Of course you have. We all have. You may even be that guy yourself.
How much is that guy worth? What should he be getting paid?
If you answered, "Nothing - he really needs to be fired," welcome to Realville.
Now, have you ever worked with someone whose work was barely adequate? The guy who's constantly skating the edge, whose work is just good enough, who you can trust with the simplest tasks in his job description, but no more, who can't be asked to take on any extra work at crunch time? Yeah, you know him, too.
Now, some questions:
How much should your company be paying that first guy? We already answered that - nothing. He should be fired. Duh.
That's cold and heartless, isn't it? But he's actually costing the company money; they are losing money because of him. Why should any employer keep someone who's sending more money out the door than he's bringing in? If his sloppy work costs his company a net $25 every single day, why should they pay him any salary at all on top of that $25? Why should any employer deliberately lose money? If it cost a widget manufacturer $10 to manufacture each widget, would that employer deliberately price them at $9 each, knowing he would lose $1 every time he sold a widget? So why should he treat the cost of keeping that worthless employee any differently?
What about that second employee? The one who's barely adequate? Who's barely pulling his weight, but isn't about to get fired? How much should he get paid?
Well, that's a tougher one, isn't it?
Okay, I propose he gets paid a thousand dollars an hour.
What? What do you mean that's ridiculous?
If you pay him a thousand bucks an hour, he would have no financial worries; isn't that a Good Thing? Yeah, but his employer would have big-time worries, especially if that employer is a mom-and-pop crafts store that only employs ten people and has only about a thousand dollars in sales per day.
Okay, how about a hundred bucks an hour?
Still doesn't work; if the worst employee gets $100 an hour, and you have ten employees, your labor costs have eaten up all your $1000 in daily sales an hour after you open your doors.
Let's lose another zero; we'll pay him ten dollars an hour.
Okay, $10 an hour, times ten employees, times eight hours, gives a daily labor cost of $800, leaving $200 daily profit for the owner.
Not so fast. That's not profit. The owner is also paying to keep the lights on and paying rent to the landlord. Not to mention the cost of buying the merchandise he's trying to sell. That reduces his $200 down to zero profit pretty quickly.
Okay, how about five dollars an hour? That leaves mom and pop with $400 a day to pay for the costs of keeping the doors open; whatever's left over after that is their profit, from which they can pay buy their own food, clothing, and shelter for themselves and Bobby and Susie. After they've paid the tax man, of course.
The only problem is that it's illegal to pay employees only five dollars an hour. Even an employee whose work barely covers the expense of employing him in the first place.
Minimum wage laws say this: If an employee isn't bad enough to fire, his work is automatically worth whatever the minimum wage law says it's worth. President Obama says we should pay everyone $10.10 an hour. In other words, President Obama believes that the difference between an employee barely worth keeping and one barely worth firing is $10.10 an hour. There's no gray area. Our president is telling us that there is no work that is worth less than $10.10 an hour, that an employee who's one step away from getting fired is worth $10.10 an hour until his boss pulls the trigger and sacks his sorry ass, at which point, in an instant, he goes from being worth $10.10 an hour to being worth $0.00 an hour. According to President Obama, there is no such thing as an employee who is worth $9.90 an hour, or $8.80, or $2.20. Nope - if you're good enough to work at all, you're worth $10.10 an hour. Why? Because income inequality! Or something.
So while everyone with average intelligence understands that there are people who would be getting overpaid at ten cents an hour, our president, being the Smartest Man in the Room TM and therefore of far greater than average intelligence, is wiser than that, and understands that all work is worth at least $10.10 an hour. So let it be written. So let it be done.
So, what's going to happen when the federal minimum wage jumps from $7.25 an hour to $10.10 an hour? What happens when mom and pop suddenly find their labor costs have jumped almost 40%?
What's going to happen is that mom and pop are going to do one of two things - maybe both.
Thing the first: They'll lay off employees or cut back their hours, starting with the least-productive ones. The guy who was barely worth $7.25 an hour will find himself out of a job when, with the U.S. Department of Labor standing firmly behind him, he commands $10.10 an hour. "Sorry, Fred, you were barely worth keeping at $7.25 an hour, so you sure as hell aren't worth keeping at $10.10. Good luck and write if you get work!"
Thing the second: Mom and pop will raise their prices.
You know who won't raise their prices or lay anyone off, if your
WalMart. Evil WalMart.
Because we all know that Evil WalMart makes billions of dollars in profits, and Evil WalMart can afford to pay more without laying anyone off and without raising prices. So when the minimum wage goes up to $10.10 an hour, Evil WalMart will suck it up and pay.
Meanwhile, mom and pop will find they can't afford to pay $10.10 without raising their prices, so that's what they'll do.
And rip their hair out in frustration as they see their loyal customers start shopping at Evil WalMart.
And when mom and pop, unable to compete with Evil WalMart, go out of business, they, and their remaining seven employees will all head for the unemployment office. And the TV news will report that "unemployment remains stubbornly high as the economic recovery shows no sign of strengthening..."