The Question Of Minimum Wage

How is it we live in a world where people who are in to parent homes where both parents are working, full time, still cant make ends meet?  There is this thing called minimum wage that exists.  Its the lowest base hourly wage that the federal law allows businesses to pay their employees for their services, and as it stands right now its not enough to allow a family to lift themselves out of poverty, even with both able adults are working.

Now in 13 states the minimum wage was raised on the first of the year.  This is certainly a good thing.  The families that were working at $7.78 will now see a slight raise in the money that they have to work with on a monthly basis.  But is it really enough?

Not really.  Here's why.  Lets take Colorado for instance.  Colorado, for instance saw a $0.22 raise on the first of the year bringing the states minimum wage to $8.00 an hour.  If an employee working at minimum wage worked 40 hours a week 4 weeks a month they would only see overall monthly wage increase of $35.20.  That's really not a lot.   If you think about it that's really not much to do anything with.  and more disturbing is that amount is added onto gross earnings, not net.  That means that Colorado households wont actually be getting an extra $35.20.  out of that will be taxes taken out.  Now its a good possibility that those families might get those taxes back at the end of the year, but again that's not much added on to that either.

Its pretty well agreed that raising the minimum wage across the board is a very important step to pulling Americans out of poverty and help them thrive.  If they have more they can spend more on things they need, get bills caught up so they arent working for those bills and maybe even develop a savings account that will help them not fall into such kinds of debt so easily again.

So the question becomes, how much?  How much is a satisfactory amount to raise the minimum wage.  Law makers are looking at raising it across the board to $10.10 an hour.  Now that's a significant raise!  Back to Colorado for instance that would be an increase of $336 per month at an average of 40 hours a week, a far cry from the double digit increase that was just enacted. This would allow savings accounts to be built, debt to be paid and increased spending.  That latter, increased spending, may not happen immediately...but it would increase as people lifted themselves out of debt.

A second question comes into view.  That of reaction by businesses to such a drastic increase.  Many say that increasing the minimum wage, especially that drastically would cost jobs, not help people.  Unfortunately, when it comes to the legendary greed of big business, nothing should be put past them.  What they would probably do is try and cut jobs, and short of that, try and cut hours, negating the wage increase.

So what needs to happen to make sure that big business doesn't negate the wage increase?  First as the increase happens they need to be made to keep their prices for whatever service or good they are offering static so it doesn't effect their consumer base.  Second, businesses need to not be allowed to cut employee hours or let them go...maybe perhaps put a limitation on how long an employer must wait to take such a drastic direction.  Instead of firing or cutting hours, these employees, perhaps these business should look at their own business practices to see what they can do to lower their overall operation costs, without effecting their employees adversely.  Firing employees or cutting their hours should always be a last resort.

Employer and business reaction not withstanding, a significant minimum wage raise would be extremely beneficial to American hourly wage workers.  It may be slow going to get a wage increase that drastic, but depending on how such a wage increase is approached, it would be a move in the right direction!