Conscientious Capitalism: Is $20.00/Hour Unrealistic?

Minimum wage in the United States of America was first established in 1938 under the Fair Labor Standards Act. It was set at $.25/hour. It didn’t reach $1.00 until 1956. The Act initially applied only to those engaged in interstate commerce but was extended to all other hourly workers by 1966. My purpose is not to give a history lesson on minimum wage, but rather to open the conversation on changes that need to be made by corporate America.

The establishment of a minimum wage was based on the notion that employers would no longer be allowed to hire employees without providing fair compensation. One need not be a student of American history to know that for hundreds of years on these shores, people were owned and not provided any rights or guarantees of compensation for their hard work. Of course, the current federal minimum wage of $7.25 is below what would be considered poverty in the US. The federal government has essentially left it to the states to decide. Many have implemented higher wages, but 20 states have not. The district of Columbia has the highest minimum wage at $16.10 while California and New York City have implemented $15.00 minimum wages. The Office of Personnel Management has already established a $15.00 minimum wage for all federal civilian employees in the US.

It’s no wonder there’s a movement in this country, particularly by fast food employees and others employed in industries where workers have historically been underpaid, to “fight for $15.00” minimum wage. Their work while considered unskilled in some cases, is difficult and tedious. Is $15.00 unreasonable or unrealistic? The answer is clearly No! I believe it should be higher at $20.00 or 25.00 per hour. If one did the math, it wouldn’t in most cases, be the difference between net profits and net losses. If it was, then I would suggest there are larger issues that need to be addressed.

Two important ideas that are diametrically opposed are 1) a $20.00 minimum wage is not a livable wage and 2) how can the minimum wage be raised to $20.00, without raising prices or going out of business? I’ll start the answer by again reiterating that at $20.00/hour, someone having to work 5 hours to earn $100.00, is insane. The cost of rents, and products and services have increased exponentially compared to wages. Is it any wonder why so many companies are having a difficult time filling positions?

The great resignation as it’s referred, was precipitated by the pandemic. There were many who saw the fact that people were collecting unemployment and the extra stimulus money, as a bad thing. Too me it was about people realizing that they no longer wanted to work for peasant wages. Even with the extra money per week, it was barely a livable wage. If people were being paid fairly, then the extra stimulus money would have been just enough to help them get by. It should not have amounted to what was essentially a pay raise!! Clear Proof that millions of American are underpaid!!

I’m not left leaning when it comes to business, but I am practical and a realist. We need to improve our system so that it ensures everyone, legally able to work in this country, is rewarded accordingly. It’s Conscientious Capitalism and needs to be adopted by all large corporations. Historically, profits have been only about shareholders. And there’s no reason they shouldn’t remain the focus but with the people who make profits possible, sharing in that success. Some companies are doing better in compensation and overall quality of life for employees, but not enough. A $20.00 minimum wage would lead to even greater profits while meaningfully, helping people emerge from poverty.

In sailing, we have a saying that high tide floats all boats. The same should apply to businesses and their employees. We can’t continue from the premise that unskilled workers are expendable and that only shareholder’s matter. If we’ve learned anything from the pandemic, it’s that we desperately need people to work so companies can continue to thrive. I’m arguing for a fair and livable wage for some of our most important and underappreciated workers. It may take some adjustment of thought, particularly in the C-suites but in the end, it will benefit them as much as those most in need. It might even transform the country into a better and kinder place. It also might mean record profits are forfeited, but it’s the correct thing to do. Conscientious Capitalism should become viral terminology for all, “for profit” companies.

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