money.jpegTomorrow, the minimum wage will increase for the first time in ten years. It will go from $5.15 an hour to $5.85 an hour.

Did you guys even know what the minimum wage rate was? Did you realize it was so low, or high?

Employees who are at the bottom rung of the economic strata make minimum wage. Now that doesn’t mean most of those people who make minimum wage are poor. Many young kids who are from middle class, or upper middle class families take in that much for part-time jobs but many of them do not support their families. The majority of individuals living on the wage are poor, or damn close to it.

It’s a difficult situation. Raising wages can end up hurting some employers. But how do you raise the living standard of so many people if the wage stagnates for a decade. Home prices and oil prices have exploded. Is there just a segment of our society that alas will forever be locked into a poverty vortex never able to emerge?

Adam Smith, considered by many to be the father of capitalism, was a big supporter of free trade and allowing businesses to do as they please when it came to running their firms and paying their workers. But even he had his soft spot for the less fortunate among us.

One passage from Smith’s writings that is often quoted on the matter finds him open to government regulation when it came to reducing poverty. “When the regulation, therefore, is in support of the workman, it is always just and equitable; but it is sometimes otherwise when in favour of the masters.” He didn’t take kindly to the notion that an employer would do everything he or she could to keep wages down.

The trick for businesses is to find the right balance. Easier said than done I know!

[Slashdot] [Digg] [Reddit] [del.icio.us] [Facebook] [Technorati] [Google] [StumbleUpon]