I know I posted an article a while back that was PRO raising the minimum wage, but I think enough time has passed for me to revisit that idea. --Actually, at teh moment I can't find where my article went, so maybe I started to write it and changed my mind. The gist of that argument was that if we raised the minimum wage now, there would be a temporary period where the market needs to catch up. During that time period people would be able to catch up on their expenses and hopefully cut down expenses for when the market caught up to the new wage. --I didn't at the time think that it was a long-term solution, but it could potentally solve some short-term problems that drag down the long-term.
One drawback I imediately saw to the article was the timing of it, so that might be why I deleted it and never posted it: The economy has improved. Not only statistically, but I can see a lot of things that are different now that make me optimistic about getting a job if ever I need one. When I was young (in 2007) and couldn't find a job that would pay the bills, I complained. But now that I'm older and more stabilized, I realize that I can live on so much less (we're talking $300/mo + rent). I realize that rent is relative, because right now I cost-share my rent between 2 other people and 1/3rd comes down to about $450. It's an awesome setup, close to the freeway and downtown shopping, low crime, great area all around, but I also realize if I Wanted more I would have to pay more...like if I didn't want 2 roommates I could get a place for 2x as much ($900 would cover a 1 bed 1 bath dog friendly place I bet). Either way, 900 + 300 or 450+300 = 750 - 1200 ---I don't like putting this out there to the world, but in order to make a point I guess I have to get a little personal now and again. 1200/mo divided by 4 weeks a month 40 hours a week comes down to $7.50/ hour, which is close to the minimum wage.
Of course, I'm not working at the minimum wage, nor am I working 40 hours a week, because I've managed to streamline my processes and become efficient in making money. I work maybe 20 hours a week if that and often debate if I should be looking for more work or not when I'm comfortable and happy and the funny thing is that maybe 16 hours of that is spent at a low paying job that I could easily replace but choose not to because I like it there. My stress level is at an all time low when it comes to my financial concerns, and that is what makes me think that the economy is good again--well, that and the fact that I have several job offers on the table right now, all of which pay more than $7.50/hr (haha)
Even still, there is some hubub about raising the minimum wage going around, and I think I need to revisit my original PRO stance for it. Aside from it not being the right time to raise the minimum wage, I think we need to consider that the problem is not with the minimum wage. The problem is with the rising inflating dollar. --Our cost of living has risen due to changes to western culture (the need to have a cell phone now for example), and the rising cost of rent and other expenses.
Rent has been rising for what I see as two reasons: market demand, and capitalization. When the demand for rental units rose from 2007 and people opted not to own their own homes or could not afford to, capitalists swooped in and bought up the rental market and started renting it out. In other words, if you survived 2007 you decided to invest in real estate rentals because of the assumption that everyone will need to rent at some point in time. Rentals charge more than houses do because of the cost + profit model of pricing (you buy an investment, you want to make money, so you charge what it cost you [i.e. your mortgage or the lack of money you suddenly have] plus you tack on some profit.) Automatically, if you are renting, you are paying the mortgage of another plus some, so if you could afford to get the mortgage yourself, you would be cutting back expenses. That's how capitalism works: you pay the loan on the equipment to produce the goods, plus some for profit.
The other reason rentals are so high is the variablilty of these capitalists--some are paying more on the mortgage and if you have a better loan, you are essentially more efficently making money, so why not charge the same price as your competitor who has a comparable rental and net more profit?
Rent is maybe the biggest expense of everyone when it comes to cost of living. In other words, if you can lower the cost of rent, the cost of living with definitely go down. So instead of raising the minimum wage, wouldn't another alternative be to lower the cost of rent? Maybe the federal government could offer refinancing options to landlords who meet a certain criteria, part of which includes the agreement to lower rent for X years?
More on this later....
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