Head on a stick

We’re going to be hearing a lot about the minimum wage in the near future due to the shifting political winds in Washington, as well as the usual political breezes in the Commonwealth.

I have worked for minimum wage, by the way. I have been a busboy, an ice cream scooper, a gas station attendant, and a retail salesman, all for minimum wage. Those jobs helped fund my college education. I’m no pampered prince of patronage, and I had to earn every thin dime for my advancement, so don’t come barking to me about the minimum wage unless you’ve worked for it, too.

But things get really sticky when trying to write about the minimum wage, since it’s like bringing a calculator to a gunfight. If you want your head paraded around on a stick, just try standing between the masses and a promise of free money. You’re up against primal, mob instinct on that one. Why fight that battle?

So leave me out of those wars. If the people want free money, and free everything else, then go ahead and give it to them. I’ll be away, tending my garden, thanks just the same.

But, still, I can’t help but asking my favorite pet question on the topic: If raising the minimum wage creates free money for workers, then why not increase the minimum wage to $100 an hour?

Well?

While the world puzzles that one out, I will note that the minimum wage issue is going to be a big one for any place under the U.S. flag. The city of San Francisco, an area highly influential in some American political circles, is raising its minimum wage to $9.14 an hour.

Let me look at that number for a bit. When I was last in the position of evaluating staffing levels in California, we used, on average, a 25 percent salary “burden” to factor in the associated costs of keeping someone on the payroll. This 25 percent wasn’t a hard and fast number, we refined it up and down a bit every so often.

Anyway, if we run with that number, it winds up costing $11.42 per hour to keep a minimum wage worker in San Francisco under their new minimum wage. That comes to almost twenty-four grand a year. And that’s for a totally unskilled worker who may be entirely illiterate, but leave my pals and me out of it.

As for the Commonwealth, how many of your businesses can support such a wage structure? It’s not far at all from what the CNMI might face before too long.

If I was a business owner in the Commonwealth, I would darned sure start dropping numbers into my forecasts with an assumed wage of, say, $7.25 an hour or so, since I think this is a very likely floor for the future U.S. minimum, which, as you know, might hit the CNMI if political factors in Washington set their sights accordingly. If you add my 25 percent burden to that, you’re looking at $18,850 in per-employee costs for a full work-year.

Yep, we’re going to be hearing more and more about the minimum wage in 2007. Business owners, now is the time to start doing your cash flow forecasts for various wage scenarios.

Indeed, arguing about the minimum wage won’t get you anywhere except unpopular, so let somebody else get their head on a stick. Better to use your head the way nature intended, by quietly crunching the numbers and by preparing to act in accordance with the results.

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“People who bite the hand that feeds them usually lick the boot that kicks them.”
—Eric Hoffer