Friday, 9 September 2011
Help The Economy: Scrap Minimum Wage!
Obama's "it the governmental job to employ you" speech last night triggered an interesting point of discussion.
"It's the government's job to 'x'!". What would you fill in for 'x'? Is it their job to employ you? To ensure you have a t.v, microwave fridge, Nintendo and other great thrills of life? Is it their responsibility to govern your agreement with an employer by stating minimum pay conditions?
Here is an argument for why the government should abolish minimum wage:
1. Employers will be able to offer people a job (albeit at a lower rate) versus going offshore. Unemployment will go down. (people have the right to say, "no" to a lower wage...and they have the right to start their own company, or go to another employer)
2. It offers real incentive for people making less then minimum wage to grow in their skills and knowledge. Reality is scary AND inspiring. If the reality is you are worth $5/hour, then receive that harsh feedback and use that as incentive to gain skills.
3. A pattern of responding to reality in humility speaks value over an individual at $5/hour MORE THEN the forced law of minimum wage. Here's a simple analogy to illustrate my point:
As an owner of an aerospace machine shop, if I ship a 'scrap part' to a customer and they reject it, what option to you think will best serve me long term? Option #1: "Sorry customer, can you pay me for my time and materials so I don't lose big?" Or, Option #2: take the loss on the job and learn why I scrapped it? Obviously, in the real world, customers pay for the results I provide. No results, no pay. Although this is seemingly harsh, it speaks VALUE over me and my company. It forces me to understand why I am not creating value and gives me that chance to learn and grow. From these lessons, my capacity to add value increases and therefore I can take on more! The worst thing customers could have done is say, "hey, you are entitled to partial pay even though you did not add that value". It would have jaded my perspective and likely caused me to lower my standards. This would have devalued me and my potential. The government should take that same 'seemingly harsh' view and start valuing it's people.
4. Minimum wage is code for: "you did not earn it, but you get it anyway". How does this language inspire people to change and grow?!? It does not.
5. "Minimum wage protects employees from unfair employer treatment and abuse" is code for, "We do not trust the employee to say 'no' and walk away. We do not trust them to find another job on their merits. We do not trust the free economy from hurting people and we just don't want people hurt". This type of sheltering is destructive to people's potential. It must stop. The advice I offer to these activists is, "Stop focusing on forced laws to 'protect' people, and start working with people at lower wages and teach them how to be successful in the workplace. Although this is the road less traveled, it will produce better results.
Again, freeing the market continues to be the obvious choice for economic recovery. My passion remains simple: invest in people and help them become successful within the framework of a free market. If a relationship of valuing others under-girds the 'seemingly harsh' feedback, there is hope to develop with others such that we all advance and move forward. I am proud that each of our employees are paid based on their results! I am not satisfied with this, I desire increase for the customers, company and suppliers. Results will continue to drive this, not forced handouts.