By Rick Ungar
Forbes, Feb 16, 2013
... John Mackey, CEO of Whole Foods—a well known libertarian who has been vocal in his opposition to other Obama supported programs such as the Affordable Care Act—sees the benefits of paying above the minimum wage. Reports CBS News, “According to Kate Lowery, head of public relations at Whole Foods, the average non-executive hourly pay is $18.63. Executives there have argued that higher morale, presumably in part because of better pay, leads to higher productivity and lower turnover.”
The same goes for retail giant Costco whose senior vice president and chief legal officer, Joel Benoliel, told CBS, “If you have the best people in the marketplace working very hard because they’re being paid better, you end up spending less on labor, not more. There’s a fundamental misunderstanding among many employers who focus on how little they can pay. Our philosophy is that we actually pay less for labor per hour when we look at productivity and sales per hour.”
Benoliel added “We’d all be better off in our country if the lowest-paying jobs paid enough for people not to be on food stamps and not to be on welfare when it comes to going to the hospital.”
...
However, what we do know is that the minimum wage has been around as a national imperative since 1938 and it does not appear to have done much damage while arguably doing a considerable amount of good. We also know that in terms of relative dollars, the value of the minimum wage today buys less than what it did in 1956. Indeed, had the federal minimum wage rate kept pace with inflation, it would now be at $10.56 per hour. Even with the President’s proposed increase the minimum wage to $9.00, a minimum wage worker would only be getting the buying power that he or she had in 1981.
What President Obama has proposed—a gradual increase over three years that would take the current rate of $7.25 per hour to $9 dollars—is so mild that it is highly unlikely to have a major impact on the overall economy while making a difference for those who turn in a 40 hour work week and cannot break out of the cycle of poverty. ...
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