Thursday, July 30, 2015

A Living Wage

So here's a little lesson in economics (yes it's going to be simple, but it's my blog). For a company to continue operating it must make a profit. Say my company pays me $100,000 a year. In order to do that I have to, by my work, contribute at least $100,000 in profits back to the company. That contribution could be made in many ways. I could make the company profits by associating my name with it (not me personally, but if I were someone famous). I could do it by making deals, by saving them taxes, by inventing a new widget, or by getting the burgers in the bags.

This is why people get different salaries. If my job makes the company a lot of profit I can demand (and receive) a larger salary. If my job makes the company very little profit, I must be paid a small amount, or the company is losing money by hiring me.

There are jobs, like CFO perhaps, that make the company an awful lot of money, and there are jobs like burger bagger that contribute very little to the company's bottom line.

If the company is going to pay the burger bagger more money then that burger bagger has to make the company that much money. If it takes 6 people to man the burger bistro, and each burger nets $1 in profits, and they sell a burger a minute on average, then they are making the company $60/hour or $10/person. If the company pays those people $15/hour they lose $30/hour for every hour they are open.

Now I'm the last person to say that workers should not earn a living wage. What I am saying is that there are certain jobs that are not worth paying a living wage for. These are the jobs that used to be done by high school kids or part timers looking to make some spending money. The problem is not that companies are paying too little for these jobs, it's that the jobs are not meant to be the sole source of income for a family. The fact that people are taking them to feed their family is another symptom of a failing economy. Fix the economy and the jobs will be there.

The problem is Americans have grown used to cheap stuff. Originally the government was funded by tariffs. That meant that to fund projects the cost of imported goods was kept high enough so that Americans could compete with other countries for manufacturing, and still have a high standard of living. Now the government is funded by taxes on the American people, and foreign goods are so cheap that we have no "living wage" jobs. We need to wean the government off of sucking our hard earned income and put them back on a tariff diet.


Post a Comment