Minimum Wages: An Economic Story

Chapter 1: My name is Louis

Early in the morning, Louis woke to fill his shift at work. The supplier that he worked for had three shifts that alternated through the day, each filling a third of the 24-hour period. It was a difficult job, since, on occasion, employees would quit and Louis would be called on to fill another shift. Though taking the extra hours meant that he would receive extra pay, it was almost unbearable spending that time to continue the grueling regime. More than once, he thought about quitting.

But the job was better than most. He made nearly $12 an hour, which was much more than his brother-in-law made working in the fast-food industry to support his band. There wasn't much success in his family, his parents having kept the same jobs from their youth and never reaching the highest positions, but managing to secure a pension. However, with those jobs they had managed to get by and put money on the table.

The drive to work was easy that time of day. There was no traffic apart from the others who had similar jobs. They drove together on the empty streets in their used cars, though some had managed to make room in their budget to purchase new cars. Flashy and sleek, they spurred down the road as Louis puttered along. He sometimes mocked the newer cars, since that really wasn't what he wanted. All he wanted was to travel and see the world, something he had dreamed about as a child, though the money never seemed to come.

As he pulled into his parking place, locked the doors and meandered to work, he could hear the commotion already starting.

"Everybody!" the floor manager spoke, "Calm down. Everybody! Please!" His voice was frantic amidst the arguing employees. It seemed that word had broken out and the manager was pushed to make an announcement earlier than he had anticipated. It took some time before silence fell over the huddled mass. "I'm sure you're all aware of the new legislation that has required employers to pay you at least $15 an hour," some of the men clapped while others anticipated what was coming. "That being said, we currently don't have the budget to maintain all of you, nor can we guarantee that there will be a place for you in the future," the manager struggled to continue as a flurry of profanity flung through the air. "Listen! We will, however, keep those of you who we cannot afford currently on temporary leave. This means that, in the future, if there is a position for you we will call you and you can come back to work. For the rest of you, you will start making $15 an hour as soon as the current pay period ends. I have the names of the crew that will be placed on temporary leave in my hand. You can still work today, if you want, or you can head home. Either way, we wish you the best and good luck." With those words, he concluded the announcement and began reading off names. Constantly, almost unceasingly, names were called. Half of the morning crew had been let go, and suddenly, Louis had as well.

The trauma of the event was unbearable as he placed a hat over his head and went to work. Every cent would matter now. How was he going to afford rent or food for that matter? Food stamps hadn't helped very much, though it managed on occasion when he couldn't split the bills well enough. Debt had piled onto his credit cards from this or that, little trinkets which he wondered he if really needed immediately after purchase. It seemed clear which the correct answer was. Hours seemed to fly by until the last hour ticked by. He was out of a job.

He drove back home in the dense traffic that had accumulated throughout the day, spending nearly thirty minutes clearing and gaining new frustrations in his car. Nearly, tears welled from his eyes as he walked to the door. He lived alone and there was no one there to share his grief with. Tomorrow, the job hunt would begin for the second time in a year.

As his keys struck the table, the empty apartment seemed less full. The furniture that he had bought on-line failed to fill the void that the feeling of losing a job brought. The room was dark as the electric buzz cast light over the small, one-bedroom apartment. Clothes had piled up in the corner and dishes in the sink as he decided that now would probably be a good time to get that done. There was little more to fill his day as he couldn't face his friends having lost his job. It would only be a matter of time before they found out, but it was something that he felt that he could put off.

Chapter 2: The job hunt

The next day, Louis got on-line to begin filling out forms. Job postings online were abundant as he skimmed the requirements. This one required a college degree in computer science, that one required ten years experience. Each one caught his attention with the hefty salaries and benefits, though he couldn't fill the jobs. Finally, he found one that he met. A simple position similar to what he had been doing before. Filling out the application, attaching his resume, he smiled to himself as he continued posting for more positions.

Day after day, nothing came. If it had come, it was only to say that they had appreciated, well, who really cares then. His eyes swept over his email notifications, hoping that something would come up. An interview maybe, or even a phone call. Still, nothing happened. By the time the first unemployed rent payment came, he was hurting. Dipping into his savings, he pulled the $600 dollars that his rent cost. He figured he could survive for a few months still on unemployment, but his savings would eventually run out.

Over the years, his parents had tried to teach him to save nearly 10 percent of his income just in case something happened. It was something that had always been taught, something that their parents had managed to do for quite a while. However, living in an apartment alone was not cheap. In the normal week, he would only make $480, making it nearly $2000 a month. With rent being only $600, it seemed reasonable. That is, until you consider that utilities was nearly $80, food and going out to eat was nearly $400, then there was the car payment and credit card debt that needed to be paid off. Then there was gas and insurance. By the time he had finished, all he had left was nearly $300. When push came to shove, $300 was not a lot of money to survive on.

But he tried to live the practice of saving money, whatever he could even if it was small. He couldn't afford things like investments. That was something rich men did, not him. He couldn't afford a house or even going skiing over the weekend. But, he thought to himself, things should get back to normal pretty quickly. At the very least, he could get a job at a fast-food place. Perhaps his brother-in-law had a connection.

There was a ring on his phone, it was his sister Denise. She was a working mom as her brother-in-law attempted to meet his dream of becoming rich and famous. He often criticized them and they didn't have a healthy marriage. She worked at a grocery store where they had hoped to make enough money to support having a child.

"Louis?" she asked over the phone.

"Yeah," he answered, his voice tired.

"Everything alright?"

"Still looking for a job."

"Have you been applying?"

"Of course," he masked the anger in his voice. Certainly he had been trying to get a job. Anyone in his position, in fact, everyone in his position was looking a job. It didn't seem like anyone was hiring anymore, but he didn't want to upset his sister, she was likely dealing with the same thing. "How are things with you?"

"Fine, the extra money was helping for a little while, but our complex is raising the cost of rent so we have to move."

"You have to move? Why?" Louis asked, thankful that his rent was fixed for the next few months.

"Well," she started to cry, "I lost my job today." Louis couldn't help but feel empathetic. For him, it wasn't that difficult to manage, there wasn't much that he needed. He only needed a roof over his head.

"I'm sorry, Denise," he said. "What are you going to do?"

"We're moving back in with mom and dad for the time being, but I don't know what else I can do." Denise's voice was weak as she struggled to voice her words. Louis could hear the crying baby in the background. "I love you, Louis, but I've got to go."

"Love you too, Denise," he hung up.

 The shock was nearly unbearable. It wasn't just his job, but now his sister's. Dozens of people were put out of work overnight and now Denise's rent was increasing. Louis imagined that his rent would increase as well soon enough, at least, if he could even make it that long.

He sat back in his chair as he stared at the phone. He knew there wasn't going to be a call. He had no skills for the jobs that were available and there were no options to get the skills. "Perhaps," he thought to himself, "I can do odd jobs around the block?" Quickly erased from his mind, he couldn't go back to acting like a teenager. That wasn't feasible, no one would hire him anyway. He rocked back in his chair as the boredom quickly reminded him to turn to the t.v.

Chapter 3: CPI

Louis sat stunned at the news reports that were already circulating, all covering the wage hikes that had spread over the country. Low income families were the most affected as layoffs were reported throughout the country. Unemployment numbers spiked as reporters spoke to company president's and consultants.

"The fact is, we can only hire as many people as can get the job done at a specified cost. When the cost goes up without an increase in profit, a decision has to be made."

"And the decision is to cut workers?" the reporter interrogated an agitated president.

"In this case, yes," he admitted.

"And you think that's good for the economy?" she probed further.

"It may not be good for the economy, but it's how business works." the president concluded as the news flashed back to the hosts.

"Seems a little short sighted, don't you think, Bob?"

"Absolutely. It's such a shame what they're doing to those people," Bob replied as Louis scoffed. It was always easier to sound sympathetic when you don't have to deal with the changes.

"Other news reports have shown that the price of everyday goods has been steadily increasing since the announcement of wage increases. With the price of gas increasing back to nearly $3.50 on average across the country, it seems that the recent increase in wages has had a negative effect on low income families who have suddenly found themselves out of work."

The news flashed to a woman who looked as though she was living on the streets.

"It's hard. It's hard for all of us who have been waiting to afford food or support a family. Without a job, I'm stuck."

The interview was short and quick, highlighting the detriment that was happening all over the country.

"Recently, the president made this statement in a press conference."

"It's a shame. It's a shame that company's would care more about profit than they would for their fellow man. In the end, that's their choice. But your government will keep working for you and make sure that every citizen is treated with the respect that they deserve."

The statement was nothing more than a line. Louis hated politics as he scoffed openly again, he quickly changed the channel. Plastered over every news station was the same reports, until he finally settled on a movie that was playing. It might not have been the most productive, but he quickly rose to his feet and went to the kitchen. Opening the refrigerator revealed the assortment of food that he had bought last week. Pulling open the freezer, he pulled a frozen pizza out and began preparing it.
His thoughts raced as he remembered thinking to himself how nice a pay raise would be, rallying behind a president who would be willing to offer such an enticing proposition. At the ballot, he remembered placing the vote that would eventually cost him his job. Frustrated, he slammed his hand down on the counter-top.

"Damn it!" he swore to himself as his emotions began boiling over. Things had began crumbling around him and there didn't seem to be anything that he could do about it.

Finally, as the evening wore on, he found himself curious. He turned on the news again, hoping, perhaps, to hear something that might interest him. Celebrities, actors and actresses, musicians and
philanthropists weighed their opinions.

"Companies are the ones who are doing this. It's their inflated checks to themselves while the rest of us are left to suffer. Why should they make millions why the rest of us have to starve?" One complained, Louis agreeing, though the he could hardly level with the wealthy musician who claimed to be "one of us", but before too long, it was back to the hosts.

"One of the other problems people are facing are the recent increase in housing prices. This time, it's not just affecting low income families, but middle class families as well."

"Well, we'd be saving for a house since we had our first child, but now we can't even afford the down payment for the asking price. It's like, the cost of houses multiplied overnight. I can't. I can't even contemplate it."

"Too build on that point, the cost of houses across most of the nation, included places like Los Angeles and New York, have increased by nearly 150% in nearly three weeks, with some places growing to nearly 300% of what they were in early January. Let's ask an expert for his opinion."

"Well, it's natural to see increase in prices when income increases. This is a result of people having more money to buy certain goods. To companies, it looks like an increase in demand, which is it in reality. More people have more money to buy things they couldn't afford. This tells the producer, 'Oh, you need to increase your prices because it's selling out too quickly. In order to maximize profits, you need to increase cost.' And that's what they are doing. The thing is, when this happens, everyone else realizes that the money they were making before is no longer good enough. That's when we see increases in the cost of things like housing, entertainment, and even produce."

"That sounds difficult to imagine how everything comes together so quickly."

"Well, Bob, they call it the invisible hand."

"It seems pretty visible now," Bob cut him off before continuing on with the next segment.
Louis stroked his hair as he watched the short segment on local murders and other accidents that occurred. Part of him wondered if continuing on would even be worth it, but the thought was brief, along with many others that came and went. Economics was something that he couldn't contemplate. Supply and demand seemed too far-fetched to him, something that almost seemed made up. After all, it seemed like economists were wrong more frequently than they are right. After all, on the news they are often criticized for not doing a good enough job.

As he sat there, he mind kept boiling over the prospect of not being able to find a job. What would happen if he couldn't afford food? Would food stamps still be enough?

Just then, the phone rang. It was nearly an ominous tone as he brought the receiver to his ear.
"Hello?" Louis answered.

"Is this Louis Smith?" the voice of the other end asked.

"Speaking."

"Hi, this is Stanley from Scott's Autopart Store. We got your resume and were wondering if you wanted to come for in interview?"

"Absolutely," Louis' voice exclaimed.

"Great, can you come in tomorrow?"

"Sure, what time?"

"Around 10 A,M is the appointment. We have some other interviews that we are doing, so be prompt."

"Alright, I see you then."

"Alright, take care."

When he hung up the phone, mixed emotions poured through his heart. On the one hand, there was the chance that he might be able to get a job. Plus, it paid at least $15 an hour, even though that was a minimum wage. But, on the other hand, they were doing other interviews. If there was an appointment, how many interviews could they be doing. After all, it was just a small store. It couldn't have been that many.

The noise of the television caught his attention again as the cycle continued from where had left off before. The expert reappeared on the screen again.

"So, how do they even judge how the economy is changing? I mean, there's something to track inflation, right?"

"Well, in a way. One tool we use is called a consumer price index or CPI. This basically says that for some assorted group of products, possibly selected at random, how prices compare to what we've seen in the past. What we're seeing now can be considered hyperinflation."

"And what's that?"

"It's normally identified as a dramatic increase in prices. Sometimes, this occurs because government prints too much money. That's not the case here though. In this case, the government has artificially spurred the money supply by paying low income families more. This, in fact, is like increasing the money supply since money that was "idle" is now trading hands."

"I don't understand."

"Well, put simply, it means that even if the amount of money in the economy hadn't changed, larger sums are moving around. This means that more money can be spent on more products, which means higher prices."

The segment seemed to continue, though Louis couldn't manage to follow the vernacular. All he could think about was the job and hoping that he would have a chance to get it.

Chapter 4: Labor Cost

The next day, as Louis prepared for his interview, his body quaked in nervous apprehension. He wore a suit and tie that he had owned for years that had never really been worn much. There was never an occasion for it. This time, he needed to look his best. He needed to show that he would be a profitable worker, that's what he had resolved to do above all else.

At first, it seemed like a simple plan, but his doubts quickly resurfaced. He worried about being to flashy and not right. Perhaps a more laid back approach would be better. Nevertheless, he pulled into the full parking lot and made his way to the door. As he walked in, the air was cool as fans circulated through the room. He walked up to the counter.

"I'm here for an interview. I have an appointment with Stanley," he told the cashier who directed him towards the back. As he rounded the corner, the faces of nearly ten or so people sat waiting for their appointment. Louis was only ten minutes early. Were they already so backed up? he thought to himself. They, too, were dressed in suits or handsome clothes. Some bobbed their knees as they waited, their heart beats seeming audible from where they were sitting. There were no conversations, or at least, none that Louis could hear.

He wanted to start a conversation. He was always a personable person, but the time didn't seem appropriate. They were all competing for the same job. If he was lucky, he would get it, but that means that he would be taking it from someone else. It was a difficult thought to process, until he realized that he had done it many times before. Every job, in fact, there must have been other interviews. There must have been something that the bosses believed that he could do better.

"Louis Smith?" the name was called from the door as ten minutes passed already. Heads turned as he walked in, the anxious eyes pouring over him looking for any flaw. Uneasily, he made his way through as he greeted the extended hand that led him into the doorway.

"Nice to meet you. I'm Fred," he started.

"Louis. Nice to meet you," Louis responded as politely as he could.

"It seems a bit hectic today. We've been doing interviews since eight this morning."

"So many?" Louis acted surprised, not actually having seen the people crowded in the hallway.

"Yes, sir. We've never received so many applications. Kind of took us by surprise. At the very least, we decided to take as many as we could."

"How many people are you hiring?"

"Just one," Fred replied. "Normally these are positions that have a pretty high turnover, but I doubt that'll be the case this time. We probably shouldn't be hiring any people right now anyway."

"Why's that?" Louis asked, perhaps his questions would give him an opening.

"Money problems. Costs are going up. Suppliers want more money which means we have to raise our prices. The problem is, we don't know how quickly to increase our prices. If we do it overnight, people may not come back. If we do it too slow, we might go out of business since we couldn't afford new products. Most people think that they can't afford new hires either, but, I'm betting on this to quiet down.  That's why I'm still hiring."

It became clear that Fred was the owner of the business. He personally wanted to do the hiring since it was such a risk. The person that would be hired had to produce results and someone that would generate profit. That's the direction the interview took. Though Louis had experience in automobiles and was used to moving things and dealing with a large inventory, the questions seemed vague and almost unclear. Perhaps it was Louis, but he left feeling unsure. Every piece of the interview from the office to the car was picked apart in his mind as he hoped for some minute of clarity that might offer some idea as to whether he had done a good job.

On the ride home, he noticed how high gas prices had climbed. Not just a little while ago they were nearly a dollar less. He grumbled as all the prices seemed to be climbing around him, even though he wasn't making any money any more. Louis grew more frustrated as he continued through the heavy traffic. Inch by inch, gallon by gallon, his heart began to race. Contemplating the hire prices of gas and how it affected his budget, he immediately realized how bad of a situation he was in. Even though he had been saving, there was little that he could do when his savings weren't increasing as fast as prices were. By this time already, his savings were probably only worth about half as much as a year ago. Hands on his steering wheel, he began to cry out of desperation.

His face salty as he pulled into the parking lot of his apartment complex. On the door, there was a notice that flapped in the wind. As he pulled the corner and began to read, it was just as he had expected. At the end of his lease, the rent would increase nearly $400 per month, almost double what he was paying. He tore the paper from the door and slammed the door after entering the apartment. He could hear the baby crying next door from the noise as he turned on the news.

"For three consecutive days, stock prices have increased dramatically. While low income families have taken a massive hit in the recent economic turmoil, investors seem to be just fine. Reports show that with decreasing interest rates matched by increasing prices, stock are a hot topic. As people rush to invest their money, prices have soared to new heights. Estimates show..."

Louis scoffed at the television. His fit of rage seemed appropriate as he sat helpless, hoping for any sign of money to come his way, but there was nothing he could do. Unemployment checks would be coming soon and he had food stamps. Surely, he could not have become one of these people over the past month. But it was true. He had been thrust into poverty.

Cooking at Home

Cooking at home is always one of those things that we, as Newlyweds, have always planned on doing. People who we know, including other newlywed families, may not have had this same agenda, or have simply not done enough to follow this plan. Yet, I still hear the complaints and the justifications just about everyday about debt.

As a newlywed, I have always heard of people trying to scrounge around for money because they just don't have enough, don't make enough, or just don't have the time. I don't come from a well-to-do family and only had about $1000 to my name when I started college. My mother was a single mom who worked for little pay, but she always said it was a good thing to treat your self every once in a while.

This is something that has stuck with me still, even as my wife and I take the time to save just about every cent we make. We keep a budget of nearly $80 a week for food. Why so high, you ask? The reason is because we don't really eat out. Occasionally we'll get a pizza or go out somewhere to try something new. We're not sitting at home eating ramen and rice all week. We're also not each $5 pizzas everyday. There are still ways to scrimp and save, but there's also a quality of life to maintain. Still, each week, we manage to eat things like cordon bleu, boneless chicken wings, and a lot of the rest of things which we adore.

If you calculate out the cost of creating the meals that you are buying from scratch, you'll find that you are mostly paying for the time of the cooks. The day I was sitting at home and was craving some boneless chicken wings, it didn't take long for me to get online and look up the nearest Buffalo Wilds Wings. There menu prices showed that it was somewhere around $20 for a large order of wings, which includes that there will be atleast 24 or something included (I once got over 30 on my plate!).

When I got to thinking about it, there was a bag of frozen chicken breasts in our freezer that we had bought for $8. I was trying to think about how many of Buffalo Wild Wings wings I could make from a single breast. When I realized that there was 7 wings that I could carve out of each breast and that there was 7 breasts in the bag, I became well aware that I was wasting my money. I busted out the pot and oil, went online for some wing sauce recipes, and started cooking. The first time I tried cooking these, it took well over an hour to finish, though were delicious. Recently, I've been able to prepare dozens of wings in nearly 15 minutes. That means I'm making the same meal for a third of the price! Now, I love Buffalo Wild Wings. I've found their service to be generally good and their wings to be delicious.

One of the places that I've loved to eat in the past is Olive Garden, mostly for the breadsticks that they serve; however, my wife and I have stopped going almost entirely. Why is that? The reason is that the cost of the meals, apart from the appetizers, are so expensive that my wife and I could make the same meals for nearly a half of a price, if not less! Occasionally, when we receive a gift card from family or friends, we nearly always get the fried calamari, something that we don't make or haven't made yet. The amazing thing is, people are paying out their eyes for pasta which they can buy for $1 at the store, maybe a little more for higher quality. But the thing is, after you prepare the same meal, you'll be able to do it at least one more time afterwards.

There are times when it is nice to not cook when family comes into town, or being able to have different meals when people have different tastes; but it shouldn't break your bank account to do it. I would just recommend looking beyond your first glance to decide to not waste your money. It seems that people accept these bloated prices out of convenience or the inappropriate justification that these are just what the prices are. In a sense, it's true that the prices probably won't change much just because you stop going to these places, but that won't be your problem anymore.

It's amazing how much food you can buy with the same amount of money that you eat out with, but I will say this, if I find a meal that I just can beat, I'll fork out the money. It just has to be worth it.