minimum}{wage

A recent poll asked small business owners their opinion on raising minimum wage. Although only 1 out of 4 of the polled even employed minimum wage workers, opinions on the issue were split down the middle. The current federal minimum wage is $7.25. About forty-nine percent of business owners said the minimum wages should be raised, while another forty-nine percent said it should stay the same. Despite these statistics, most business owners said they planned to raise their wages at least a dollar an hour within the next year because they face competition from other businesses for employees.

I had never considered the fact that employees are considered a commodity; it seems these days that the employer/employee relationship favors the employer, considering unemployment rates. Labor is a factor of production, but it is also subject to the forces of supply and demand that the goods produced are subject to. Companies are not only competing for consumers, they are also competing for employees. In this struggle, the business’s goal is to ideally keep the price of the good as high as possible and the employee’s wages as low as possible so that they make a profit. It’s also interesting to note that small businesses not only face competition from their direct competitors (the article I read reported 1 in 3 small firms had lost workers due to higher wage offers from competitors), but they also face competition from large corporations who have the advantage in more weight than one.

I didn’t realize before reading about minimum wage that there is both a federal minimum wage and state minimum wage. I know that it is varied by state based on the cost of living in that place. The topic has actually come up a lot in conversation lately; I’ve been told that New York’s minimum wage is $15 an hour, and my dad told me the other day that Texas’s minimum wage is the same as the federal rate, he said likely due to the fact that the state of Texas tends to stay out of employee/employer relations.

Minimum wage is a hot topic right now, and my reading shows that employers are willing to meet the wage raises being discussed by politicians, which is a good sign for the labor force. I am curious to know, however, why the opinion is split in half if so few use the minimum wage anyway. I guess employers would rather have freedom of choice to make their wages whatever is necessary rather than being regulated; perhaps business owners want the option to go down to minimum wage if times get tough.