Mandating Minimum Wage Doesn't Work

The economy and minimum wage is a hot topic and always has been. Capitalism is an evil word. Income equality seems to be the term of the year and affirmative action makes you one of the cool kids.  Everyone wants a bailout but no one wants to be seen near a bank. Wall Street is stealing all your money and won’t somebody please think about the children!

I’d like to start with this insane idea of mandating minimum wage (you know, since Alberta just raised ours by a quarter).  My husband owns a business so this one does hit close to home.  Before anyone says anything, we don’t pay anywhere near minimum wage.  His employees (which I am in fact one of) are paid well above it.  I’d love to say “I’m the highest paid person in the company” but I’m nowhere near and I’m still paid well.  I contribute, I get paid, that’s all there is to it.

There are a lot of people, including the government, both Canadian and American, that believe mandating minimum wage will solve a slew of problems.  What kind of problems do they believe this mandate will solve considering a WAGE you accept for a job is the value you place for your labour. If the job you are trying to get requires MINIMUM education, MINIMUM experience and MINIMUM skill, odds are it is valued at MINIMUM wage.

Well, one argument I’ve seen is the increase in minimum wage would increase the pay of low paying jobs?  Well, wait, why are they low paying jobs in the first place?  Who takes low paying jobs?  As I see it, low paying jobs are jobs that generally require little to no education or experience so that means little pay.  Okay, if you need more money, do what you have to, take the job but try and better yourself to do something like, I don’t know, get a better job.  Wouldn’t that be a better solution than increasing minimum wage?

Another argument that I’ve seen is raising minimum wage is the redistribution of wealth.  How does that work?  Is that like “trickle down” economy or something?  Is money suppose to flow down from the top?  The rich lose, the poor win?  I somehow don’t think so.  In the short term, it has been shown that the effects of raising minimum wage aren’t great but in the long term, the cost of goods sold does increase.  If I am a small business owner and I have to increase what I’m paying my employees, but I’m already running it pretty close to the line, does that not mean I have to increase the cost of what I’m selling so that I can still pay my employees?  It could be that or I fire someone so that I can still have some staff.  Either way, my business would still suffer.

In general, most companies pay better than minimum wage.  So why is this even an issue?  From what I’ve seen, it’s because there are people out there that believe that low income workers are entitled to a “living wage.”  Okay, so what is a living wage?  I’ve found a couple of different yet similar definitions.  

1. A living wage is a wage that is high enough to maintain a normal standard of living.  

2. A living Wage is the amount of income an individual or family needs to meet basic needs, maintain a safe decent standard of living in their community, and save for future needs and goals.

So, I have questions.  Do these definitions purport that a minimum wage is suppose to supply a living wage or is an individual or family suppose to make enough to meet these definitions.

Next, the first definition is fairly straight forward.  The second definition however is a little more complex.  

Both definitions for living wage are complicated but the second is somewhat outrageous. What I'd like to start picking on is “maintain a safe decent standard of living in their community.” That can be argued to mean so many things. What if I live in a high crime neighbourhood and have children? By mandating minimum wage and defining living wage, can I not make this the government's problem by saying I need to move to a low crime neighbourhood that's safer for myself and my children? By doing so, I now need my rent subsidized. The grocery store is more expensive in my new neighbourhood, so I need a percent of my groceries subsidized. Oh, being that I've moved to a bigger house in a better neighbourhood, my utilities are more expensive, guess I need more government money AND the list goes on. Thanks for the living wage and mandated minimum wage big government, I appreciate it.

As for saving for my future needs and goals, I want to be an astronaut!  Or maybe a race car driver, or a UN interpreter.  I don’t know yet, so let’s reach for the moon!

I hope you’re seeing a problem because I am.  Once you start adding to the definition, or even have a definition for which the government is responsible, a problem exists.  There is so much to consider.  How much of a person’s life does the government take care of?  When does the individual take responsibility for themselves?

See, I remember a time when a person would take on 2 jobs to make sure they could put food on the table and pay rent.  They were happy to have a roof over their head and that their family had a bed to sleep in.  Now, taxpayer funded programs and government subsidies are a way of life.  People actually expect others to take care of them instead of them taking care of themselves.  Hard work is a thing of the past for so many and “this job is beneath me” comes out of their mouth as they cash their entitlement cheque.

Minimum wage is not the problem, capitalism is not the problem, income inequality is not the problem.  A shift in ideals and who should take care of what is the problem.  There are too many government mandates and taxpayer funded programs now.  The government is not the solution to all problems.  If you don’t like the wage you are getting paid, then think about the university courses you choose to take.  Maybe Classic Mythology and Gender Studies are not where your time and money should be spent.  An apprenticeship in a trade program or a bachelor in business just might get you away from that income inequality I hear so much about.  You’ll have to donate money to your causes instead of protesting them.  You’ll be too busy working, like the rest of us, and realize taxes suck and the tax breaks we have are in fact okay.

Instead of increasing minimum wage for minimum skilled jobs, how about teach people increasing their skill will increase their pay.  Wouldn’t that be a better solution?