For some reason, our government is not making the right moves
when it comes to creating jobs.
Looking back over the years, wages increased because of unions
negotiating contracts which resulted in cost of living increases.
As wages rose, prices rose resulting in large profits for corporations.
It was the American way.
Laws
requiring minimum wages were put into place in 1938 by the
federal government. The first amount was 25 cents
per hour
and increases were put into effect down through the years.
The latest in 2009 was set at $ 7.25 per hour. States had
the option of meeting it or adopting a higher wage base.
Washington’s
is highest at $8.50. As mandatory wage increases advanced,
employers had to adjust prices to continue making profits,
thus problems began. It seems simple to me but appears
to be breaking the back of our country.
Workers who received the increased wages due to government
mandates did not do more work to earn the increases; therefore
employers were forced to raise prices. As prices for goods
(such as vehicles) increased, those same workers had to pay
more of their wages to purchase them.
In
conjunction with the fact each raise in wages resulted in
price increases and higher profits, it’s almost
obvious where the money went. The greatest amount is
resting in the
increased wealth of those receiving the profits!
Once
minimum wages reached a point some smaller employers could
no longer afford to pay, layoffs began. As layoffs
continued
and the ranks of the unemployed grew, the government
had to extend unemployment benefits. Light bulb moment – the
unemployment benefits paid were based upon the higher
amount of wage the employers could no longer afford
to pay. We,
the citizens of a country mired in debt, cannot afford
those payments
either
One
of our biggest problems facing our country is exports from
other countries flooding our markets
with products
similar (sometimes exact copies) to ours for less
cost. Our manufacturing
companies cannot compete because of the vast difference
in wage levels paid. I am not endorsing child or “slave” labor
practices, but somehow we have to find a way to
compete in pricing our goods.
How
about dropping minimum wage levels to enable us to deal with
our present dilemma? I’m
sure many of those laid off and running out of
benefits
would
be happy
to
get called
back even at a reduced wage. Most of them, with
families to feed, are eager to find any job,
paying any wage.
A drop in
minimum wage would also address the problem of
immigrants coming to our country and doing jobs
that pay less.
I think most employers
would prefer to hire our citizens if the legal
minimum wage were lowered or dropped.
As
I see it, reducing minimum wages and limiting or reducing
unemployment benefits paid would
help solve
some of our
country’s
financial problems.
The
recently introduced program of cutting payments and balances
on homes considered underwater
may
help some
but at who’s
expense? Seniors who are being threatened with cuts in their
entitlements did not receive reductions while paying their
mortgages. If those receiving funds they put on loan to the
government, (via payments from wages to fund social security)
had not paid into that system in advance, what would they draw
from now? Why is, depending upon whom you listen to, the balance
on hand in social security funds announced as “enough
to continue on for decades” or “almost
gone?”
If cuts have to be made they really have to be made by younger
workers who can take necessary steps to fund and secure their
retirement. Those who thought they had accomplished that objective
should not be forced to sacrifice it.
Would
a flat tax work? Lot’s of numbers
being crunched on that theory but will
it work to control
government
spending? Why, if individuals are told
they MUST CUT BACK AND LIMIT
SPENDING, should that advice not apply
to our government?
I
am convinced of one fact — any further borrowing definitely
needs to stop. If we settle down much of the hype and rhetoric
our politicians love to dish out, stop reckless spending and
work hard on our country’s real
problems, a plan should emerge.