Minimum wage increase,help or hurt?

This post is a little different than others, I felt like sharing an actual experience that I had while working at a Cafe in Encino Ca. in the mid 90's. This was a nice cafe that sat bout 150. The food was mostly wood fire pizzas, fresh salads and pasta. An average entree was about $8 with lunch and Happy hour specials. I was one of the bartenders. I mixed drinks for the whole cafe and gave full service to the bar guests.

For most food service employees, you work for minimum wage + tips (wait staff, and bussers). Dishwashers usually start at minimum, and get a raise in a few months. CA. has a law that says you must provide benefits for full time employees, so the schedules usually consisted of 30 - 35 hours. In 1996 there was a minimum wage increase of $.50 in CA.  The owner of the Cafe laid off one of our dishwashers, and now 2 had to do the work of 3. I found that curios. The very guy that this was designed to help, lost his job. Here's why: Let's say that there were 20 minimum wage employees. their pay was increased by $10 for every hour of labor. 6 hours of labor a day x 30 days = an increase of $1800 a month. Not everyone worked every day, so we can say $1,500 is a closer number.

So this cafe owner, had his payroll increased by over a thousand dollars a month. Not because he was getting better work from his employees, not because his sales were up because of the hard work everyone put in, but because California said so. And to make up for that increase, he laid off an employee. Don't you think that guy would have proffered to have his job at the minimum wage, knowing that he would get a raise if he did well? Or that he could have worked his way up to prep cook, or something else?

The argument is always "you can't make a living on a minimum wage job." I agree, But you can't make a living with no job. This wasn't a corporate fat cat that will walk away with several million dollars even if the business fails, this was a guy who owned a restaurant. Are we willing to hurt one employee to help two? I'm not going to say raising the minimum wage raises unemployment, but it did for this dishwasher. 

In New Mexico during the mid 1950's my Grandfather stopped farming and took his family to town and got a simple job at a general store. He was able to buy a house (with indoor plumbing), eventually buy a T.V., a washing machine, and live the American dream. He started at minimum wage. Why was it easier then? 

Why could a man support his family easier 50 years ago than it is now? What has changed? Could it be the increased tax burden on us all? I'm not talking about just income tax, but SS tax, gas tax, utilities tax. Many of these are not charged to the lower class because of exemption programs. But middle class small entrepreneurs are the ones employing these workers, not corporations. It has become increasingly harder for them.

I would love to receive comments about this. I saw it happen, and it was because of the minimum wage increase. This was one of the first real life situations that convinced me that we are all connected in this economy. We cannot shift the burden around without affecting us all. The only real answer as I see it is to shrink the overwhelming need for the massive tax revenue, thus allowing us all some breathing room.

Thanks for reading,
Yell


Comments

Add comment


(Will show your Gravatar icon)  

  Country flag

biuquote
  • Comment
  • Preview
Loading



About Yell

I'm just a regular guy that considers himself a student of politics, economics, and the general state of our Country. I love to engage in conversations with others that may see things a little differently. I also believe that there is never a reason to be impolite, so while you may yell at me, I will never yell at you.

Recent posts

Recent comments

Search

Categories

Disclaimer

The opinions expressed herein are my own personal opinions and do not represent my employer's view in anyway.

© Copyright 2010