Posted: September 7, 2014
SEIU (Service Employee’s International Union) has recently staged protests in Chicago and elsewhere trying to get the Federal government to raise the minimum wage to $ 15 an hour. There are some problems with their ideas:
- The food services industry has a profit margin of 2.4% and not a lot of leeway to pay double the salaries they are already paying.
- Costs in this industry, a very competitive industry, may not be able to be passed on to consumers squeezing owners of businesses even more.
- This industry has lots of part time positions because people don’t eat all day and restaurants, unlike the government, can’t afford to pay people all day to sit around and do nothing.
- A natural response to seeing their labor costs go up is for business owners to shut down the business or lay off employees, trim operating hours, or give fewer employees who produce more hours.
- Service jobs do not require education or special skills to perform, and there is plenty of competition for them so wages would have a natural tendency to go down if you believe supply demand economics.
In the past, as well as now, if you want to make more money you need to improve your abilities so you can command more money. In the local Home Depot they have a machine doing the work of a sales clerk at the register and we will see more of this as the cost of labor increases.
If you are looking for guarantees of a middle class lifestyle by working in a lower class job you are living in the wrong country – try Europe or Canada.
We don’t know where the Federal government first got the idea they could demand what a business could or couldn’t pay?
Personally, we think the Federal employees should all take a 20% cut in pay. Wonder why SEIU isn’t advocating for that?
Full article here >>>.