Master CraftsMon - Aired Monday, December 19, 2005 at about 11pm CST - Segment 10
Master CraftsMon - Aired Monday, December 19, 2005 at about 11pm CST
Segment 10
Have you been following the Living Wage debate? The thinking goes that people are underpaid. No one should have to work for less than a living wage.
When I first heard about it, I had to go back and look it up. The Living Wage is just a method of jacking up the minimum wage in a polity. It looks great on paper, but it has some odd side effects that are unseen by anyone who advocates it.
Let me show you what I am talking about. Suppose you as a business owner have $10000 per month budgeted to pay for wages. For the sake of argument, let us say that you have ten employees each getting $1000. The Living Wage people come in an demand that you raise the salary to $2000 per month. Let just say you cave in immediately and the salary jumps to $2000 per month for a few months. The Living Wage people go away feeling good. What could you do if you were a business owner? You could allow attrition to reduce the workforce to 4 people or $8000 per month and hire temporary workers to fill in the excess for $2000 per month. Your costs are now back down to the correct level, but fewer people are working. Unemployment has gone up by six. Is it better to have four people working full time at $2000 per month or ten people at $1000 per month? I would say the latter, but that is just me.
There is also one other problem the Living Wage people have. Single proprietorship, mom and pop business, are always on the verge of going under. A increase in costs could cause them to go out of business. Another side effect is that fewer single proprietorships would be formed in areas with a Living Wage. I will point out that none of this would show up except in the increase in the rate of growth in unemployed people. I'm not even sure that you could measure it. I mean, it's hard to measure something that doesn't happen, like a new business coming into existence. I suppose you could see in Living Wage areas whether the number of business permits were growing at a higher rate but I'm not sure you could get a good feel on that either.
The thing that always bothers me about the Living Wage advocates is that they do not ask the poor person's permission to intervene. Locally, the Living Wage Coalition went to Texas A&M University and made a big deal about how some of the employees were not making a Living Wage. A&M assigned a committee to look at the situation. A&M is having a LOT of problems with money. So what they did was that the raised the minimum starting salary and reallocated some cash from one place to another. It still wasn't a Living Wage. The Coalition was not happy. What I wonder is: Will A&M fill those unskilled labor jobs as they become vacant? Will they simply raise the requirements for these higher paying jobs or will they leave them unfilled as time passes? They have a fixed amount they can pay salaries. Will the rate of growth in this part of their budget slow in subsequent years? How would you measure that?
My solution for this problem is to ask a question: Why are people making below a Living Wage? The answer would seem to be that they did not get an education so they could get a good job. If they are illegal aliens, then that makes sense, but what if they are people who dropped out of school in the United States?
My position is that we need to be identifying people who are making below a Living Wage and asking them to volunteer to get a better education so their skill set becomes better. To do that we also need to provide the infrastructure to allow them to do so. For instance, what if people need childcare while they are getting education or transportation or whatever? I perceive that to be a better solution.
The State of Texas started a program called One Stop Shopping a while back, but it failed because of turf battles. What I'm talking about as far as turf battles is that every state agency has a set of paperwork that has to be filled out before they can help an individual. A person who needs a job will probably also need daycare and housing assistance. Each agency right now requires that a new set of paperwork be filled out. One Stop Shopping meant that a person entered the system anywhere and the information could flow to all the agencies that needed to help that individual. BUT different agencies needed different information and for some reason would not allow want One Stop Shopping to exist. So it got defunded.
I think it needs to be revived and expanded to include churches and nonprofits. The idea would be to have a nongovernmental agency that collected and verified an individual's information. Then issued an encrypted magnetic card with all the information for that individual on it. The person seeking help could go to the various churches, charities and the government for help with the information available for scanning. Just present the card to the group trying to help and the information flows into their system. I also thought that this card could be used to set up the books for a new employee. I mean, an employer could just add someone without a big hassle with paperwork.
The encryption is kind of important because identity theft is everywhere.
The goal of One Stop Shopping was to allow a person seeking help to enter the system anywhere and the information could be shared by all the agencies that would want to help. My idea needs some work, because of that turf battle problem makes it impossible for all agencies to share.
Somewhere in there is a quarterly meet up. What I mean is that each quarter, the churches, charities and the government have a get together where they invite the public to come and get help. Each of the different groups would have a booth. It would be kind of a festive affair.
You would think that the 211 project would have taken care of this problem, but I do not think it is.
Segment 10
Have you been following the Living Wage debate? The thinking goes that people are underpaid. No one should have to work for less than a living wage.
When I first heard about it, I had to go back and look it up. The Living Wage is just a method of jacking up the minimum wage in a polity. It looks great on paper, but it has some odd side effects that are unseen by anyone who advocates it.
Let me show you what I am talking about. Suppose you as a business owner have $10000 per month budgeted to pay for wages. For the sake of argument, let us say that you have ten employees each getting $1000. The Living Wage people come in an demand that you raise the salary to $2000 per month. Let just say you cave in immediately and the salary jumps to $2000 per month for a few months. The Living Wage people go away feeling good. What could you do if you were a business owner? You could allow attrition to reduce the workforce to 4 people or $8000 per month and hire temporary workers to fill in the excess for $2000 per month. Your costs are now back down to the correct level, but fewer people are working. Unemployment has gone up by six. Is it better to have four people working full time at $2000 per month or ten people at $1000 per month? I would say the latter, but that is just me.
There is also one other problem the Living Wage people have. Single proprietorship, mom and pop business, are always on the verge of going under. A increase in costs could cause them to go out of business. Another side effect is that fewer single proprietorships would be formed in areas with a Living Wage. I will point out that none of this would show up except in the increase in the rate of growth in unemployed people. I'm not even sure that you could measure it. I mean, it's hard to measure something that doesn't happen, like a new business coming into existence. I suppose you could see in Living Wage areas whether the number of business permits were growing at a higher rate but I'm not sure you could get a good feel on that either.
The thing that always bothers me about the Living Wage advocates is that they do not ask the poor person's permission to intervene. Locally, the Living Wage Coalition went to Texas A&M University and made a big deal about how some of the employees were not making a Living Wage. A&M assigned a committee to look at the situation. A&M is having a LOT of problems with money. So what they did was that the raised the minimum starting salary and reallocated some cash from one place to another. It still wasn't a Living Wage. The Coalition was not happy. What I wonder is: Will A&M fill those unskilled labor jobs as they become vacant? Will they simply raise the requirements for these higher paying jobs or will they leave them unfilled as time passes? They have a fixed amount they can pay salaries. Will the rate of growth in this part of their budget slow in subsequent years? How would you measure that?
My solution for this problem is to ask a question: Why are people making below a Living Wage? The answer would seem to be that they did not get an education so they could get a good job. If they are illegal aliens, then that makes sense, but what if they are people who dropped out of school in the United States?
My position is that we need to be identifying people who are making below a Living Wage and asking them to volunteer to get a better education so their skill set becomes better. To do that we also need to provide the infrastructure to allow them to do so. For instance, what if people need childcare while they are getting education or transportation or whatever? I perceive that to be a better solution.
The State of Texas started a program called One Stop Shopping a while back, but it failed because of turf battles. What I'm talking about as far as turf battles is that every state agency has a set of paperwork that has to be filled out before they can help an individual. A person who needs a job will probably also need daycare and housing assistance. Each agency right now requires that a new set of paperwork be filled out. One Stop Shopping meant that a person entered the system anywhere and the information could flow to all the agencies that needed to help that individual. BUT different agencies needed different information and for some reason would not allow want One Stop Shopping to exist. So it got defunded.
I think it needs to be revived and expanded to include churches and nonprofits. The idea would be to have a nongovernmental agency that collected and verified an individual's information. Then issued an encrypted magnetic card with all the information for that individual on it. The person seeking help could go to the various churches, charities and the government for help with the information available for scanning. Just present the card to the group trying to help and the information flows into their system. I also thought that this card could be used to set up the books for a new employee. I mean, an employer could just add someone without a big hassle with paperwork.
The encryption is kind of important because identity theft is everywhere.
The goal of One Stop Shopping was to allow a person seeking help to enter the system anywhere and the information could be shared by all the agencies that would want to help. My idea needs some work, because of that turf battle problem makes it impossible for all agencies to share.
Somewhere in there is a quarterly meet up. What I mean is that each quarter, the churches, charities and the government have a get together where they invite the public to come and get help. Each of the different groups would have a booth. It would be kind of a festive affair.
You would think that the 211 project would have taken care of this problem, but I do not think it is.
posted by aRandomTexan at
9:29 AM
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