Career Calling

February 13, 2013

Raising the Minimum Wage and False Hopes

In his State of the Union speech, President Obama proposed a $9 minimum wage and that the minimum wage should be pegged to inflation.  It’s great that he made this statement, but, given the GOP domination of the House, this proposal is nothing more than an act of wishful rhetoric.

It also doesn’t address the bigger problem:  stagnant wages and wage cuts.  One of my clients has spent 20 years in the insurance industry.  Over the last seven years, her commission has been cut from 15% to 10%.  If she doesn’t hit a target, it can go as low as 8%.  The company she works for is very profitable (You know, one of those major corporations that pays little to know federal taxes).  The industry is also profitable.  So why the salary cuts?  More money needs to be pushed to the top.

I think the minimum wage does need to be raised.  I also believe that the government needs to do more to spur job growth.  However, as long as workers are getting squeezed in what they are paid and not paid (benefits), the bigger problem will be a shrinking middle class and a larger class – the working poor.  Few politicians talk about that problem, and it will impact all of us very soon.

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