A "living wage"? Nonsense!
Chad Allen writes "A living wage" (Grand Rapids Press, Pulse, Mar. 18, 2006) in support of raising the minimum wage in Michigan. He clearly wants everyone to make a "living wage", and is upset that a dishwasher at a local restaurant is "living day to day" and a sandwich shop employee "is struggling to support her family."
How many restaurants will remain in business paying their wash staff and sandwich makers $40,000 a year? Does Mr. Allen forget where that $40,000 comes from? It comes from the sale of the product the restaurant creates, food. Mr. Allen is free to pay $12 for his next hamburger but I'm guessing he won't be a repeat customer, to the demise of the restaurant.
The business of all business is to make a profit, unlike the stories we have heard of Enron, many businesses and particulary small businesses just barely break even at the end of the year. It's all about profit and loss. Can you produce and sell a product for something more than it costs you to make it? If you can't, you go out of business, plain and simple.
Mr. Allen advocates the use of government force to require business owners to pay more for human labor without any thought to what the consequence that increased cost to produce has on the business balance sheet. When the cost to produce goes up, the price of the end product must rise also. The alternative is to reduce your cost to produce, usually by laying off workers if another efficiency can not found elsewhere.
Using the government to force higher unskilled labor rates as an answer to a better standard of living is not the solution, it's really part of the problem.
[I used $40,000 as an estimate of what Mr. Allen fails to define as "a living wage."]
How many restaurants will remain in business paying their wash staff and sandwich makers $40,000 a year? Does Mr. Allen forget where that $40,000 comes from? It comes from the sale of the product the restaurant creates, food. Mr. Allen is free to pay $12 for his next hamburger but I'm guessing he won't be a repeat customer, to the demise of the restaurant.
The business of all business is to make a profit, unlike the stories we have heard of Enron, many businesses and particulary small businesses just barely break even at the end of the year. It's all about profit and loss. Can you produce and sell a product for something more than it costs you to make it? If you can't, you go out of business, plain and simple.
Mr. Allen advocates the use of government force to require business owners to pay more for human labor without any thought to what the consequence that increased cost to produce has on the business balance sheet. When the cost to produce goes up, the price of the end product must rise also. The alternative is to reduce your cost to produce, usually by laying off workers if another efficiency can not found elsewhere.
Using the government to force higher unskilled labor rates as an answer to a better standard of living is not the solution, it's really part of the problem.
[I used $40,000 as an estimate of what Mr. Allen fails to define as "a living wage."]
posted by Steve @ 12:16 PM
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