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EDIT TITLE: What Is The Wage You Pay Your Journeymen?
I know that there are two theories here.
The first one is to pay your journeymen top dollar. One contractor once told me of the real cost of a cheap sub.
The second philosophy is similar to Wal-Mart's strategy: Pay your employees as low as you can.
I worked for one contractor who paid a very low wage. Result? I didn't work for him for a long time and while I was working for him, I didn't put in as great an effort as I would working for a higher wage.
Another contractor that I know also uses this philosophy. He says that since the economy is bad right now, anyone would be happy to just have a job.
That reminds me of the minimum wage.
Many economists have studied how minimum-wage laws affect the teenage labor market. These researchers compare the changes in the minimum wage over time with the changes in teenage employment. Although there is some debate about how much the minimum wage affects employment, the typical study finds that a 10 percent increase in the minimum wage depresses teenage employment between 1 and 3 percent. In interpreting this estimate, note that a 10 percent increase in the minimum wage does not raise the average wage of teenagers by 10 percent. A change in the law does not directly affect those teenagers who are already paid well above the minimum, and enforcement of minimum-wage laws is not perfect. Thus, the estimated drop in employment of 1 to 3 percent is significant.
The minimum wage is a frequent topic of political debate. Advocates of the minimum wage view the policy as one way to raise the incme of the working poor. They correctly point out that workers who earn the minimum wage can afford only a meager standard of living. In 2005, for instance, when the minimum wage was $5.15 per hour, two adults working 40 hours a week for every week of the year at minimum-wage jobs had a total annual income of only $21,424, which was less than half of the median family income. Many advocates of the minimum wage admit that it has some adverse effects, including unemployment, but they believe that these effects are small and that, all things considered, a higher minimum wage make the poor better off.
Opponents of the minimum wage contend that it is not the best way to combat poverty. They note that a high minimum wage causes unemployment, encourages teenagers to drop out of school, and prevents some unskilled workers from getting the on-the-job training they need. Moreover, opponents of the minimum wage point out that the minimum wage is a poorly targeted policy. Not all minimum-wage workers are heads of households trying to help their families escape poverty. In fact, fewer than a third of minimum-wage earners are in families with incomes below the poverty line. Many are teenagers from middle-class homes working at part-time jobs for extra spending money.
I ask everyone to please take this question objectivelly. I have a feeling that the story of the cheap sub will appeal to people emotionally and they will say that this is the best method.
I know that there are two theories here.
The first one is to pay your journeymen top dollar. One contractor once told me of the real cost of a cheap sub.
The second philosophy is similar to Wal-Mart's strategy: Pay your employees as low as you can.
I worked for one contractor who paid a very low wage. Result? I didn't work for him for a long time and while I was working for him, I didn't put in as great an effort as I would working for a higher wage.
Another contractor that I know also uses this philosophy. He says that since the economy is bad right now, anyone would be happy to just have a job.
That reminds me of the minimum wage.
Many economists have studied how minimum-wage laws affect the teenage labor market. These researchers compare the changes in the minimum wage over time with the changes in teenage employment. Although there is some debate about how much the minimum wage affects employment, the typical study finds that a 10 percent increase in the minimum wage depresses teenage employment between 1 and 3 percent. In interpreting this estimate, note that a 10 percent increase in the minimum wage does not raise the average wage of teenagers by 10 percent. A change in the law does not directly affect those teenagers who are already paid well above the minimum, and enforcement of minimum-wage laws is not perfect. Thus, the estimated drop in employment of 1 to 3 percent is significant.
The minimum wage is a frequent topic of political debate. Advocates of the minimum wage view the policy as one way to raise the incme of the working poor. They correctly point out that workers who earn the minimum wage can afford only a meager standard of living. In 2005, for instance, when the minimum wage was $5.15 per hour, two adults working 40 hours a week for every week of the year at minimum-wage jobs had a total annual income of only $21,424, which was less than half of the median family income. Many advocates of the minimum wage admit that it has some adverse effects, including unemployment, but they believe that these effects are small and that, all things considered, a higher minimum wage make the poor better off.
Opponents of the minimum wage contend that it is not the best way to combat poverty. They note that a high minimum wage causes unemployment, encourages teenagers to drop out of school, and prevents some unskilled workers from getting the on-the-job training they need. Moreover, opponents of the minimum wage point out that the minimum wage is a poorly targeted policy. Not all minimum-wage workers are heads of households trying to help their families escape poverty. In fact, fewer than a third of minimum-wage earners are in families with incomes below the poverty line. Many are teenagers from middle-class homes working at part-time jobs for extra spending money.
I ask everyone to please take this question objectivelly. I have a feeling that the story of the cheap sub will appeal to people emotionally and they will say that this is the best method.
