The debate does not seem to be going away when we speak about the raising of the minimum wage.
I recently had a meeting with a local school district about rendering my services in teaching business courses at the High School level. Of course, I have a complete business plan on how to integrate the business department into the entire school experience, but they did not want to discuss this. My primary goal was to see if the pay rate was negotiable-they indicated that only science and math teachers are they able to procure additional funding to attract the right teachers. I was told that even if they were to acquire additional funding for a business teacher, that business teachers are a dime a dozen, and they would much rather higher an educator that went through school studying education-and so they want someone that learned business from a book!!!
WOW?!?! I was dumbfounded at this response, but it is no wonder that we are raising a generation of entitled individuals that don't understand the meaning of hard work and how even the least employee contributes to the bottom line, and how these jobs are developing traits, talents and skill sets to be used later in life.
I have 2 scenarios to present (I am a stats and math geek, so numbers speak to me-if you have a problem with my math comment and I will explain in greater detail).
Situation 1
Let's assume that the minimum wage is increased to $15 per hour, and you are lucky enough to find a full time 40 hour per week position for the year. This yields $31,200 per year. Sounds great right?
Since we were discussing teaching, we will use a real example from the district that I sat down with to discuss their details of paying a teacher.
The minimum pay for a first year teacher is outlined as such.
Base pay is $29,798 with an educator adjustment of $4,200. The Total Salary for a first year teacher is $33,998 with a Bachelors Degree. Now I could go through some other figures and determine the adjusted amount per hour, but that is not the point for this situation.
With a quick google search, I found the following link that provides that the national average of a public university per year tuition is $25,588. If we take this number out over the course of a 4 year program, one would spend $102,352 for that degree.
(http://www.campusexplorer.com/college-advice-tips/E66537B4/Costs-Of-A-Bachelor-s-Degree-Program/)
We will also compare what the current Utah minimum wage ($7.25 per hour) would be per year. This would yield one earning $15,080 per year.
Comparing the current minimum wage, working from age 18 until age 69, and if you only had a high school education, and obtaining a 2% pay raise each year, you would earn over your lifetime, $944,159. A teacher, based upon the school districts steps with a pay increase year over year, and not including any income for the first 4 years because they are in school would earn, $1,713,982. That yields an increased earnings of $769,823 over the same lifetime, so making the $102,352 investment worth it.
Now we will compare the entitle minimum wage ($15 per hour) with a 2% pay raise each year. This would yield the individual $1,953,433 over the same lifetime. So why would someone invest 4 years of their life and incur $100,000 of education to earn $239,451 less.
Now you may argue, that a 2% pay increase in minimum wage is highly unlikely. Taken for the US Department of Labor website (http://www.dol.gov/whd/state/stateminwagehis.htm), Utah had a $1.00 per hour minimum wage in 1968. Take into account that it is now $7.25 per hour, that is a 725% pay increase over the course of 48 years (if I wanted to I could be more accurate with the average pay increase per year, but we will just use this number to gather our average pay increase per year). Taking this percentage and dividing it by the time of 48 years (2016 to 1968) this gives us an average increase of 15.1% per year, not my average of 2% per year.
Situation #2
Let's assume that Joe Smiley has a business. It is a small successful business. He currently works half days (that's 12 hours as most small business owners do). Small businesses represent 99.7% of the market, which account for 44.3% of the private payroll. Let's state that Joe's business runs on a .17% profit margin after payroll, including his $60K a year salary that he pays himself. See the outlined table below for the figures. He also has 3 full time employees as well as 3 part time. The part time employees all work 24 hours each week. The employee pay is outlined below.
Owner-$1,160 per week ($29.00 per hour)
FT Emp A-$880 per week ($22.00 per hour)
FT Emp B-$720 per week ($18.00 per hour)
FT Emp C-$600 per week ($15.00 per hour)
PT Emp D,E,F-$174 per week ($7.25 per hour)
If the business was to continue with its current employee pay scale, and it was the greedy owner that took the hit. The owner would go from making $29 per hour to $15.05 per hour. His income would decrease from $60,000 per year to $31,304. Now ask yourself, would you work 12 hours a day and have the pressure of owning a business to take a $30k pay cut? In the words of my 4 year old, "Oh heck no!"
THE RIPPLE EFFECT. What would happen to the employee that has developed their skills to work up to $15 per hour? Would you be satisfied with now making the same as someone less qualified? Probably not, so you would either demand a raise, or find employment elsewhere. Let's assume the owner wants to keep you by offering you a $3 an hour raise. As you can see, there is no profit to do this, so he takes it from his pay. The owner now makes $12.05 per hour (based only on a 40 hour pay structure regardless of him working 60 hours).
Now the $18 an hour employee wants a raise, because he went to school and has an engineering degree that you need to keep him. The owner offers Employee B $21 per hour. This then leaves the owner making $9.05 per hour.
And don't forget Employee A she is the glue that you can depend on and you won't lose her, so you then offer her $24 per hour. The owner now makes $7.05 per hour.
The owner can't pay his bills, so he makes a change and decides to let go a part time worker, and offer the other 2 more time and increases them to 32 hours per week.
Remember that these part time employees were working 72 hours per week between them, and now they account for 64 hours per week, and there is 8 work hours per week that have to be assumed by someone else in the organization, and the owner is now making $10.05 per hour.
The owner feels obligated to his customers, and the employees, but after a year and working 68 hours per week for $20,904 per year (or in reality, $5.91 per hour), he decides to close the business down because his house is in foreclosure and he can go to work at minimum wage and make $11k more per year.
End result-everyone is out of a job, his customers must find a new supplier, and now there are 7 displaced workers looking to fill the role. They will all be entering the workforce fighting for a lower wage opportunity because it is a simple supply and demand. Right now in our economy there are many potential employees with high education and work experience, which means the higher the supply, the lower the demand (or the wage being offered). When you multiply this number drastically, the wages will only continue to slip while some employers raise their prices to combat the above scenario (which I will be more than happy to outline as well-just leave me a comment).
If the minimum wage does increase, it will decrease the amount of educated in our country which will result in a decrease of the competitiveness of our nation.
In my opinion, it is teaching our youth fiscal irresponsibility, and we need to change that NOW, in our homes-the parents need to be fiscally responsible first, then teach it to our youth.
You cannot have what you do not earn. My heart truly goes out to those that find themselves in situations where they cannot pay for the necessities of life. Programs have been created to help those in need, but do not use these programs as a crutch, but use it to better yourself and your situation. It is about personal responsibility for our choices. I chose to put off my education until later in life, and that is a choice that will impact my future and that I take responsibility for.
I recently had a meeting with a local school district about rendering my services in teaching business courses at the High School level. Of course, I have a complete business plan on how to integrate the business department into the entire school experience, but they did not want to discuss this. My primary goal was to see if the pay rate was negotiable-they indicated that only science and math teachers are they able to procure additional funding to attract the right teachers. I was told that even if they were to acquire additional funding for a business teacher, that business teachers are a dime a dozen, and they would much rather higher an educator that went through school studying education-and so they want someone that learned business from a book!!!
WOW?!?! I was dumbfounded at this response, but it is no wonder that we are raising a generation of entitled individuals that don't understand the meaning of hard work and how even the least employee contributes to the bottom line, and how these jobs are developing traits, talents and skill sets to be used later in life.
I have 2 scenarios to present (I am a stats and math geek, so numbers speak to me-if you have a problem with my math comment and I will explain in greater detail).
Situation 1
Let's assume that the minimum wage is increased to $15 per hour, and you are lucky enough to find a full time 40 hour per week position for the year. This yields $31,200 per year. Sounds great right?
Since we were discussing teaching, we will use a real example from the district that I sat down with to discuss their details of paying a teacher.
The minimum pay for a first year teacher is outlined as such.
Base pay is $29,798 with an educator adjustment of $4,200. The Total Salary for a first year teacher is $33,998 with a Bachelors Degree. Now I could go through some other figures and determine the adjusted amount per hour, but that is not the point for this situation.
With a quick google search, I found the following link that provides that the national average of a public university per year tuition is $25,588. If we take this number out over the course of a 4 year program, one would spend $102,352 for that degree.
(http://www.campusexplorer.com/college-advice-tips/E66537B4/Costs-Of-A-Bachelor-s-Degree-Program/)
We will also compare what the current Utah minimum wage ($7.25 per hour) would be per year. This would yield one earning $15,080 per year.
Comparing the current minimum wage, working from age 18 until age 69, and if you only had a high school education, and obtaining a 2% pay raise each year, you would earn over your lifetime, $944,159. A teacher, based upon the school districts steps with a pay increase year over year, and not including any income for the first 4 years because they are in school would earn, $1,713,982. That yields an increased earnings of $769,823 over the same lifetime, so making the $102,352 investment worth it.
Now we will compare the entitle minimum wage ($15 per hour) with a 2% pay raise each year. This would yield the individual $1,953,433 over the same lifetime. So why would someone invest 4 years of their life and incur $100,000 of education to earn $239,451 less.
Now you may argue, that a 2% pay increase in minimum wage is highly unlikely. Taken for the US Department of Labor website (http://www.dol.gov/whd/state/stateminwagehis.htm), Utah had a $1.00 per hour minimum wage in 1968. Take into account that it is now $7.25 per hour, that is a 725% pay increase over the course of 48 years (if I wanted to I could be more accurate with the average pay increase per year, but we will just use this number to gather our average pay increase per year). Taking this percentage and dividing it by the time of 48 years (2016 to 1968) this gives us an average increase of 15.1% per year, not my average of 2% per year.
Situation #2
Let's assume that Joe Smiley has a business. It is a small successful business. He currently works half days (that's 12 hours as most small business owners do). Small businesses represent 99.7% of the market, which account for 44.3% of the private payroll. Let's state that Joe's business runs on a .17% profit margin after payroll, including his $60K a year salary that he pays himself. See the outlined table below for the figures. He also has 3 full time employees as well as 3 part time. The part time employees all work 24 hours each week. The employee pay is outlined below.
Owner-$1,160 per week ($29.00 per hour)
FT Emp A-$880 per week ($22.00 per hour)
FT Emp B-$720 per week ($18.00 per hour)
FT Emp C-$600 per week ($15.00 per hour)
PT Emp D,E,F-$174 per week ($7.25 per hour)
If the business was to continue with its current employee pay scale, and it was the greedy owner that took the hit. The owner would go from making $29 per hour to $15.05 per hour. His income would decrease from $60,000 per year to $31,304. Now ask yourself, would you work 12 hours a day and have the pressure of owning a business to take a $30k pay cut? In the words of my 4 year old, "Oh heck no!"
THE RIPPLE EFFECT. What would happen to the employee that has developed their skills to work up to $15 per hour? Would you be satisfied with now making the same as someone less qualified? Probably not, so you would either demand a raise, or find employment elsewhere. Let's assume the owner wants to keep you by offering you a $3 an hour raise. As you can see, there is no profit to do this, so he takes it from his pay. The owner now makes $12.05 per hour (based only on a 40 hour pay structure regardless of him working 60 hours).
Now the $18 an hour employee wants a raise, because he went to school and has an engineering degree that you need to keep him. The owner offers Employee B $21 per hour. This then leaves the owner making $9.05 per hour.
And don't forget Employee A she is the glue that you can depend on and you won't lose her, so you then offer her $24 per hour. The owner now makes $7.05 per hour.
The owner can't pay his bills, so he makes a change and decides to let go a part time worker, and offer the other 2 more time and increases them to 32 hours per week.
Remember that these part time employees were working 72 hours per week between them, and now they account for 64 hours per week, and there is 8 work hours per week that have to be assumed by someone else in the organization, and the owner is now making $10.05 per hour.
The owner feels obligated to his customers, and the employees, but after a year and working 68 hours per week for $20,904 per year (or in reality, $5.91 per hour), he decides to close the business down because his house is in foreclosure and he can go to work at minimum wage and make $11k more per year.
End result-everyone is out of a job, his customers must find a new supplier, and now there are 7 displaced workers looking to fill the role. They will all be entering the workforce fighting for a lower wage opportunity because it is a simple supply and demand. Right now in our economy there are many potential employees with high education and work experience, which means the higher the supply, the lower the demand (or the wage being offered). When you multiply this number drastically, the wages will only continue to slip while some employers raise their prices to combat the above scenario (which I will be more than happy to outline as well-just leave me a comment).
If the minimum wage does increase, it will decrease the amount of educated in our country which will result in a decrease of the competitiveness of our nation.
In my opinion, it is teaching our youth fiscal irresponsibility, and we need to change that NOW, in our homes-the parents need to be fiscally responsible first, then teach it to our youth.
You cannot have what you do not earn. My heart truly goes out to those that find themselves in situations where they cannot pay for the necessities of life. Programs have been created to help those in need, but do not use these programs as a crutch, but use it to better yourself and your situation. It is about personal responsibility for our choices. I chose to put off my education until later in life, and that is a choice that will impact my future and that I take responsibility for.
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