The Problem With Raising Minimum Wage — A Real Story and Real Experience

images-45EDITOR’S NOTE:  This article was originally run after a Michigan legislative vote about raising the minimum wage last year.  In light of Connecticut’s decision to raise the minimum wage to the rate of $10.10 today, we have decided to move this article to our front page temporarily.  Thanks for reading.

In Michigan, they are working toward raising the minimum wage to $10 per hour.  Now, at first glance, this sounds like good news.  For, we all feel like we should be making more money than we are, and seeing a movement toward raising the bottom has got to be good news for everyone, right?  Well, Common Sense Conspiracy wants to explain why raising the minimum wage doesn’t always work like it should.

When I was younger, I worked in a retail establishment and I was paid the current minimum wage of $4.25 per hour (giving away some age details here, aren’t we?).  I worked hard, day in, day out, and over time, the management thought well of me and gave me a big quarter raise.  Now I was toiling away for $4.50 per hour, and things were really looking up.  Then, I got a small promotion of sorts, moving from the bottom of the totem pole to a little higher rung, and they raised me all the way to the staggering wage of $4.85 per hour.  I was overjoyed.  This was some real money, and soon I would be able to afford a car, insurance, and gas to put in it (which was less than a dollar a gallon, I might add).

At about that time, a good fellow named Bill Clinton was President and he was working hard to get the federal minimum wage raised.  He believed that $4.25 simply wasn’t enough to be the floor here; almost everyone in America that was making $4.25 agreed.  So, he fought the usual Congress battle and pushed through legislation to raise the federal minimum wage to $5.15.

The buzz around the workplace was amazing.  Everyone was upbeat.  After all, almost everyone at the bottom of the spectrum was about to get what was at that time a massive raise.  The most you could ever hope to get out of the bloodsuckers at “raise time” was a quarter, and now President Clinton was tossing them at least a $0.90 per hour a windfall.  That’s like almost a dollar.  We started looking at new cars, dreaming of moving into our own place, and maybe being able to buy the processed meat in the little plastic bags instead of the kind in the can.  It was good times.

Well, I was pretty happy about it too.  First of all, I’m a pretty nice guy that wants the best for everyone generally.  I didn’t begrudge that all my coworkers instantly jumped up over the level that I worked hard and eventually gained recognition to get to.  I believed in the system and just good old fashioned human kindness.  I believed the company would know that this wasn’t right, and this windfall everyone got would extend to me as well.  See, I believed that people like me that had managed to separate themselves from the others through hard work and dedication would be further rewarded to put that pay scale back into place.

I was wrong.  Dead wrong.

images-46What the company did in response to the minimum wage increase was not only to not alter the pay scale (meaning the top pay at the high end stayed exactly the same) but it even decided to count this government-mandated raise as our next two “raise times” at once.  So, everyone in my class was moved from their current rate to $5.15 per hour.  That was our raises for this year.  Next year, we could then set our sights on moving up to $5.40.  If we were lucky.  But times were tight and there were pretty little memorandums on white paper hanging around everywhere about how we all just had to pull together and get through this.

I did get a raise.  I was making $4.85 before; $5.15 after.  I got a $0.30 per hour raise, which I concur would have probably been greater than the next raise I would have gotten by the ordinary trend…I probably would have got stuck at $5.10 without Bill Clinton’s intervention.  So, yes, I “benefitted” but in reality, I was then leveled out with everyone else at $5.15, even though I had been able to separate myself and move beyond that.  In recap, everyone got an even bigger raise than I had gotten up to that point, and not because they were necessarily a good or bad worker, but because they were alive and breathing.  And for those that had been there for years and years and reached the top of the scale, nothing happened for several years after that.  Finally the company instituted a “cost-of-living” raise and gave the oldtimers a lousy quarter for their loyalty.  By then, the ones that had received the minimum wage windfall had already gotten more raises and the result was that the difference between top pay and just starting today became less and less.

As a side note for sticklers, the minimum wage back in 1996 was raised in two parts, but the result was the same as what I have noted here.  Just saying.

So, the problem with raising the minimum wage is that the American government believes that everything else will just fall in line.  In reality, employers often use it as an excuse to avoid further raises at all ends of the pay spectrum.  It also results in workers feeling belittled that had earned the right to make more than the minimum wage and saw everyone catch up with them overnight.

It’s simple.  As usual, the government only is doing half of what it needs to do.  Raising the minimum wage could be a good thing, but only if you make laws that this raising must affect everyone no matter what pay level they are at.  Meaning, pay scales must be changed to reflect the new normal.  Leaving it up to companies to do this on their own creates nothing but the same situation all over again.

3 thoughts on “The Problem With Raising Minimum Wage — A Real Story and Real Experience”

  1. Huh? You have a very bad boss and management… then blame that on increase of minimal wage? Why not blame the company? It is they who made these decisions.

    And also would the opposite, decreasing the minimal wage, bring more good results? Would lower wages makes it easier for people to live? Would lower wages makes people more happy?

    How about keeping the minimum income steady, would that have been better? Would you like the minimal wage to be back to those good old times? Would it have been enough these days?

    You are quite short sighted in this issue. You only looked at your own circumstances and concludes that it is true for everyone and everything.

    Also should they manage every little thing? You said that “Leaving it up to companies to do this on their own creates nothing but the same situation all over again.” So the government should be doing the management of the company? That the government should not leave it to the companies to do it on their own? How do you think the companies would feel about that? Again you fail to look further that your own circumstances.

  2. Sure, the author is giving his/her own perspective. What else would they offer? I agree with CSCADM, that giving everybody an ‘across the board’ raise does more harm than good. It gives those ‘entry-level’ employees a boost when they didn;t earn it. I can’t blame the company for withholding raises (indefinately). Raises aren’t a requirement. That is ‘entitlement’ thinking. In effect, this company (along with ALL the other companies who are now forced to spend more or their earnings) will have to either raise their prices, or let some people go. I would consider letting go the dead weight employees who didn;t earn this raise. This company had to manage the best they could, and if nobody lost their job, they did pretty dang well. Current wage hikes to $9 is astounding. I’ve heard both sides from friends all over, but let’s consider this; WHO is making minimum wage? The educated employees? The talented or skilled employees? NO. It is the entry level people who the company is paying to do something most primates can do, or for someone who is ‘in training’ at the company’s expense. If the government needs to keep up with the times, then everytime they raise the poverty level, the minimum wage should go with it. I’m not saying its a great idea to keep it the same, but regarding this story, the guy who worked his way up gets the shaft, not the underwhelming employees who are riding the wave. Minimum wage isn;t supposed to be for supporting a family. I would imagine by the time you can even HAVE a family, you should have ‘skilled’ yourself up above the MINIMUM. I give those employees a C minus for their efforts. That may be awful of me, but if a dork like me can overcome this adversity and make a salary that supports a family, then any dweeb in this country ought to be able to do gooder. Oh, that’s right, I learned to work hard to raise the bar. My family was that important to me. My kids who are just getting started in the workforce can work for minimum wage. I wouldn’t even pay them more than that.

  3. More Republican/Tea Bagger crying wolf (emphasis on crying). When the minimum wage is raised companies across the board just raise the price of their product.

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