6.
Minimum Wage is Actually Higher than $5.15
The minimum wage today is officially $5.15. But this understates
the rate. Employers have to pay not only the $5.15 per hour in wages
for employees but other legally mandated payroll expenses as well.
The most significant of these is FICA which runs 7.65% of the wage
(6.2% Social Security and 1.45% Medicare), amounting to $.39 per hour.
(This is separate from the deduction from the employee's paycheck.)
Also, the employer has to pay federal unemployment insurance of .8%
and state unemployment insurance in Georgia of 5.4% ($.04 and $.27,
respectively) and worker's compensation insurance which varies greatly
from industry to industry (about $.10).
Therefore, the
minimum
minimum wage is at least $5.85.
And the minimum effective wage for many employers
includes not only these legally mandated expenses, but also company
benefits such as employee discounts, uniforms, health insurance, etc.
Many people would mistakenly retort that they don't care what employers
have to pay because "they have so much money anyway." But, this sort
of anti-management attitude is self-damaging. Employees should care a
great deal about these employer expenses, because they are part of the
process of deciding how many workers the employer can afford to hire!
For an employee to be hired his production must generate enough revenue
to cover all of these costs. So the question is not whether someone's
labor is valued at $5.15, but whether their labor is valued at the
minimum
minimum wage of about $5.85 per hour. If there is any remaining doubt
that some people's hourly labor is not valued at $5.15 to an employer,
we are reaching a level of pay expense where it is obvious that some
workers are just not productive enough to warrant being hired.
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