Myrtle Beach, SC Correspondent-This is a tough one…Where one side of me says yes we need higher wages (I’ll refer you to my previous comments that employers need to pay decent wages because it’s the right thing to do); the other side of me thinks there is some room on the opposite end, the “bill” side.
I do know that we need more competition for utilities. Let’s be honest…they have monopolies. There are TWO electric companies in my area, and each covers certain parts of the area. Ere-go, I have ONE choice for electric. Same with Cable, two companies, only one covers my home…in the NORMAL business world that equates to a monopoly. How do they get away with this? Trust me it’s a deep subject so we will have to save it for another day. I believe competition would help with costs of utilities.
Maybe the solution would be income based? Maybe you pay based on household income. I’m not sure how that would be enforced, or how “renters” would play into that. Maybe income based up to a certain income? I’m not sure about that, but it’s a suggestion.
What about offering discounts based on volunteer hours? Clean up a road and get 2% off, volunteer once a week at the homeless shelter and get 10% off? I’m sure all of us could find a little time to volunteer. I kind-of like this idea. I’m not sure how it would work, who would keep track it, but maybe that’s a viable solution to a few problems.
Gastonia, NC Correspondent-This is the first time I’ve seen “reducing the cost of living” floated as a way to help those toiling at low-wage jobs, and it puzzles me. How exactly would we go about that? Tell the electric company to charge less? Put government controls on grocery costs? Make Verizon sell phones for $50 each with unlimited everything? This begins to sound like the sort of socialist plan that worked so very well in the USSR and, more recently, Venezuela.
Raising the minimum wage is an imperfect solution, but I also think it’s a far better one than what those who will be paying the wages would have us believe. Payroll expenses aren’t the largest part of the budget for most businesses with minimum-wage workers, and raising it won’t trigger the gigantic price increases that we’ve been told are coming. You won’t pay $9 for a Big Mac if Johnny the fry cook starts getting paid $9/hour. The market won’t support it, and the businesses will have to find ways to compensate.
Wage stagnation is a huge issue in this country, with mega-corporations holding onto ever-larger cash reserves and not letting is trickle down to the rank and file. If the boardrooms of this country won’t take steps to share the wealth, let’s put on our Bernie Sanders masks and make them do so!
Owatonna, MN Correspondent-Mandating a higher minimum wage always sounds like a good idea in principle, especially when those who favor raising base wages compare the average wage to salaries of the “One Percent”—CEOs of large corporations, politicians, professional athletes, entertainers, bankers, lawyers, etc. The argument is, if a company can afford to pay certain individuals millions of dollars per year, surely the company is profitable enough to give its other workers what seems like a modest bump in pay—a few dollars an hour.
The problem is that most businesses in this country—something like eighty percent—have only a few employees. The owners of these companies rarely earn seven-figure salaries. Most probably don’t earn six-figures. Forcing a struggling small business to boost minimum wages from the current rates to the popular figure of $15.00 per hour would erase any profitability the business might have, which puts the business at risk of bankruptcy. If that happens, everyone loses because those workers go from the higher minimum wage to no wages at all, unless and until they can find a new job.
The real problem is institutionalized inflation, which began when the Federal Reserve Board (aka our nation’s “Central Bank”) was established in 1913. Inflation subtly eats away our purchasing power one or two or three or ten percent per year. Most of us never notice that prices gradually creep upward because a one-percent rise in prices makes little difference to the average worker. Stack ten of those years together, and toss in a few years of five to ten percent inflation, and suddenly, the minimum wage is no longer a livable wage for even a single person.
Inflation can only be eliminated by abolishing the Federal Reserve Board and returning to some sort of gold standard. So really, the only way to increase living standards is to decrease the cost of living. Technology advances have done miraculous work in bringing down prices for many items (computers and TVs for example). But other costs have skyrocketed relative to the overall cost of living (health care, health insurance, prescription drugs, college tuition). In general, skyrocketing prices are usually caused by overregulation, restricted competition (supply) that allows monopoly pricing, or artificial demand forced upon us by an entity such as government. The obvious solution here is to deregulate restricted industries to allow for more and fairer competition, which always drives prices down.
Deregulation will also help small businesses survive and afford to pay higher wages because most regulations are designed to give financial advantages to large companies that don’t want competition from small business. Think of the Big Box retailers gradually driving out competition from mom-and-pop stores. But the permanent solution to wage inequality is to eliminate inflation and allow wages and prices to find an equilibrium that allows more workers to earn enough to meet their basic living expenses.
Sheffield, Jamaica Correspondent-The matter of increasing minimum wage for low income workers would not be the right approach to improving economic opportunities. A better solution would be to reduce the cost of living.
It would be easier for low paid workers to meet the demands of daily living and provide for their families. This would not only provide basic necessities but it would boost morales, satisfaction, and create a peaceful atmosphere.
Lowering the cost of living would also lower the level of stress on individuals. They would not be tied up in debts or personal finances. They would simply be living within their means and maintaining a proper budget.
There would be no need to be depending on the government to increase their wages. This would improve poor living conditions for working households.
Purchasing power would also increase. A standard family consisting of a low paid worker, would be able to cover basic living expenses and would be able to buy other items.
This would be possible because the cost of items would be low enough for a low income to acquire.
Think about the possibility of saving! Not many families can save due to the high cost of living but if it was lowered, the possibility of saving would be an achievable feat.
Cartwright-I don’t support increasing the minimum wage. In fact, I’ve spoken in the past about the problems created by the minimum wage and would support abolishing it. Let the free markets decide the appropriate cost of labor. I discussed the economics of wages earlier, and the same comments hold for this question. The best thing we can do is ensure we have a vibrant, growing economy that is creating jobs for workers and that we’re not flooding our labor market with workers from overseas who are willing to work for much less.
I think there is some merit to the point about reducing the cost of living but I’m not sure that is necessarily going to pan out. Individuals first need to live within their means and budget wisely. As I discussed before, they need to make good choices in terms of their lifestyle. Are there opportunities to reduce the cost of living for consumers? Competitive forces might drive down the cost of food or certain goods and services, but it’s not likely that we will see a reduction in rents or automobile operating costs, for example, which both represent large expenditures for many individuals. If there’s a way to drive down the cost associated with these, then you can effectively put more money in workers’ pockets which could help improve their standard of living. Unfortunately, the economics of the real estate market don’t lend itself to a reduction in costs for consumers. Gas prices fluctuate, but car prices continue to rise as does the cost of maintaining an automobile. I don’t know that there’s any obvious way to drive down these costs without major structural changes in the industry and substantial increases in competition.
