In the minimal wage opinion piece we will address the following: What is minimal wage? Why there is a minimal wage? What is the different forms of minimal wage? The Angelic Scorn website suggest minimal wage for the USA federal government.
What is minimal wage?
A minimal wage is the the lowest wage permitted by law or by a special agreement.
Why there is a minimal wage?
The purpose of a minimal wage is to insure that employers does not take advantage of employees, by under paying them. Minimal wage can also be used to decrease the wage gap between the rich and poor, insure the purchasing power of the general public and to combat the negative effects of tax and inflation on the poor. A fixed minimal wage should be adjusted to real inflation and tax that effect the poor every year, where as minimal wage as a percentage adjust to inflation automatically.
What is the different forms of minimal wage?
Fixed minimal wage, labor union minimal wage, flexible minimal wage and a minimal flexible minimal wage.
Labor union minimal wage: A labor union minimal wage is a wage agreement between a employer and a labor union. This is limited to specific areas of employment.
Fixed minimal wage: A fixed minimal wage is a fixed number set by a federal or state government, no employee in that federation or state maybe paid below that fixed number. The problem with a fixed amount set by a federation or state is that it can be several years before that number is adjusted, resulting in that number losing value with each passing year. On many occasions, once this number is adjusted it tent to lead to inflation and businesses closing down, because the business was not set up to cope with the sudden increase of employment cost or the increase is just supply to high for specific types of businesses.
Flexible minimal wage: The flexible minimal wage system is currently not in use. The idea behind a flexible minimal wage is that wages is paid out from a percentage of turnover. Most employees do not like a flexible minimal wage because their income changes from pay check to pay check. However a flexible minimal wage has benefits build into it namely; It adjusts according to inflation with out government action, during a economic down turn the percentage a business has to pay out in wages remains the same reducing shut downs and firings, It allows start ups to establish themselves with in the market more easily, it discourage employees from stealing, and encourage employees to push sales. A flexible minimal wage also has some negative aspects to it namely: The employees income is not stable, businesses can over employee to give better service, but as a result lower wages, the business can over pay senior staff and under pay junior staff.
Examples of a flexible minimal wage system: 40% of all services must be paid out to employees, 10% of all sales generated from goods must be paid out to employees. This is how it works in practice. You take your vehicle in for repairs, you are charge for labor, the new parts and new oil. The labor charge is a service so 40% goes to the employees, the parts and oil is goods, thus 10% of that turnover goes to the employees. Here is another example, you go to a sit down restaurant, on your tab is the cost of your meal and drinks, calculated into the cost of the meal and drinks is a 10% service charge of which 40% goes to the staff and it includes the sale cost of the food of which 10% is paid out to the staff. The reason it is added to the price of the meal is because most people do not give a little extra to the waitron if the serve charge appears on its own, they just automatically assume that the money will go to the waitron.
Minimal flexible minimal wage: As far as we know this system is not currently in use. South Africa attempted to interduce a minimal flexible minimal wage system, but it was met will strong opposition. The reason for this is very obvious, the South African government in the past wanted to keep the fixed minimal wage the same and add that 40% of all turnover after tax should be paid out as employee wages. This would have resulted in massive inflation, which would not have been a problem because the wages would have been higher but, it would have led to mine closers, farms going bankrupt and a exports collapse, because their prices are set on the international market not by the local demand and affordability.
So what is a minimal flexible minimal wage system? This is when a federation or state combines a fixed minimal wage system and a flexible minimal wage system. The main purpose is to push-up wages while preventing over employment and business closers. The employee is paid the greater amount, if the flexible minimal wage is higher then that amount is paid to the employee, if the fixed minimal wage is higher then that amount is paid to the employee.
The South African government made the mistake of combining all types of employment under one roof, they should have instead divided the flexible minimal wage into different business sectors. A business like a lawyer firm, insurance company or software company can easily pay 40% of their turnover after tax to employees, while a business that sells physical goods will have to push up prices but that will automatically increase the wages because its a percentage not a fix amount, however exporting companies, mining firms, and farms can not, because they will be unable to produce income from abroad, reason being their running costs are to high to compete on the international market.
The Angelic Scorn website suggest minimal wage for the USA federal government.
We suggest a Minimal flexible minimal wage system for the federal government. In the USA the states has thier own minimal wage, but those wages has to be equal or higher then the federal minimal wage.
We suggest that 40% of all service turnover must be paid out as employee wages and 10% of all none service sales should be paid out as employee wages. The wage amount paid out may never be lower then $7.25 per hour.
What is minimal wage? // Why there is a minimal wage? // What is the different forms of minimal wage? // The Angelic Scorn website suggest minimal wage for the USA federal government.
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