With President Barack Obama scheduled to deliver his State of the Union address on Jan. 28, one of the key domestic policy issues he faces is an expected Democratic push for legislation to increase the minimum hourly wage from $7.25 to $10.10. Would such an increase give people more money to spend and help the economy, or would it restrict creation of new jobs and hurt the economy?
I started my small builders’ hardware business back in 1985 when my previous employer went bankrupt. In the 29 years since then we have grown from a couple of employees to close to 50.
I am fortunate enough to say that even if the minimum wage was changed to $10.10 an hour as President Obama has suggested it would not effect my workforce, as I am able to pay my employees more than the new suggested hourly wage.
But I do so because market forces require me to pay more to attract better employees. I also know that 29 years ago if I were forced to pay wages at $10.10 an hour I most likely would not have survived some of the ups and downs a small business faces when it is just getting started.
The dual reality is that the labor market and not the government is the best mechanism to set wages, and small businesses, the best source for new job generation, will be the hardest hit by an increase in the minimum wage.
— Mike Morgan, Colleyville
Two fast food restaurants sit side-by-side. Owner A is focused on profit margin (i.e., shareholder equity), therefore refusing to hire additional staff at the higher minimum wage.
He is not concerned about the inordinate customer wait time. Nor is he concerned about employee turnover/loyalty, believing minimum wage earners are a dime a dozen.
Owner B is focused on customer satisfaction (volume sales) therefore she hires enough staff to guarantee a minimal wait time. She believes that repeat customers recognize familiar employees over time, and that constantly training rookie employees is a major expense. So, she has no problem paying the new minimum wage.
Which restaurant are you most likely to be patronizing a year from now?
— Tom Smusz, Brock
Raising the minimum wage to $10.10 per hour nationally would reduce (or eliminate) those jobs for many who enter the work force for the first time. Workers who are already at the new rate, having worked hard to get there, would become the lowest of the low and would be starting all over.
The new rate would encourage companies to more automation to eliminate humans to perform those minimum-wage jobs. With education, a minimum wage job will not be a career choice.
— Donald Potts, Fort Worth
The only people who will advocate raising the minimum wage to $10.10 per hour are the uneducated and uninformed.
If the minimum wage is raised, it will result in fewer jobs, less hours and more business closures. Even liberal Bill Gates said it will cost jobs.
The minimum wage was never meant to support a family — it’s an entry wage. You start at minimum and get experience and training then you make more money.
The skill level of minimum-wage workers is much too low to pay $10 an hour. Anybody can sweep the floor and flip burgers; it would be foolish to pay non-skilled workers so much.
— Mark Moon, Fort Worth
The proposed 37 percent increase in the minimum wage is bad public policy.
This increases business costs without offsetting productivity increases.
Businesses in some industries will be forced to make adjustments requiring more output per worker, operating with fewer workers, forgoing business expansion, use of technology to replace workers, increasing prices, etc.
Government regulations, taxes and mandates that increase producer costs are drags on the economy, not stimulants.
The accelerating government activism over the past years has resulted in the continued uncertainty that is stopping U.S. businesses from expanding.
— Dennis Patchett, Hurst
The current rate of $7.25 an hour has existed since 2009. The cost of living should be considered when deciding to increase the minimum wage.
Why not use the same percentage increase that Social Security recipients receive?
— Deborah Fleischmann, Fort Worth
It may give wage earners more money to spend but is detrimental to those of us on fixed incomes. Prices will go up in accordance with the new minimum wage and ultimately this boost to wages won’t help the economy because some workers will be placed on part-time status or simply have their hours cut to offset the $10.10.
What you don’t hear is that many minimum-wage earners receive state assistance, food stamps, etc. Plus, minimum wage is generally for those that are young, inexperienced or lack a higher education to compete for better paying jobs. A $10.10 wage looks great on paper but is not practical in these economic times.
— Darlene Rogers, Fort Worth
In the real world, increasing the cost of labor with no corresponding rise in productivity forces employers to adjust labor costs. If they’re unable to command price increases, they must cut expenses.
The most immediate effect on expenses is to eliminate a job position or simply not hire. Hurt by this the most are the unskilled and entry-level job seekers, such as our high school kids seeking work experience.
Democrat schemes mostly move money from one pocket to another. While a pay raise is welcome, the business and the unemployed have less to spend. The net effect on the economy is, therefore, zero.
— Burt E. Ballentine, Keller
Raising wages by government fiat is an exercise in futility because it violates the principle of equal value in the exchange of goods and services.
When goods and services are exchanged, their values must be equal for the exchange to benefit both parties. Value is determined by what someone will pay, in effort or currency, for a given good or service.
If the price is too high, or too low, the exchange will not take place because one of the parties determines that they will not benefit from it.
A forced exchange, such as government-mandated wages, results in unequal benefits, which leads to a fall-off in exchanges, a slowed economy, lost jobs, etc.
This lasts until the inflation resulting from raised wages once again makes the value of the wage the same as it was before the hike. Then pressure to raise wages begins anew.
— Joel Downs, Hurst
I don’t think it would help or hurt the economy. Most of the increase would be spent on present household rent, utilities, loans and other debts — not much luxury spending.
I understand that less education generally means low-income jobs. But the earnings disparity is horrendous, almost shameful.
CEOs, sports coaches, university presidents, school superintendents and others are high, compared to low wages of very important much-needed jobs such as aids in nursing homes, hospitals, care for the elderly and other jobs, including the cleaning and maintenance of those facilities.
I don’t know how to solve the problem. I would not want us to become a welfare-socialistic country like we seem to be heading.
It might help some but in the long-term create financial woes to our present tremendous debt.
— George J. Anthony, Fort Worth
The minimum wage increase is a ploy of the Democrats to convince people that they are for the “little people.” It is a myth and they know it, but they use it as an emotional tool to lure low-wage-earners to vote for them.
When a business has to increase wages to workers, it in turn has to increase prices to compensate for the loss, which makes the entire process a zero-sum game.
It sounds good, and it always works because they denigrate those who disagree with them, making them sound heartless and inconsiderate. It also fuels inflation because the increase in prices affects everyone.
— Clista Hancock, Arlington
I must respectfully disagree with letter writers saying minimum-wage jobs are mostly filled by people who have made poor choices in their life.
Having worked in the service industry for several years, I can say there are as many reasons for a person having a minimum-wage job as there are people who have them. To suggest only the lazy and ignorant occupy these positions perpetuates a false and degrading stereotype.
True, there are some in these jobs who haven’t aimed very high in their lives. But I’ve also seen people apply for these positions — and they are by no means the exception — who are well-educated but whose jobs were sent overseas or simply eliminated; women who, after running a household for 15 or 20 years, find themselves divorced and without a solid set of job skills; and intelligent and eager young people who wish to improve their lives but lack any family support.
If someone was lucky enough to make all the right decisions in life the very first time around and his career path has been successful, I applaud him. But to judge our fellow man strictly upon their wage is both wrong-headed and uninformed.
— David G. Hale, Azle