Minimum Wage – A Blessing or a Curse?

Minimum wage has been around for a long time. The basic concept, as I understand it, is to help ensure a certain quality of life for low income families. There are many places in the world where the average monthly income sits between $200.00 and $500.00 per month working 10 hour days. $1.00 per hour is tough to live off of today in just about any environment.

There is a long-standing debate on the pros and cons of minimum wage. I am torn on the subject, because I have worked many minimum wage jobs in my life. I know what it is like to scrape and save, cut coupons, and drive a $1000 car with a broken heater. I’ve been a regular shopper at the local DI. Living off of minimum wage can be tough.

Are Labor Costs Killing Our Economy, Driving Jobs Overseas?
On a bigger scale, I understand the world is changing. We are now in a world economy, becoming more and more tied together. Emotions run high when the topic of outsourcing of jobs overseas comes up. I understand one of the major reasons for businesses outsourcing is due to lower manufacturing costs – which come from lower wages. But as competing companies based in other markets continue to produce the same (and sometimes better) goods (computers, cars, appliances, clothing etc) at a much lower cost, does it make it more difficult for a U.S. company to compete? Is the automobile industry possibly struggling in part due to the increased expense of US labor that other countries do not have to deal with?

When it comes to labor costs I can only imagine how much more it costs to make something in the United States compared with making goods overseas. I anticipate clothing made in the United States can cost several times more than clothing manufactured in a low-wage environment overseas. When it reaches the shelf of your local department store and if two identical products were sitting side by side – one costing $15.00, the other costing $45.00 - which would you choose? For those of us who need to make ends meet (everything else being the same) we’re taking the $15.00 item every time.

Is Minimum Wage Meant For Jr. High & High School Students or for Working Adults?
Someone presented to me an interesting question the other day. How many High School students are currently holding minimum wage jobs? Their guess was that Jr. High and High School students benefit most from minimum wage jobs. There are probably a higher percentage of workers in the 15-17 year age group earning minimum wage jobs than any other age group.

I have heard arguments to have a lower minimum wage for the younger Jr. High and High School age group because: 1) There is not the same “need” for a higher minimum wage as there is for an adult living on their own or providing for a family. 2) many of these individuals are “employees in training” - they have not had much, if any, previous work experience. “A job at this age is more like training for the future workforce.” And 3) an employer likely is taking upon higher risk with this age group as the employees may be – less mature, less able to make adjustments to the work schedule (due to school), less likely to stay on the job (due to other options and low need for income).

I don’t know how a lower minimum wage for “under 18” workers would be received by that group, but some of what they said made sense – especially when the minimum wage is meant for people who are out on their own trying to make ends meet.

Open Questions
What I’d really like to know is: How does Minimum Wage impact people here in Idaho? With Idaho having a substantially lower cost of living compared to other states, does minimum wage impact Idaho more or less than other states?

With Minimum wage being intended to help increase the quality of life for the lower income families – what percentage of household providers are truly impacted by the minimum wage? Is there anyone here - or do you know of any household providers who are currently holding minimum wage jobs?

Here in Idaho, minimum wage is currently set at $5.85, and set to go up past $7.25 by the end of July 2009. Should this increase be going to all age groups, or should it go to only to those 18 and above?

Minimum wage is a tough topic, because helping people get by is part of the great culture of America. What to do in today’s society?

3 Comments, What do you think?

Gas Prices In Idaho Going To Ruin Family Vacations?

Summer is coming on fast and gasoline prices are soaring. There is no question that the increased cost in gasoline will have extreme consequences in the future if prices soar. Some estimates predict gasoline going as high as $5.00 per gallon by the end of the summer, and $10.00, $15.00 or more per gallon in the not-so distant future.

The rise in gasoline prices has been blamed on many factors including:

Increased Demand In China
China is prospering. Their economy has been booming and more and more Chinese are starting to pick up on the luxuries that come with prosperity – that includes purchasing cars. What happens when you have a billion people buying cars who didn’t have them before? Demand goes through the roof – and they are all going to be filling their tanks to keep them running. Can you blame them?

Unstable Situation with Iraq.
Iraq is a factor, but not just oil produced there. 25% of the worlds oil passes right of the shore of Iran, and according to the national media, an unstable situation with Iran continue to drive prices higher.

Switch Over from MTBE to Ethanol
In years past, the Environmental Protection Agency have put more strict requirements on the percentage of oxygen required in gasoline. In the past gasoline companies used methyl tertiary-butyl ether (MTBE) to boost oxygen levels, but with concerns that MTBE may contaminate groundwater, more refineries are switching to Ethanol. But it is said there is not enough Ethanol available, and the shortage of Ethanol has caused some gas stations to run out of gasoline at times.

(I can’t help but wonder if there are other, yet bigger, factors happening behind the scenes? Price fixing? Planned limited supply? (remember Enron?) I’m not knowledgeable enough about the oil and gas industry to even speculate, but what I do know, is there is big money on the table, and sometimes the temptation is just too much for some people.)

With gas prices soaring, one news report said for the first time there is a notable decrease in how much Americans are driving. Many Americans are driving less, and some families are planning on cutting their summer travel this year due to increased gasoline prices.

We live in a fortunate situation, Southeast Idaho we have wonderful summer opportunities within just 2 or 3 hours drive - no need for 12-15 hr trek. Yellowstone National Park - Jackson Hole, Wyoming – Salt Lake City, Utah – all great destination locations with fun, excitement and adventure. And there’s likely dozens of other smart, fun, and inexpensive summer activities that you take advantage of right here.

For me, some of my fondest memories come from summers spent within 100 miles of here.

With so much available so close to home, will Idahoans be changing their summer plans?

Personally, I don’t think so, not this year. But if prices continue to rise and prices start to approach $15 - $20 per gallon, even that trip to Yellowstone may become something too expensive for the average family. Look out, because I think that day could be coming. And when it comes, oh how life will change.

26 Comments, What do you think?