At the time of this writing, the federal minimum wage is $7.25. This is the absolute minimum, and many states choose to have a minimum wage higher than this, 29 as of January 1st, 2015. Five states have no minimum wage, and two states have a minimum wage below the federal rate.
What exactly does this mean?
That means that any business, minus those seven, are forced to pay their employees at least the federal or their state’s minimum wage. This makes the lower leveled workers falsely more expensive than they’re worth.
Why is that nonsense?
It creates a gap between being unemployed and being employed.
The minimum wage is not $7.25, it’s not having a job. 1.9 million people are unemployed in the United States (not in the labor force, wanted and were available for work, and have looked for a job in the last 12 months).
I’m definitely not an economics expert, but I would put money on it that these damn near 2 million people would be willing to work for less than minimum wage to get by while continuing to actively seek a job.
Outsourcing is more inexpensive than hiring locally.
Say I have a job that needs to be filled for a business I run. That job requires next to no skills, minus very basic copy and paste skills. It only takes roughly two hours a day, so I don’t need a full-time employee.
I have two choices.
- I can hire a local student or whatnot part time a few hours a week and pay them the minimum wage, allocate a workspace for them or have them install monitoring software to ensure they’re working.
- I can outsource that job to a virtual assistant in the Philippines and pay her roughly $3 an hour. Before anyone claims that that is taking advantage of that person, it’s really not. They have a much lower cost of living. To put it into perspective, a pack of cigarettes costs around $1.15USD in the Philippines, and anywhere from $4.50 to $10+ in the US.
I’ve actually had this “dilemma” a few months ago, although it really was a no-brainer. I needed someone to do some copy and pasting for my eBooks and offered the job to a girl I know. Even though I knew I could have gotten the work done for cheaper, the offer was still on the table.
Of course, she took too long to let me know if she was in or not, so I hopped on UpWork (oDesk at the time) and found someone who did it at an incredibly inexpensive rate. It was definitely worth it, spending $40 a week and making $400 from that.
How can I get a job with no skills?
The minimum wage discourages employers from hiring low-skilled workers. Then how do those workers gain skills to become medium and higher skilled workers? They are not being given the opportunity.
Unless you call it an internship.
Because then you can pay 0 dollars an hour, which is perfectly legal. Seems legitimate.
Face it, a lot of things that need to be done aren’t worth being done for the minimum wage. After the skills are gained, the job can be done faster, for more money, and more work can be done in the same amount of time.
The very first time I detailed my car, it took me roughly four hours to wash, clay bar, polish, and wax. Let’s say I would have done it for $10 per hour, if it would have been someone else’s car.
The second time it took me a lot less time, and after a few weekends of detailing I could get it down to around an hour.
The first time I washed it, I would have made $40 for doing my car.
If I would have kept that rate, sure I could have done three or four cars in that same time, and made $40. But why would I keep the same rate if I had gained the skills and speed?
I wouldn’t. That would be stupid.
So gain some skills
It sucks getting your first job. It’s usually some mundane bullshit you don’t care about doing anyways, so you go through the motions. Luckily, you gain skills that can be used to give yourself leverage for your next job, repeat til forever.
Or just stay at the bottom and suck it up.