The title should give you an idea of where this post is going. There is a problem in America and across the world with people making enough to get by. Some people are living at a poverty level and they don’t even know it. It could be worse for some if it wasn’t for laws that guarantee a minimum income or what we call minimum wage.
How much is minimum wage in America?
Good question. Currently the minimum wage is $6.55 an hour. However, on July 24, 2009, minimum wage will increase to $7.25 an hour. Believe me, there are a lot of people who can’t wait for the increase to occur.
On the flip side of that, there are some small businesses that are going to have to close their doors because of the increase. Just like some things in life you have some negatives along with positive situations.
So what does an annual income look like making minimum wage?
$7.25 (minimum wage) x 40 hours worked x 52 weeks a year = $15,080
Of course there is an assumption with the formula above that 40 hours are worked every week and that they pay you for vacation time which is not always the case. But I wanted you to get an idea of just how much money somebody makes that makes minimum wage.
This post is not intended to say that minimum wage is bad but I wanted to shed some light on the problems of increasing the minimum wage income. The truth of the matter is that people who are losing jobs are picking up jobs that are paying minimum wage until they can transition to another position. Some are doing whatever it takes to keep their families from financially spinning out of control.
Usually when we think of minimum wage we think of fast food restaurants and people who are waiting tables. Truth is some of the jobs that pay this kind of money are the dishwashers and the entry level positions in small mom and pop shop businesses.
The rate has increased every year since 2007 unlike the UK minimum wage which hasn’t had an increase for 10 years but will have one soon as well. The reason why they haven’t had one is because they haven’t needed one with their competitive economy.
Our economy has been competitive as well until recently. Our rate lingered at $5.15 from 1997 until 2007 and has increase every July since. The minimum wage may sound like good news but it really isn’t. Think about it, now everything will slowly start to increase as well. When farmers have to pay workers more, food goes up. When gas stations have to pay their employees more, gas goes up.
A stable guaranteed minimum income (GMI) means that are economy is stabalized and competitve, one that increases every year is not a sign up stabalization.
I see your point about the minimum wage in the last section – it is definitely true that the cost of items go up when the minimum wage does. It is unfortunately a fact of life. This is why I often think that the minimum wage often increases after inflation has already happened – though apparently the UK government are proud to say their increases go up above inflation. By the way, I live in the UK and the minimum wage does go up every year like the US one. It has been in place for 10 years, but it has changed and gone up throughout this period starting at £3.60 in 1999 and now at over £5.
It is sad,but there will always be people working hard for little return. And there will always be people wanting to exploit that fact. It also seems bad to me that those in the UK aged 21 or order are not eligible for full minimum wage. The top amount only applies to ages 22 and above. Seem unfair to those under 22 who work exactly the same.
Some very good points, but unfortunately in the world of capitalism it is a necessary fact. As long a people are willing to take the minimum wage jobs, they will always be there, and it will never catch up with fairness.