Minimum Wage
From: Wikipedia.
http://en.wikipedia.org/wiki/Minimum_wag...A minimum wage is the lowest hourly, daily or monthly remuneration that employers may legally pay to workers.Statutory minimum wages were first proposed as a way to control the proliferation of sweat shops in manufacturing industries. The sweat shops employed large numbers of women and young workers, paying them what were considered to be substandard wages. The sweatshop owners were thought to have unfair bargaining power over their workers, and a minimum wage was proposed as a means to make them pay "fairly".
I think we all know why we have a minimum wage, but apprently not all of us do, and at least one of them is running for President.
Now comes Michelle Bachmann, newly annouced canidate for President and her views on minimum wage are quite different when she said taking
"away the minimum wage ... could potentially wipe out unemployment because we would be able to offer jobs at whatever level." http://www.politico.com/news/stories/061...Here is the simple reason why she is wrong. Payroll is one of the largest expenses any business has. Cutting payroll is a tired and true way to increase profits by lowering your expenses. My last employer, Tiger Direct, changed my Pay Plan 4 times during the 5 years I worked for them, all of them were pay cuts. Just imagine what they could do if they did not have to pay their employees a minimum wage.
Let's look at Walmart with over 1.4 million employees and do some simple math. Let's take out the executives and managers and say that 1 million of Walmart's employees are minimum wage earners. Now lets say they each get paid $8.00 per hour minimum wage for this example.
Now let's pretend President Bachmann signs the repeal of the minimum wage law and now Walmart decides to pay all their minimum wage employees $5.00 per hour. That's 3 Million Dollars that Walmart saved with just that.
Now of course some Walmart employees get mad and quit and go to work someplace else. However, if Walmart can lower what they pay, so will the others and soon enough you're considered lucky to have a $5.00 per hour job.
Now lets do the math at the employee level. $8 per hour times 40 hours (assuming President Bachmann does not repeal overtime laws too) is $320.00 per week or $16,640 per year. If they get a pay cut to $5 per hour then it would be $200 per week or $10,400 per year. $120 less each week, is half a monthly car payment and a third or more of the rent, not to mention most of all the utility bills.
Cutting the minimum wage would actually INCREASE UNEMPLOYMENT, not eliminate it. In Florida, unemployment pays up to $275 per week. So lowering the minimum wage below what unemployment pays will only make people go on unemployment in order to make ends meet.
15 million Americans became unemployed over the last 3 years and if they lower or eliminate minimum wage, many more millions will follow. What happens next?