Sunday, July 26, 2015

Economic disparity

We all hear talk about economic disparity as an emotional issue.    Some of us are affected by it as we may be at the bottom of the wage range, earning minimum wages (or even less).
There always has been and always will be a huge difference between the highest and the lowest wage earners.   In examining this I've come to some thoughts about it.   You may agree or disagree, but they're worth at least thinking about.
(1) There's talk about raising the federal minimum wage to $15/ hr.
Why not raise it to $100/ hr. ?   As wages rise, so does the cost of living.   You can continue to raise wages but it's only a temporary fix for those at the bottom of the wage scale.
(2) As the cost of labor increases, so does the cost of goods and services.   Therefore, the lowest wage earners eventually end up where they were (in purchasing power) before a wage increase.
(3) Increases in wages DOES NOT increase productivity.
(4) Increased minimum wages cause unemployment.   If an employer must pay more and still be competitive, he must reduce his workforce.
(5) The only real beneficiary of increased wages is the government.   As one moves into greater income, they also move into paying more taxes in sales tax, income tax, social security, etc. 
(6) Raising wages is no incentive for workers to better themselves to seek better jobs.
(7) Raising wages makes the good worker resent the poor worker as they are both being paid the same for more or less effort.
(8) People on fixed incomes are penalized by the increase in their cost of living without any chance to increase their income.
Shouldn't a pay raise be the incentive for one to achieve better productivity ?   If one employee is giving their employer 110% and another is only giving 50%, are they both entitled to the same raise in pay ?   Of course not.   I'm an advocate of merit raises.   That keeps the best employees striving harder and staying longer.   
If you're working for minimum wages and they are raised, that sends the message that you don't have to do anything to increase your worth to your employer... you're "entitled" to it.
The real solution to increasing one's income is that they become better educated so they qualify for those better paying jobs.   There will always be the "slackers" that don't do a thing about bettering themselves and just go about sniveling about there being no opportunity for them to get ahead.   They have therefore earned the right to be at the bottom of the earning scale.

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