Yesterday as our little family was leaving the zoo, my wife signed a petition to increase the minimum wage. The goal of the petition was to increase the minimum wage in Arizona to $6.50 or something - I wasnt really listening.
The point of it is this - I have not ever paid minimum wage to an employee. I haven’t ever considered it a good deal for ME, as an employer. Here is my explanation. A person being paid minimum has no incentive to keep working for you. They can get a crappy minimum wage job anywhere. Since the biggest problem that I have as an employer is getting people to show up, and the second biggest problem is getting them to try - why would I want them to have less incentive to do these things?
Shawn Ritenour wrote a long acedemic blog about the effect of a wage increase on employment, and while most of it appears to be acedemically true, I think it fails to address the true needs of an employer. Yes, I pay more than the stated wage for an employee - besides the extra taxes of the governement there is uniforms, training, and benefits. The biggest expense has to be training. It costs so much time and energy to get an employee up to speed, why would I want to risk it by not offering them an incentive to stay?
I need employees to be less mobile, and less incentivised to leave for the next crappy job down the street. I need them to stay at my crappy job
. So I am opposed to the increase on the grounds that I want to be differentiated from the fast food place. If minimum is $5.15 and I am paying $9, then there is a significant spread in wage potential. Confused yet? I always pay more, and I am opposed to an increase in the minimum.
The simple economic truth of any job is this - you have to be more valuable to the company than they are paying for you. If this is not so, you will be unemployed sooner or later. Or as I like to say “everybody is on commission - some just don’t realize it”.