Zoo Station

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Why the minimum wage may not be such a good idea

Posted by Chance on March 28, 2006

A friend of mine is trying to get a job with the company I work for. My friend has an advantage, because he is asking for a lower wage than some of the other guys. The other guys are more experienced, more senior, but they demand a higher wage, but because my friend can set his wage, he has a chance against people that are more experienced.

My friend has some experience, and a bachelor’s degree, so if he does not get this job, he will be able to find something else. Less skilled workers do not have quite the same advantage. Consider the jobs low on the totem-pole, the ones receiving at or near minimum wage. I believe that by setting a minimum wage, it makes it harder for lower skilled workers to get a job, because they cannot negotiate for a lower wage, like my friend can. Glen Dean says this: “Let me ask you all a simple question. Do you know anybody, other than a teenager or college kid, that works for minimum wage? And if the Dairy Queen is able to hire four of these kids at $5.15 an hour, how many do you think they will be able to employ at $6.15?”

The point is, companies that hire workers with little or no skills will try to keep things at the same cost. If the minimum wage goes up, they will hire fewer workers, or they will try to go another route, maybe something along the lines of the self-checkout at grocery stores.

It’s not that I want the working poor to receive less money, I just think those with fewer skills are disadvantaged even more when they have less power to negotiate their wages. If a law was passed that people with a B.S. in Mechanical Engineering had to make at least 80K a year, companies would be far less willing to hire a starting engineer, making it harder for the new engineer to get a job, and for them to even develop job skills.

I personally believe that transactions, including an employment transaction, should be based on a mutual agreement between two parties. The unskilled worker has few bargaining chips as it is, why take the salary bargaining chip away?

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