Low-wage workers in the United States continue to experience the unintended consequences of the federal and state governments. Although politicians, regulators, unions and bureaucrats may have good intentions, their policies are hurting millions of these employees and causing a higher jobless rate for these individuals.
This is no more apparent after the Securities and Exchange Commission (SEC) announced a new proposal last week that would require companies to disclose their chief executive’s pay and compare that with their average worker. The recommendation is still part of two outstanding regulations by the 2010 Dodd-Frank Wall Street reform law.
It is argued by regulars, labor advocates and unions that this is a beneficial policy for shareholders because they can then conclude whether or not they are paying their executives’ too much. On the other hand, companies are making the case that this kind of endeavor costs too much money to compile and wouldn’t assist investors at all.
Here is an unintended consequence: CEOs could get rid of low-wage workers by closing down certain departments or operations that have plenty of low-wage workers in order to keep the ratio as minimal as possible. This could even lead to businesses refraining from hiring low-wage workers in the future entirely.
Meanwhile, over in Seattle, the government is considering increasing the state minimum wage from $9.19 to $15. The city council and the mayor are mulling over the move, but proponents at city hall say that it won’t be soon because it’s a major increase in a short period of time.
Businesses are already warning of the ramifications of imposing such a vast jump in the minimum wage. The liberal city doesn’t seem to understand that companies cut the low-wage jobs as part of cost-cutting measures and also increase the prices for their goods and services.
Washington, D.C. recently killed legislation that would force big-box retailers to pay a minimum wage of $12.50 for its workers.