Did You Know….

Did you know that the standard definition of ‘middle class income’ is $25,000 – $100,000 per year?

For this thought it is imperative to remember that middle class is the class BETWEEN the upper and lower classes. This shows:

Upper Class is $100,001+; and

Lower Class is $24,999 and below.

All of these numbers are considered for a person working full time; 40 hours per week, 52 weeks per year.

With the middle class covering such a wide range of income due to cost of living in different areas (i.e. New York City, Washington D. C., etc.), it could also be that someone making $100,000 per year in an economically depressed area could be seen to others in the local area as being upper class.

There is a political party where the candidates are touting a line of increasing the standard of living for the middle class and helping the lower class by raising the minimum wage. As a tactic to get shallow people to vote for them, it is a good tactic.

Let’s look at this tactic. A person working full time now at minimum wage of $7.25 per hour makes $15,080 per year. This is below the middle class, and well inside the lower class. A person working for $11.50 per hour makes $23,920 per year and is closing in on the middle class. It would take someone earning $12.02 per hour to hit that $25,000 per year mark.

But if we raise the minimum wage to $15.00 per hour, someone working minimum wage full time would be getting $31,200 per year! Think how great that would be! It would be like Shangri-La would it now because now anyone working full time, no matter how menial the task would have middle class income and could afford to have a decent lifestyle.

WRONG! You forgot about that ‘middle’ part. If you more than double the minimum wage, you also have to more than double the lower and upper limits of the middle class. Middle class income would now be people working full time and getting paid in the range of $51,724 and $206,896 per year. “How do you figure that” you ask? If you more than double the minimum paid to employees in some cases, you still have to be profitable and protect your profit margin. Therefore you have to increase the retail price of the products or services you perform. Those who are skilled workers making $15.00 per hour now will not accept being paid the same as unskilled workers resulting in wage increases for them too. Their supervisors who now make the same as those they supervise will demand more. The chain reaction will rise all the way up.

This is demonstrated by the business owner of Gravity Payments in Washington State who put in a plan to raise all of his employees to a minimum of $70,000 per year. The initial reaction to his announcement by his employees was positive, but then some of his employees realized that they were going to be paid the same as the unskilled workers. Now, only five short months after implementing his plan, the company is in trouble and will probably close down due to being no longer competitive. Also, many of his employees have quit. The owner failed to consider one important fact, those who have work to get college degrees or some other higher education didn’t do so to make the same as the janitor. I am not saying there is anything wrong with being a janitor; I am saying the position does not necessitate a four year degree.

The second consequence of raising the minimum wage to $15 an hour is for a moment in time those earning the new minimum will have greater buying power, but then with everyone else getting raises to keep things in status quo and prices raising to protect profit margins, the buying power of that $15 per hour will be right back where it was as consumer goods all double in price.

Think about it.

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About The Rural Iowegian

I am the Rural Iowegian of www.ruraliowegian.wordpress.com a published author and an award winning photographer. I use this space to speak my mind. God Bless.
This entry was posted in Nourishment For The Soul, Soap Box, Sociology, Writing. Bookmark the permalink.

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