The Case Against a $15 Minimum Wage

The "fight for $15" is in full force across this country as it's being slung around by politicians like crack rocks. Everyone gets excited and addicted to thought of making $15 an hour at 16 years old. However, just like drugs, it's a false high and quickly things crash back down to earth in spectacular fashion. Fifteen dollars an hour is a false promise because what they don't tell you, is how damaging it would be to the businesses that actually gave you the job. Let's break it down. Right now the federal minimum wage is $7.25 an hour. If it were moved to $15 an hour, you are more than doubling the cost per employee to the business. Unfortunately for you, the 'greedy corporation' doesn't make anywhere near what you think they do.

The average 'below the bottom line' profit for most companies is 7.5%. Below the line means the money left after every expense is paid and money that needs to be re-invested into the business for it to survive. To further explain, the industry I work in, sees about 6% on average. This includes roughly 17% of the revenue taken in, allocated to pay the employees. My industry in particular relies heavily on employees making between 8-12 dollars an hour.

If we were to take the minimum wage all the way up to $15 an hour, our labor costs would go up to roughly 28% of revenue. That is 11% higher than before and since we only saw 6% that puts us 5% in the hole. So how do we make up that money? Jack up the price. That is called inflation. We have to make money, otherwise there isn't any point to being in business. So the average cost of our product goes from $10 to about $17. Furthermore, our customers might stop buying our product because it is now too expensive. If that happens and we go out of business, what happens to your $15 an hour job? It disappears. I will agree that $7.25 is low and should be raised. However, it should not be by much, perhaps a dollar. Instead of attacking the wage for what it is, we should examine what it's purpose is. This wage was meant for first time employees into the work force. No self respecting company will keep their people at $7.25 for long anyway. Most give raises within 30 days of employment, if not starting higher than minimum wage to begin with. If you make yourself valuable to your company, they will pay up to keep you with them and not their competitor. Rather than focus on getting a $15 an hour minimum wage, focus on increasing your skill set and then go get what your'e worth!

#RonnieR