Salary Requirements

 Salary Requirements

The federal government increased the national minimum wage in January 2007. In places where the minimum wage had already been increased months prior to congressional intervention, this was old news. The rise in the cost of labor, however you slice it, will affect the business environment and the way companies make critical decisions in 2007 and beyond.



Raising the minimum wage ought to have no practical effect on the economy. The company has likely already accounted for inflation, so this should be a straightforward adjustment. Wages of workers should naturally rise to match the upward slope induced by inflation, since it increases the cost of commodities and the prices that businesses charge.



You can be more or less inclined to see the minimum wage hike favorably depending on whether you're an employer or an employee. Increasing staff expenditures have a negative impact on the bottom line for employers. Employers who pay their workers a living wage are only being competitive, in the eyes of the employee. Being a business owner or operator while also supporting family members living on the federal minimum wage puts you in a difficult position to take a neutral stance on many issues.



This increased pressure in salaries has the greatest impact on small enterprises. The cost of retaining employees can skyrocket for businesses that rely on low-skilled, low-paid labor due to wage hikes that are mandated by the federal government or individual states. Companies running on a tight budget often find that even a little shift in expenses can have a devastating effect on their ability to stay in business. The small business model is also quite competitive, so there isn't much wiggle room to charge clients and consumers more money without losing business to bigger competitors that can afford to keep costs low even after the minimum wage hike.



Congress has been hesitant to raise the minimum wage in part because of these worries. There is already a great deal of animosity toward companies that outsource their jobs to countries with lower wages in order to boost their bottom line. When a company is ready to move a large portion of its operations to a foreign country and pay that country's minimum wage and then some in order to recruit workers who are willing to work for less than that, you know that staff expenses are a major concern.



From the standpoint of the working class, it is difficult to fathom how this trend of outsourcing low-wage jobs can be reversed. Legislation aimed at halting the export of employment is not widely supported because we are hesitant to prohibit companies from taking necessary steps to remain competitive in the marketplaces. Although it could alleviate workers' hardships, it contradicts our stance on allowing capitalism and the free market to operate. When the free market is in charge, unfortunate individuals may be kicked out of the program.



Workers in the United States can fight off competition from low-skilled workers elsewhere by improving their own level of skill. They can enter a new market with the abilities they acquire from educational possibilities and secure a high-paying job that is unlikely to be outsourced due to the particular skills the worker offers. Thus, the government should refrain from intentionally suppressing the market to impede free trade if it wants to combat the outmigration of jobs caused by high employment costs. The wisest course of action is to train and educate our workforce so that they can compete with and even surpass their foreign counterparts in terms of value and productivity. This is the finest example of capitalism in action, and if this strategy is implemented, the result will be a more robust workforce, the preservation of American jobs, and a stronger national economy for all.

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