Wednesday, September 1, 2010

Minimum Wages and Union Wage Scales

When employers hire, they pay what a worker is worth. If he or she is not worth the minimum wage, the boss will not go for it. Whether that wage is $10 or $2 an hour. Raise the wage too high and it is more likely that employee will be priced out of the job. If an employee is truly needed, he or she will get what value that person has in the employer’s estimate.

Union contracts for higher-wage employees are always adjusted upwards from the minimum wage, so the employed on the top are the ones who truly profit from the minimum wage increase.

Potentially lower-rung employees, subject to minimum wages, often never get hired, because they have little skills and are thereby too expensive to employ.

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