Staff Stuff 7-9-14/ Minimum Rage

by Matt Hughes

J-E News Editor

I’m not a financial genius, but I do believe that I have a little bit of common sense. It’s with that in mind that I want to tackle an issue that has been a real hot topic over the last year. Minimum wage.

This is one of those issues that exists in a gray area. Of course I would love to see people make more money, and on the surface raising the minimum wage to $10 per hour will do that. But consider for a moment the domino effect that will have on our society.

The U.S. Bureau of Labor Statistics say the biggest areas for minimum wage workers are health aides, janitors, cooks, farm workers, cashiers, food servers and child care workers. These are generally “unskilled” positions, meaning that a company can generally train someone off the street to do the job.

Salary.com reported that in 2011 there were 3.8 million American workers earning minimum wage. However, according to the stats, most of those workers were teenagers who lived at home and worked less than 35 hours per week. So an increase wouldn’t show any great improvement in the lives of families living below the poverty level.

The very first hit we will take will be at the grocery store. The hourly pay of seasonal farm workers will go up with minimum wage, meaning the cost of farming will go up. We’ll pay that increased cost when we go to buy fresh produce.

I guess it’s just being neighborly to be willing to pay an increase in price so that a group of people will see their standard of living increased. If this was where it stopped, I’d be more than happy. But it wont.

Let’s take a decent sized farm, where they rely on the availability of seasonal labor. All of a sudden the farmer has to pay his help more than ten dollars an hour. That’s money that comes directly out of his pocket. That’s money that did go not only to keep him in business, but to feed and cloth his family. To make up the difference he has to charge more for the produce, milk and meat he sells.

We pay that increase at the store, but it goes on from there. As the farmer’s overhead increases, the cost of everything he sells will go up. That will include milk. When the cost of milk goes up, so does the cost of cheese.

Then we will see the $1 cheese burgers at fast food restaurants disappear. Those might not be a healthy food option, but do you know who is the biggest customer of those? Poor people. The same people the minimum wage increase is supposed to be helping. Now, instead of being able to eat for a week because you can afford a $1 hamburger, they will have to pay three or four times that to eat.

But the cost of cheese, produce and meat isn’t the only reason for this. Fast food places will also have to start paying employees $10 per hour. The increase in wages will be reflected in the cost of what you buy at the drive-thru.

These are just some of the basics hits we will take. If you look up a history of minimum wage increases, you will see that each increase correlates with an increase in fuel cost. The country is already paying almost $4.00 per gallon, but if history holds true, we can expect that price to go through the roof.

Here again, the cost will trickle down. Increase in fuel will raise the cost to the farmer, the truckers who haul the produce, the overhead of the stores and restaurants that use the produce. It will cost us all more to get to the store to pay a much higher price for the same product.

What about the job market? History shows us that an increase in the cost of production results in a decrease in the amount of jobs. Many of those who lose their jobs or have their hours cut will be the ones working for lower wages anyway.

In the end I think it is no coincidence that the proposed increase in minimum wage will go into effect on a presidential election year (2016). In the short term, people working for minimum wage will see an increase in their lifestyle. They will see their paycheck go up every week, and they will be able to buy more things. It will take several months before all of the increased costs become evident at the store. By then the election will be over, with the poor, disenfranchised voter having cast his vote for the party that temporarily made their life better.