The Minimum Wage and Risk

Editorial

 

 

By David Stewart

TheBenjaminsThe biggest difference between workers getting a wage and business owners paying a wage is RISK.  The employee starts his job and is guaranteed that as long as he shows up for work and follows the instructions for doing his job he will get paid.  The business owner starts his business without any guarantees at all.  The business man has no guarantees about income.  An open business is no guarantee that customers will part with their money for what he or she has on offer.  There are many types of  jobs available in the United States and this fact has prompted the immigration both legal and otherwise to soar since the founding in 1776.  Employees risk only their time and that risk is at worst minimal.  Very few employees are cheated out of their wages here in the US.   Business owners are at risk every day.  Currently the unions have been attacking McDonald’s and attempting to force them to raise their wages for non-union workers to a rate that would increase the price of Big Macs to more than the employees or union marchers could afford.  Unintended Consequences.  The price of Big Macs will go up and the minimum wage that the worker went on strike for will once again become a “minimum” wage.  Inflation sucks but what are you going to do?  Go on strike?

The successful business founder is rewarded, he is part of the 1%.  Maybe even part of the .01%.  If he had not started the business then not one person in the 99% would be working in the same company for this potential founder.  A medium sized company might have thousand workers building widgets that are sold to customers.  So the average worker makes very few of the widgets sold.  He is just one in a thousand workers building widgets.  The founder invented the widgets (think iPhone) that are built by the company.  The founder hired the guy who started selling the widgets.  The founder hired the guy who hired the workers and created the manufacturing process to build the widgets.  Now the world has a zillion iPhones (widgets) and the workers had the least part in making that happen.  So here we are, what is fair compensation? (Fair is a very strange word as it has four definitions in its common usage as an adverb*.  1. What I think is fair for me. 2. What I think is fair for you.  3.What you think is fair for you.  4. What you think is fair for me.)  The one thing I think we can all agree on is that everyone should be fairly compensated for their contribution to a business where they are employed.  Each should be compensated by what they contribute to the success of the enterprise and that success is usually measured by the profit the enterprise earns.  The worker who answers a help wanted ad and the founder who risked a substantial amount of time and money.  You can sell your time for a small reward and very little risk and if you think that is unfair then start your own business.

fair.everyone Synonyms for Fair: impartial, disinterested, unprejudiced refer to lack of bias in opinions, judgments, etc. Fair implies the treating all sides alike, justly and equitably: a fair compromise. Impartial like fair implies showing no more favor to one side than another, but suggests particularly a judicial consideration of a case: an impartial judge. Disinterested implies a fairness arising particularly from lack of desire to obtain a selfish advantage: The motives of her guardian were entirely disinterested. Unprejudiced means not influenced or swayed by bias, or by prejudice caused by irrelevant considerations: an unprejudiced decision.

Let’s be fair to everyone, employee and employer and let the marketplace decide what wages should be, not the government.

David Stewart is retired from tech industry and is now IT director for Citizens Journal, so not exactly as retired as he’d like to be.

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