Minimum Wage & Employment
By: Bryan Bero
In my last blog, I briefly covered the minimum wage in the US. The current federal minimum wage is set at 7.25 an hour as of 2015, currently, the District of Columbia has the highest minimum wage at $9.50 an hour, but, that will change as a few States have increased their minimum wage to $15/hr by 2020. The states of Georgia and Wyoming have the lowest minimum wage ($5.15 an hour) of all the States that have currently have Minimum Wage laws. In States with a lower Minimum wage than the FED, the federal rate will apply.
One would assume that a job that is paying minimum wage would be positions that require little to no thought process, and minor training in order to complete their tasks. (i.e. fast food workers, janitors retail sales, and day labor). Some of the general assumptions about minimum wage jobs are correct many of these jobs involve unskilled labor; they can be obtained with minimal education, (GED or High School Diploma) and tarnished backgrounds, such as felonies.
However, more recently we have been seeing clients that are looking to hire skilled workers, for at the minimum wage or slightly above minimum wage price. These include warehouse workers, forklift drivers, machine operators and various other types of positions. All of these types of roles require some level of higher education, training or certification on the equipment being used to qualify for employment. Some of these skills have been learned from on the job training or special certifications that were taken and paid for. Unfortunately, finding someone to work at minimum wage or near it, for these types of positions can be quite difficult. These potential employees have more options than their counterparts do right out of high school.
Finding and retaining qualified employees to work for minimum is becoming more difficult as time moves forward. As the economy continues to heal and grow, more companies are able to offer higher pay, drawing more of the experienced talent. We have seen good employees only taking minimum wage pay in order to gain the experience to take a better paying job in the near future. This has created a serious retention problem for the smaller companies struggling to make it. At this time we are finding that the only people who are interested in working in minimum wage jobs are the under-educated, un-skilled, and with spotty criminal backgrounds, or terrible employment histories. This is causing quite a predicament for companies looking to expand and grow into a Mid or Large Sized organization – they simply cannot afford the higher wages.
I believe when Minimum Wage increases past a certain threshold, say $12/hr we will see many companies start to lay-off and even close down. We will also see many prices increasing across the board due the labor costs going up. I believe that minimum wage should increase, but I think it should increasing slowly and over time having a quick jump within a few years may wreak havoc on the lower-skilled hourly work-force and employers as well.