Need Min wage decision help.

As I have stated a number of times, I have many smaller businesses that I use to make my income. Generally the only thing that overlaps between these ventures is me and I only make money if there is anything left at the end of any given time period (say the year).

One of my ventures is small, only has two employees, one that runs the show, does paperwork, orders, deals with customers and clients. The other employee is far less educated, less savy, but a very hard worker. This business has been running on pretty much the same income for a couple years now and I don't see any major growth or loss in the future. We will just keep humming along.

To be honest, I only make a couple grand a year overseeing this venture and I could not take the time to to the tasks these two guys are doing for me. Here is the kicker. It is really not even worth my time and risk to oversee it, but since it does produce some money for me and I can keep two people working, I keep the business going.

One guy makes $1 over min wage and the other makes $10 over min wage (the office guy). These rates, as many of you know, are determined by the alternatives these folks have. I would pay them both more or less if the market says that is what the right rate is.

So if the min wage goes up, what do I do? I have a few clear options.

1. Raise prices to cover the cost - this will not work, I have already raised prices to the maximum possible viable point, that is my job and I did it already - setting the best price the market will bear. So this is NOT a solution as I will sell less and thus have to close as we are borderline right now.

2. Give up my pay to cover the increase - this will not work, I will loose the small incentive to keep the business going that I already said was just enough to keep me interested and from not doing other more profitable things.

3. Take the wage from the higher paid guy to pay the lower paid guy - this will likely cost my the higher paid employee as he was already doing his job and getting the max that the market will bear, he can simply go to another job and make his old rate if I lower his (geez unless all other employers are firing their mid and upper level guys to pay for the low wage guys).

4. Fire either employee and make the other employee do the job of both. This would only work if I fire the low wage guy, because the high wage guy can do both jobs, but the low wage guy does not have the office skills I need. With one employee, he will likely be overloaded and leave if he is not trapped by lack of other jobs. I could pay him the old pay for both guys, but this will only keep him motivated to work 60 hours a week for so long, plus I have to pay overtime and that creates the same issues as min wage, not enough money to pay for hours.

5. Turn these employees into independent contractors, train them on how to run their own businesses and then pay them the same rates I paid before. Now as their own boss, they have the right to make as little money as they want, even loose money. Some states have outlawed this (for example in MA, you cannot have a subcontractor that performs the same tasks you perform in house, they are AUTOMATICALLY considered an employee and subject to min wage etc.) and more likely will as this is a very simple way to get around some employee requirements. The strongest incentive to join this group is for very low skill workers, as they will be loosing jobs as a result. Someone will make money organizing these workers into their own firms. Perhaps that will be my next business, as there is lots of incentive to start it if they min goes up. I could help them start their own firms, get the low wage jobs and only take 10-20% as a fee.....all legally, even if they raise the min wage. I wont do this, but many lawyers will.

I guess the one thing I know I cannot do is simply raise the pay for the lowest paid worker in my company and expect there to be no other consequence. I cannot take it from customers, I refuse to take it from myself, I cannot take it from my higher level employees or I have to close the company.....Seems like I need to find better skilled people willing to work for the higher min wage and fire the low skilled ones that I can no longer afford. Seems like when the min wage goes up, that the only people that loose are the people that don't have enough skill to be worth anything at the new rate - the unskilled min wage worker will pay the price for the class of people just above them to feel more secure.

....or I guess I could find a way to automate this or eliminate the labor all together. Perhaps that is the idea of the higher min wage, to give incentive to employers to automate and get rid of low skill jobs all together.

We can debate the min wage, you cannot get blood from a stone and the people that will pay for the min wage is all the people that have no jobs, because it is legal to fire them, but it is not legal to pay them $5/hour. Employers must follow the laws and will choose firing over and over. Esp small businesses....which will be helped by this new policy as the larger companies that can survive on better efficience (read less employees) win larger segments of the economy.

Really as the min wage goes up, who do you think should be fired in society to pay for it? Or otherwise, what is the new source of money to pay them that did not exist until the min wage was increased. And please explain the process by which the money appeared to cover the costs of this damaging feel good process.

Perhaps I should just give up trying to be an employer and let these folks start their own firms, would they be better off? When you make it harder to employ, less will be employed.

A good example - you have 3 kids and a wife and a restaurant costs $10 a head, but then they raised it to $12 a head last night. You walk in tonight and have $50 to eat out for your family. How to you feed your family in this restaurant. This restaurant is what it will look like the week after they raise the min wage. You will leave or not feed one person...you will leave, the employer will not feed one person.

I really hope for the sake of the low wage workers in the US that we don't raise the min wage, because those currently working are making more than $0 and that will be their alternative when their current employers give up on them by law.

Or even better, why not have the fed govt pay the increases in wages and take it out of other people taxes. If the "people" are deciding who gets a raise through their elected officials, should they not pay for their own decision out of their pockets in stead of asking employers to fire/replace a bunch of needy people?

About the only solution I see is cutting hours. BTW, even if Obama doesn't get to raise the minimum wage of the US, Colorado will raise theirs.

Why didn't Obama increase minimum wages when he had a Democratic majority in his first term?

Cutting hours wont work, it will slow my production, I need the hours. I need to find more skilled people that can do the job in less time within the current employment budget. The price cannot be lower production. I need to find more skilled people, the min wage type will not cut it anymore.

I have already cut about 6000 hours from my annual employee budgets for other firms due to the affordable care health insurance law and that will likely double within a year. That has simply resulted in the loss of about 3 jobs to date, lower production, less profit, less market share. The bit of the market I am loosing is being taken up by big box stores. I am simply seeking ventures that are less based on labor and more on my skills, tools or machines. I am also subcontracting many more tasks for lower money.

Another thing I have done, which I used to avoid before, is that I buy less locally. As I have to come up with money to meet all the new laws and changes, I find that I can save money by buying things from Wal-Mart, Home Depot, etc. vs. the local lumber yard and stores. I liked the great service these companies would provide, but I can do the service part and just let the savings I get by not shopping with small firms allow me to stay above water. I can do this because these large firms find ways to do things also with less people and can save me money. Essentially I am saving my business form the results of all these increased employment laws by not only firing people, but changing my business practices so that other locals will loose their jobs too.

This is all by design. The rest of the posts in this thread will likely deny all this is happening or going to happen - even though folks would be wrong. These folks I have let go or reduced hours are pissed and likely wont last long as employees as a result - they now have a bad attitude and I don't tolerate that at all. This stuff is rippling though my small businesses like a tornado and in the end I will still be on top of something and a bunch of people that depended on my business are going to be SOL. Hope all the feel good people feel good, actually I hope they get their hours cut and get fired so they feel the consequences of their pushing the govt to ruin jobs.

Cutting hours does not work or we employers would have cut them anyway to save money. Cutting hours is like skipping a meal to save money. It does not add up in the long run. Plus if you are saying cut hours and hire more people, oh my goodness, the more people, the more chaos, without any laws, there are already many incentives to employ the fewest number possible with the greatest hours.

This is one of those things where the employees have no idea how fragile their jobs are - so they screw with them - I hope everyone is ready for the consequences. It will hit everyone company, every size. It will only help you if you own the larger companies, otherwise you will loose.

Replace the current employees with more capable ones who will work for less. Luckily Obamanaomics has kept available a large pool of unemployed to fill jobs.

Per my company, we are hiring people for less money who are more experienced, educated and capable than the managers they are working for.

Exactly...that is the plan on the ventures I don't give up on. I have already done that to some extent. This is what min wage increases do, make us fire those that needed the wage in the first place and replace them with someone who needed no wage protections anyway.

I write this so that people hopefully stop asking for others to be fired via govt policies. Adults can arrange their own employment relationship without help.

If the min wage was justified, why stop at $10 or $20 or $50, let's fix everything everywhere with $100 wages.

Anyone who argues that the min wage is good, should at a minimum be able to clearly explain why the rate they want is better than $2 less or $10 more. If you cannot explain this, you don't understand how the process works. You have 3 options.

1. the lower the wage goes, the better everyone is because.
2. the higher the wage goes, the better everyone is because.
3. there is an ideal min wage and being at that point is better than anything higher and lower because.

The trick is in the because. So anyone pick 1,2 or 3 and explain why that is the best. Obama is in #3 camp, but has not explained why 1 and 2 are not better, esp 2.

Real reason Obama is now advocating increasing the minimum wage when it has no chance of being approved? To placate his union fans. Many union wages are determined based on minimum wages.

I am actually addicted to business. This can benefit those that want jobs. I literally want to do everything. I am in small manufacturing, retail, breeding, construction and more. I have faced at this point that I will only accelerate. Sympathize for those that are working anywhere near the min wage or for anyone with a "job" vs. my problem.

My issue is not too many businesses, that is literally what employees are for, to do the things that I cannot do myself, thus I hire.

My issue is how to allocate the limited amount of funds that I can convince people to trade to me at any given time for a particular product or service. Once I have those funds, as a owner/manager, it is up to me to allocate those. As I have optimized most aspects of my businesses for the current conditions, I am looking for advice from those that want increased mandated wages as to who or what I should take those funds from. If the solution is to fire a bunch of people and concentrate my efforts, that does not solve my goal of not firing or reducing others wages, but alas, to increase one person's wages, I need to either take from another or start yet another more profitable business to float the now less profitable one (unlikely).

I am focused on the employees in such a transition, my addiction will take care of me in just about any environment.

I think it is childish (for us as a nation) to talk about the min wage without first recognizing that it is not an increase, it is a forced reallocation of resources, thus we must also discuss the party that is getting the proportional decrease....it will not be the CEOS, let's not even play that game - everything is paid for by customers and employees.

Also to discuss min wages without also restricting the importation of goods from lands that do not have such restrictions is actually a punishment of the low wage American Worker as high wages with jobs going oversees means no wages at home. I honestly cannot believe that we allow products that are not made under our labor standards of safety and wages to be imported. This should simply be outlawed. Then, we could tolerate great increases in min wages as all we would be doing is adding zeros to everything, but not adding value. This should be mentioned every last time the min wage is brought up, it's like building a house with a stocked kitchen and no bathroom, the shit will pile up.

I would say these times have been no harder than previous times unless you consider your only income option to get a job. All the "chaos" does make many opportunities for opportunists. This environment has fueled my desire to get into so many trades, there is a lot of "get your foot in the door" type opportunity that will go away quickly if the economy gets better. I know people have argued this before, but now is the time to start a business, beg, borrow and go. Make the money later, sow your seeds now.

Can you switch the employee over to piece work. I don't know what business you are doing so it is kind of hard to suggest different options.
It may even be possible to have your employees become sub contractors but then again that depends on what business you are in.