Minimum Wage Hikes: A Death Knell to "the Little Guy"

September 3, 2014 - 12:09 PM

My children have some good friends, and even though it's difficult in this economy, all of them have part-time jobs.  It makes me happy knowing that their lives are starting out much like mine did – learning how to interact with consumers, working as a team to complete tasks, and making a starting point for their future.

This is a small town. In fact, I used to joke that we only have one light, but this year they changed it to a blinking red light. The only intersection, the one that used to have the only light in town, is now a four-way stop, and it seems to be working out splendidly.  The local business men and women do try to employ the children for the two years before they leave for better horizons, and many of the local teens have jobs in town as waiters and waitresses, as grocery clerks, as farmhands or general laborers, and also as employees at our only fast food joint, McDonald's.

McDonald's has done more than its fair share of hiring young kids and giving them a leg up on life, and the experience of working there really does help kids learn how to talk to people of all ages who expect the same great service and food every time.

Over the weekend, one of my daughter's best friends told me about an incident at work that had never happened before. It reminded me of when I was her age, how my thoughts began to form about governmental intrusion and the raising of the minimum wage.

While cashiering at McDonald's, she was yelled at by an elderly customer because the price of the senior coffee went up.  I can't recall the exact amount, but it was around a dime.  The elderly gentleman told her that he wouldn't be able to make it, that prices, like the price of his cup of coffee, are going up, and that, on his fixed income, he just could not support any more increases.

The girl told me that she knew the price of the senior coffee went up because there was a hike in Michigan's minimum wage.  This girl, who knows very little about the goings-on in day-to-day politics, made the connection between her receipt of extra pay and the elderly man’s unfortunate predicament of having to stop getting coffees altogether, just so that he can make his payments.

Michigan's minimum wage hike was implemented on September 1, 2014.  The first hike is $0.75, making the current minimum wage $8.15, and this increase will be phased in over four years until the minimum wage is $9.25 in 2018.

If it takes ten teenagers to cover the shifts at McDonald's every day, the franchise owner has a new weekly bill of, maybe, $300 or $400. That is $300 or $400 that he didn't have to spend in August, and the costs are just going to continue to go up.  He doesn't get anything extra for it, thanks to our meddlesome government.  He may cut shifts. He may keep a skeleton crew, but for the most part, it has got to come out of the customer's pockets, which, need I remind you, are not very deep.  Raising the minimum wage is a very dangerous and irresponsible thing to do, and the more people that can learn this truth from real life experience, the better.

My experience as grocery store clerk taught me about unfairness too. Often, new hires would come in with a higher minimum wage than I had been making, and I had been working for a longer period of time.  It was galling that these new workers, who had no experience, got handed a higher wage than I, when I had to work my way up the wage ladder. I had more experience, but I was suddenly equal to those who had none.

People sometimes think that prices always go up, that there is nothing we can do about it, but the fact that the market didn't demand inexperienced labor at a "pulled-out-of-thin-air" wage insures that prices will go up. This affects those who have no real ability to pay higher prices - those people who can't find extra income to pay them - especially in a small town where the children grow up, but almost always leave, leaving behind an ever-maturing customer base that almost always has a fixed income.

Your labor and experience is worth something, and when the government decides that your labor is worth whatever they say it is, it takes the decision-making out of the business-owner's hands.  It leads to an auto-pilot style of management and lowers the work ethic of the laborer.  And of course, this leads to a misconception held by many workers, wherein your boss is the enemy and unionizing against him is the only way.

The President's recent remarks that, "America deserves a raise," and, "If I were busting my butt in the service industry and wanted an honest day’s pay for an honest day’s work, I’d join a union," makes that connection complete.  Fortunately, there are young people out there who are learning how it all hurts the little guy.  And information learned by experience is a powerful tool against rhetoric from a mere politician.