People at MC Donald’s are striking and walking off the job. At the time I was living in Indianapolis and a few people were arrested during protests at a few East Side MC Donald’s. Most of the protesters were asking for 15 dollars an hour, more than double the Federal Minimum Wage salary. But increasing the minimum wage will not improve the finances of the poor. Proponents of the minimum wage salary say that by always raising the Federal Minimum Wage Salary it will help lift people out of poverty. People also claim that raising the minimum wage will really help improve the finances of Blacks and Hispanics.
Vanessa writes for the Center For Progress writes in an article for The Benefits of Increasing The Minimum Wage For Colored People (http://www.americanprogress.org/issues/race/news/2014/04/21/87248/the-benefits-of-increasing-the-minimum-wage-for-people-of-color/):
The Fair Minimum Wage Act would be a significant step to address this gap and help lift people out of poverty. A total of 6 million workers would be lifted out of poverty if the minimum wage were raised to $10.10, and 60 percent of them would be people of color. Blacks, Asians, and Hispanics would benefit significantly, since they constitute a larger share of minimum-wage earners than their share of the overall workforce. They represented 42 percent of minimum-wage earners in 2013 despite the fact that they made up just 32 percent of the workforce. Yet, as the above infographic shows, raising the minimum wage would mean a significant wage increase for blacks, Asians, and Hispanics, who would see their total wages rise by $5.2 billion, $2.4 billion, and $8.5 billion, respectively.
Most people look at poverty and poor people the way Vanessa does. What I mean is most people believe that all one has to do is force businesses to pay people more money and this will lift poor people’s wages up and lift them out of poverty. But people are not looking at the entire picture of what will happen when this happens and they forget to think about what causes so many people to live in poverty. The problem of the large number of people being poor and in poverty is not related to those poor people with jobs not making enough money, the problem is that there are not people with marketable job skills to fill positions or to start and keep running profitable businesses. Most people also forget who pays for the increased salaries forced upon them by the federal government and what are the ramifications of forcing business owners to raise people’s salaries.
The problem I have with the idea that the Federal Minimum wage law is helping people is that if people want to help the poor, whether they are black, white, Hispanic, or cartoon characters they have to figure out ways to create jobs without using tax dollars. Tax dollars come from people and businesses thus it takes money away from individuals and businesses. This means individuals and businesses now cannot spend their money the way they want thus they have to make adjustments. One adjustment that businesses have to make because of taxation is finding ways to reduce labor costs which becomes a huge issue with rising minimum wage salaries.
When increasing wage is increased businesses have their labor costs increased which means it is now more expensive to hire people. If its more expensive to hire people then businesses have to ensure they hire people with the most skills and experience possible or they will not get the return on their investment of hiring this new expensive person. If its more expensive to hire people then eventually businesses are not going to be able to hire more people. If businesses are not hiring more people then there are people left unemployed than would be if businesses were hiring more people. This is why businesses should be setting the salary for their employees not the government because businesses know how much they can afford to pay based on the signals it gets from the market and its on financial statements.
The problem is the minimum wage is supposed to be paid to very low skilled workers performing jobs that require very little skills but this is not happening. Yes, we have a minimum salary being offered in exchange for a low skilled job but we have more experienced and more skilled people working these jobs than should be working these jobs. This is why I call the poverty problem a skills and experience problem because if more people can get more experience and business skills then more people can fill vacant job openings and more people can start and keep businesses running.
Regardless of color, the minimum wage law will penalize low skilled individuals more than higher skilled workers because it becomes too expensive to hire low skilled workers. The more the minimum wage is increased the more expensive it becomes to hire people with low skills. This means the 25 year old that has graduated high school and has had some jobs is a more attractive candidate for a minimum wage job than an 18 year old high school graduate with no job experience. Increasing the federal minimum wage just displaces younger people from low skilled, low wage jobs preventing them from gaining necessary job skills.
Its important to find ways to improve people’s skills so that they can work jobs or create and run their own business. If we want people to improve their lives and be able to provide for themselves without the help of government welfare programs then we have to have an economy where people have skills to run their own businesses or work for other people’s private businesses. The only way to get business skills is for people to have the opportunity to get work experience. When people start gaining work experience they don’t have very many skills so they trade the low skills they have for low pay. But if people don’t have these skills they will not start and keep any new businesses running, and people will not be hired for businesses that are running, thus people will remain poor.
This is important in regards to federal minimum wage and helping the poor because it’s the government raising people’s salaries and not a company increasing salaries based on productivity. Which means a company may have to pay more than it normally would for certain positions so people with more skills will be hired more often at low wages than lower skilled people. But low wage jobs are meant for low skilled people which is what creates a huge problem for poor low skilled people and for the economy and job market.
My evidence that this Minimum Wage law is not helping the poor, and is actually hurting Blacks is the fact that the unemployment rate for blacks is double that of Whites and Asians and has remained this way in spite of raising the minimum wage year after year. More evidence is that the teenage unemployment rate for Black teens is double that of Whites and Asians. For African American teens age 16-19 years of age the unemployment rate according to Bureau of Labor Statistics in September 2014 was 30.5% and the unemployment rate for African American adults was 11%. Compare this to the unemployment rate for white teens 18.7% and 5.1% unemployment rate for White Adults during the same time period. I believe these statistics exist because the problem is not with laws and policies that can magically make people rich but poverty and unemployment is mostly a skill problem.
Lets look at who actually is using the Federal Minimum Wage salary. Most of the people that are using the Federal Minimum wage are 25 years or older according to the 2013 BLS statistics (http://www.bls.gov/cps/minwage2013.pdf). This means people that have graduated from high school and /or college are working more jobs that offer the minimum wage salary than those that have not. To the untrained eye this does not seem like a problem that would negatively affect the poor but I want to highlight why it is a huge problem to the poor.
Employers for the most part hire the employees they believe have the best skill set for the position being offered (Whenever friends and family members are not hired). This means if people want to be hirable they need to have skills that employers are looking for. Regardless of the occupation a person chooses they will need to have skills for that occupation. The only way to get skills for any occupation one will have to have experience in that occupation. Now back to the reason I highlighted the fact that most of the people working jobs that offer minimum wage are 25 years or older. Federal minimum wage jobs are jobs that require very low skills to be worked and these jobs are intended to give people skills necessary to advance in this field. This one of the reasons why the company pays such a low wage for the position is because it requires very few skills to perform the job and the market for the same position is flooded with people that can easily perform this job.
Now if people aged 25 or older are working the jobs intended to give people experience necessary to advance in any particular field then how can younger workers, get experience to allow them to gain employment? People age 25 and older are low skilled workers that are more chances than not living off these wages and probably will hold this minimum wage job for an extended period of time. Older people are holding jobs to survive at low wages that younger people should be holding to give younger people job skills that they need to be hired as they get older.
These statistics seem to agree with my theory that if one decreases the unemployment rate of teens you also decrease the unemployment rate for adults. This theory seems reasonable considering the fact that if you allow more teens to work they will gain business skills that employers look for when these teens look for work as adults. This is why I believe we need more free market policies, that don’t involve the government and allow businesses to create salaries so more people can work and gain business skills. This way more businesses can hire people at salaries that allow them to expand and hire more people and more people have skills to start their own businesses. If people disagree please respond.
therodneysmith 
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