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Opinion Quantity vs. quality in the wage debate

George HasaraOne of the cool things about being self-employed is that you are free to violate minimum wage laws. That was something my wife and I did regularly during the 13 years we owned and operated our business. It wasn't the plan but it often worked out that way.

Except for the self-employed and my waitstaff friends out there, most of you don't have that legal right to offer your services below the government mandated wage. For the longest time, this wasn't much of an issue since most wages were as high or higher than the official rate. When I started working as a teenager at a buck ninety an hour, I thought that was good money compared to the crummy minimum wage of $1.65.

There are proposals to raise the minimum wage from a crummy $7.25 to a crummy $10.10 an hour. Unfortunately, both numbers are hardly insignificant to many employers. When operating on a thin and volatile profit margin, it doesn't take much to go under. Once under, unless the business is “too big to fail,” a business stays under, and so ends contributions to the economy and the tax base. It's usually easier for a bigger company to adjust to added costs than it is the small-time operator. “Mom and Pop” business closings typically aren't headline news.

Raising the minimum wage will be a key issue in this year's national elections. Minimum wage laws are popular politically. Since there are far more people working at or around minimum wage than there are employers - it's easy to count the votes on this one.

I view minimum wage laws as another type of price control. Most of us aren't employers but all of us are consumers so we can relate easier to price fixing. While we might support a mandatory $10 an hour pay for the person flipping the burger, would we support a minimum price of $10 for the burger he's flipping? After all, the guy who owns the burger joint now needs to make more money to cover payroll. You might pop for ten bucks for a hamburger, but it depends on a lot of factors that relate to value. Ultimately, if you don't think it's worth it, you don't buy it.

Prices determined by market forces are generally understood, but often take a detour when it comes to wages. I think part of the issue is that most people are not paid directly for what they produce. The average person is compensated for quantity (time spent on the job) not quality. Often workers of varying skills and productivity are grouped together at the same pay rate. It's not surprising that the concept of equality of pay even for unequal work has developed. People don't take kindly to the notion that they aren't even worth minimum wage. It's like telling them they can't get a date. Of course, if there was the minimum dating law...

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