Minimum Wage: Too Low?

Minimum Wage: Too Low?

One of the hot button for the country has become the issue of minimum wages.

Without a doubt there are people who struggle to make ends meet with a $7.25 per hour wage. It’s hard for people to pay rent, gas for the car (and insurance) to get to a job and pay for food. That doesn’t leave much, if anything, for other things.

As a company that employs high school and college students during the summertime, School-Pak has always paid more than the minimum wage to their employees. Of course this causes a problem. When compared to competing companies that pay the minimum wage, our prices will naturally be a little higher. Plus we reward returning employees with an additional pay increase for each year they return. Along the way we’re aware of an entity that is actually paying an employee cash, avoiding any federal and state tax requirements.  That will automatically give them an edge in their prices.

The minimum wage was not intended to provide for a family but has been generally considered as a starting point for those entering the market. The current average minimum wage in Australia is equivalent to $9.54 in American dollars. Australia has a very complicated system for determining minimum wages. And it’s based on many different criteria.

For a 16 year old entering the workforce as a fast food worker, the minimum wage is $9.49. The current rate for an Australian dollar is $.71 so the comparable minimum wage is $6.74 per hour.

A worker who is 21 years or older has a minimum wage of $20.44 per hour (comparable to $14.51 USD) if they are at “Level 3”. It’s complicated but the minimum wage is determined by age, and job.

A flat minimum wage program will cause either a loss of jobs and/or increased prices. There needs to be something proposed that takes into account a person’s age, training, etc., without being discriminatory.

So let’s go with an increase in minimum wage for those who rely on running a household. But let’s find a way to scale the wages similar to the Australian system. That way new entrants to the workforce will be able to get a job and gain experience and established workers will be rewarded for their experience. Also, make it portable so an employee changing employment for basically the same level of job will retain their base rate.

(Photo: rorytrotter.com)