No doubt you’ve heard it said: “You get what you pay for.” There are exceptions to this rule, such as a beer or a soda at Shea or Yankee stadiums, where it’s nearly $7 for a beer and $4.50 for a bag of peanuts. But the guidance to that
If getting what you pay for holds any merit, the same would have to be said for the quality of labor in relation to minimum wage earners. Many people do not give much — if any — thought to this part of the population.
Chances are excellent that you don’t even know anyone who is a minimum wage earner; if you do, they are most likely to be kids working part-time jobs during their school years. But they are out there, nonetheless, and in numbers. So why don’t we take a look at the minimum wage?
The federal minimum wage is $5.15 an hour. Based on an eight-hour workday, that’s just $41.20 a day, which on a five-day workweek is $206. If one were to work the entire year, taking absolutely no vacations, that’s just $10,712 a year. Forget about raising a family — with those numbers you could not even raise yourself.
Here in Queens an average studio apartment runs for $600 a month, or $7,200 a year. That would be just under 68 percent of the annual gross return on a minimum wage earner. What about utilities, transportation, food, clothing, telephone and medical expenses, to name a few?
The last raise to the minimum wage was in 1997. That’s a seven-year stretch without a raise. Can you imagine not having a raise for seven years? And here is something to ponder. Even with little to no inflation over this period of time, the purchasing power of the minimum wage earner has fallen by one-sixth.
Congress members, who ensure their own raises, will be very slow-moving on this one. In most cases they feel that if they give a 50-cent-an-hour increase they are being generous.
We are living in a different world today, where job finding can be quite difficult. A minimum wage should be based on a minimum cost of living. The minimum wage for business should be at least $6.75 to $7 an hour. That raise comes out to a whopping 31 percent to 35 percent increase, but in reality it’s only 4 percent annually (making up for the seven scoreless years). It’s needed, and it’s needed now.
Joe Palumbo is the fund manager for The Palco Group Inc., an investment company, and can be reached at firstname.lastname@example.org or 718-461-8317.