazy employee. Further than that, it's a centralized govt. control on business which is pure socialism. Booo, hisss!
