The Minimum Wage War

The minimum wage war
Minimum wage (The Fair Labor Standards Act) was signed into law by President Franklin D. Roosevelt on June 25, 1938 intending to make things “fair” for workers. This has been a contentious debate ever since. Proponents of minimum wage claim that it guarantees all workers a minimum standard of living, and it also ensures that workers are paid overtime. Opponents have the opposite view saying that it cuts workers hours and limits the number of people a company can afford to hire.
I believe that minimum wage should be set by the market, not the government, like any other commodity. Having a minimum wage creates a few problems; First like I previously stated, it limits employer’s ability to hire freely. If the minimum wage is $15 an hour and the employer can only afford to pay $45 an hour, he can afford three employees. Without minimum wage, he might have double or triple that number of employees. Some will say without minimum wage than its not fair. Why isn’t it fair? If I offer you $5 an hour to pick corn, and you agree to that price; what part is not fair? The part where I pay you what you agreed to for the work I need? If you didn’t like the amount I offered, you would either counter, which I may or may not accept, or you would decline the offer and go elsewhere. Here is where the market comes in. There are only so many people in the market able and willing to pick corn. So, if I am offering $5 an hour, and taking up some of those people, my competitor down the road might offer $6.50 to try to encourage those people to work for him. In response, I might raise my offer to $7 an hour, or throw in some fringe benefit that my competitor isn’t offering. This is how the free market works. Without government interference. The market always takes care of its self.
Now let’s discuss those that say minimum wage is not enough to live on. My response to that is it’s not meant to. Minimum wage is paid to non-skilled workers. Hence, the word non-skilled. As an employer why do I have to pay you more because you do not have the skills needed to make more money. When did I become responsible for your life? Your mortgage, your car payment, your grocery bill, your daughter’s wedding, your retirement, is irrelevant to me. Don’t get me wrong, I am not saying that employers shouldn’t care about the welfare of those that work for them, after all they are people. What I am saying is that my responsibility to an employee should stop at what I agreed to pay them for the job they are doing. If someone wants to make more money, if they need a bigger house, or they are concerned about their future, that should not be put on my shoulders. Go to school, learn a trade; a minimum wage job is and should be for minimum skilled workers.
I bet you don’t know any accountants, doctors, or mechanics that make minimum wage. That’s because they learned a skill. They are worth more. The market recognizes this and allows them to ask for more. Minimum wage should be an interim job for those people on their way to learning a skill. It should not be a career choice. McDonalds should not have to pay someone $15 an hour to flip burgers because they are not motivated to do more with their life or had too many kids before they could afford it or bought too big of a house.
It is my belief that people need to accept responsibility for their own life, their own destiny, and if they want more, than go out there and do what it takes to get it.
I do not believe in minimum wage. I think it’s a failed experiment and bad for the economy, bad for businesses, and demotivates those that benefit from it.

New Articles Coming

Just over four years ago after more than 175 articles I put underthehood.us on hiatus, while deciding whether I wanted to continue writing. It took a while, but I finally made the decision to continue and I will be providing new content starting right away. The old articles are still there from when I started the blog back in 2010 and I will be once again be writing new articles. I hope you will check out the new stuff and pass the site along to your friends and family that may have an interest in small business articles. As always, your comments and suggestions are welcome.

Many thanks,

Joe Melle

Why Social Media Makes Customer Service More Important Than Ever

Customer service has always been an important aspect of any company; and it always will be; good customer service creates good PR which creates free marketing from the source which of course is the customer, and this type of marketing is precious because it can only be given not bought.  The same of course is true of the opposite; bad customer service creates bad PR which creates what I call negative marketing.  Social Media has expanded on this in a substantial way on both sides of the customer service spectrum. Continue reading

Is Target Marketing Really a Necessity?

I have heard companies complain about the cost of target marketing and the question has come up more than once as to whether it is really necessary.  Those holding the checkbooks would most likely say the answer is dependent on the cost; but that is a bad way to decide how to market.  Sure everyone has a budget, but if you are looking at your budget strictly from cost you are only considering the front end, and you are most likely losing money, even if you don’t know it.

Let’s break this down in a simple way; let’s say your product or service is for homeowners, and that it does not apply to those that do not own a home.  You can do an email campaign, or a direct mail campaign, or any other type of direct marketing fairly inexpensively if you do not target, so in many business owners minds, this is cheaper.  But I am here to tell you, it’s not cheaper; sure you may have made a profit meaning you brought in more than you spent, but I say you lost money.  Here’s why; according to the U.S. Census 65% of the adult population in the U.S. own a home, and that’s your customer right?  The problem is by not targeting you are adverting not just to those that own homes but to the 35% that do not own homes as well.  What does that mean?  It that no matter what you’re sales end up being, whatever you spent, 35% of it was wasted.

Had you target marketed your front end cost would have been higher, however instead of reaching only a portion of your market you would have reached one hundred percent of your market, meaning your sales would most likely increase and your back end profit would outweigh your front end sales.   Now there are products that do not need target marketing because they apply to the population in general, but that is exception rather than the rule.  Most products or services have a specific target or targets which will naturally increase the level of sales.  Don’t take my word for it; research target marketing and see what you find.

Getting Linked-in

Linked-in is a major social media for professionals, that offers opportunities to find other professionals and get introductions, write your own personal profile, join relevant groups and get the latest industry news and comments, and provides a platform for your company profile. For those with limited experience of using social media or linked-in here’s a couple of recent useful articles to help direct your activity. Continue reading