Monday, January 14, 2013

Felines And Minimum Wage

First and foremost, I got a cat this weekend. I'm super pumped about it. Don't judge me. How could you judge me for loving her?

You can't. I rest my case. This picture is from the first time she came out from under the bed while somebody was around her. Last night she finally was comfortable enough to come see what was so cool about the top of my bed while I was sitting on it. She's quite the scaredy cat but she's getting more comfortable every day and I can't wait to go home today and see if she's spending more time out from under the bed (even with her exploration, it is short lived and she quickly goes back to her fort). Anyway, I'll leave this topic just after one more picture.

This morning I was on the bus coming to work when craziness started to happen. The bus kept having more and more people get on. Way more people than normal and all of them wearing suits. Now last week there was a class of kids from the College of Saint Rose who got on my bus in the morning and none of whom, the professor included, knew how the bus works, but that was one group. These were people at different stops, dressed the same, and in large numbers. Now I saw the effects of this last week when trying to go home where busses were so overloaded that I wasn't let on, but I hadn't seen it in the morning until today. All of these new people that didn't exist before are now here for one reason. Congress. Last week the legislature kicked off its new session in Albany so right now every member of congress and the entirety of their staffs are in town. Now I've lived here for nearly 5 months and never saw the effect of legislatures being in town on public transportation. This leads me to believe one thing, these people aren't sticking around for very long. I'm not really sure what that means for the democratic process when it takes 5 months before I could realize that the people running New York aren't actually ever at the capital in anywhere close to a complete capacity during most of the year. I understand the importance of the members of congress going back to their districts to talk to the people they represent. But has there been nothing noteworthy voted on since before I arrived? Does anybody show up to session ever? Or do I only have to deal with staffers on the busses for a couple of weeks in the new year? Time will tell but it's looking like the last option will be the right one. 

Now, while surrounded by staffers this morning my mind wandered over to a topic for who knows what reason, the minimum wage. Now the Federal Minimum Wage is set at $7.25/hour. My home state has a higher minimum wage of $7.40 (Whoot so high!), and New York just keeps the Federal minimum wage requirements. Putting minimum wage in different terms, minimum wage for somebody that works full time year round is $15,080. Now this is technically a wage that is livable (I survive on less than this and it's above the Federal poverty level for a single person). That being said I'm not sure how many people can get a full time, minimum wage job. If a person needs a car to commute to their job then this is unfeasible to survive off of, insurance alone would destroy a bank account let alone maintenance and other car issues. 

So if we aren't employing people 40 hours a week in minimum wage jobs then our minimum wage isn't providing people with wages that are livable. 

When adjusted for inflation our minimum waged peaked in the 1960s when it was worth about $10/hour in todays money. That would put people at $20,800 a year working full time. People would only have to work 29 hours a week to reach what our current minimum wage gets people for working 40 hours a week. This is better, but still not perfect.

Now, I understand that if you raise the minimum wage it therefore becomes more expensive to operate your business. I also understand that some business probably cannot afford a higher minimum wage (you can always argue that you can not pay higher-ups as much but you also need to pay them enough to attract the type of talent you want and in some cases the higher-ups is the single owner and that is it and if a company is barely making a profit raising the minimum wage would literrally kill the business or force layoffs and shorter hours or lead the business owner to work even longer. These will usually just be start ups). 

But I have a solution to these problems. A new company has x (let's say 10) years to operate on the federal (or state if it's higher) minimum wage level. This gives the company a chance to keep costs of labor low and grow as fast as possible. After that, or for any company older than 10 years, your net profits for the last x (let's say 3) years are averaged. If your a company of x (say 50 or less) employees and you average a certain amount in profits your minimum wage requirements go up to a higher level. Essentially you tier minimum wage with a floor (we can use the current $7.25) that goes up to a ceiling (there does have to be a limit, we are still talking about unskilled labor mostly). This encourages companies to to increase their profit margins even more than we currently do but without cutting the cost of labor. Companies with bigger profits must pay employees more, and that means more people want to work for them. If you are stuck in the $7.25 minimum wage category you're the last place people want to work. It is in your best interest to make yourself more marketable to potential employees to attract better employees. 

But doesn't this hurt start ups? Yes and no. There are enough good employees looking for work and only a limited number of spots available, even in higher paying minimum wage jobs. So you could still get good talent. That, and it encourages employers to train their employees to be good employees. You're not going to fire your entire staff and start anew with every new tier. You want the people you already have to be worth the extra you have to pay them as you advance up the system. So you train them to be better at their jobs and teach them good work habits and ethics. In the end the economy grows and people can afford to survive. 

I welcome thoughts on this as it's something I hadn't thought of before and can't find anybody else talking about any similar ideas after a quick google search.