Minimum wage is an incredibly hot topic today. Activists asking for $10, even $15 dollars today to help “lift” the minimum wage workers somewhat out of poverty and provide them with a better lifestyle. Obviously, there are advantages and disadvantages to increasing the minimum wage. But rather that dive into whether the advantages outweigh the disadvantages, what is we went the complete opposite direction and tried something new.

My view is to instate Phase 1 and Phase 2. For phase 1, I argue for a $6 – $6.50 minimum wage. I believe that moving to that minimum wage will bring a better lifestyle for many people. I know what you’re thinking…”this guy is crazy”, but hold on, phase 2 is very important.

The reality is, you can only lower minimum wage so much until people determine that it’s not worth their time to work. For instance, if the minimum wage moved to $2 an hour, we can safely safe we’d lose almost all minimum wage workers. They would go on unemployment, most probably riot, and work black market jobs (ex. cutting grass, home renovation, car repair, maybe even some illegal jobs, but work that essentially cannot be traced). The balance needed then is to make a minimum wage high enough to entice people to work but not motivate them to view MWJ (minimum wage jobs) as a long term working career.

See the issue is, at $15/hour for minimum wage, many people will no longer be interested in degrees and trade schools to learn. Why would students waste 2-4 years of school, debt, and headache when you don’t have to learn anything and make a decent living?

So phase 1 is to lower the minimum wage to $6 an hour and remove some unemployment benefits. I believe that we will lose around 70% of the workforce. The 30% left will mainly consist of the people who are retired but work for fun, and the 16-19 year old’s, who work because their parents told them to get a job so they learn how to manage money. For these groups, moving from a $7.25 to $6/ hour minimum wage doesn’t really impact them. The kids might not be able to purchase Fortnite V-bucks for 1 week, but that might be the extent of the damage there.

Phase 2 is really where this idea starts to make sense. Phase 2 is all about the empowerment of trade schools and certificate degrees, and the yearly adjustment of minimum wage for all trade work to create jobs for the estimated 70% of people who would leave their current minimum wage job.

I want a government dashboard that keeps track of all professional trade jobs and jobs that require certificate degrees. The dashboard will show the number of people working in a specific field (ex. welding); which we refer to as supply (S). The dashboard will also include a 3 year outlook for where the economy sees jobs needed; which we refer to as demand (D). The minimum wage is then adjusted based off the difference between S and D to either attract or repel people into that specific field.

Let’s take Welding as an example. The dashboard would show that in 2021: 415,000 people worked in welding jobs, and the average pay was around $20/hr. But that in 2022-2025, welding companies and supplies see an increase of orders that would take the total aggregate of workers needed to 600,000. Then the minimum wage for welding would need to increase to let’s say, $23, to entice enough to people to match the upcoming demand.

We can also take another example on repelling workers. The dashboard would show that in 2021: 300,000 people worked in accounts payable (AP) jobs, and averaged around $20/hr. But that in 2022-2025, with the introduction of accounting software and automation, the amount of workers needed will drop to roughly 200,000 . Then the minimum wage for AP jobs would need to decrease to roughly $15.

This 2 phased approach works tremendously ONLY well when employers and schools are linked very closely. People transitioning from one job to another need to be assured that will have a job and therefore companies should be willing to work with schools to provide funding and communicate open positions so that workers can rest assured that they will have work. Trade schools like welding take roughly 6-8 months, and so if a worker is moving into welding, we will need a sponsor to help him/her through that stage of learning and into a job that has a growth in demand. Schools should be monitoring the number of students moving into a specific role to ensure that no one job is being oversaturated.

This is how we continue to make our economy stronger. Having this agile system allows us to always have the talent and resources to manufacture, keep jobs here in the US, and having skills to ensure that no economy can overtake us.

We can talk all day about the effects of increasing minimum wage, like how many people won’t have jobs anymore, or how their schedule will drop to part time, or how inflation could make your $7.25 more valuable than you $15. But i truly believe that the biggest damage is the loss of motivation to learn and therefore the loss of skilled workers in our country.

Real life example: During my time at community college, I would a range of minimum wage jobs. In fact, so did most of my friends too. We were all broke, but had enough to sometimes buy the deluxe ramen and maybe if we felt fancy, a trip to Steak & Shake. In our friend group, we had 2 ladies who worked at Costco. Well Costco was paying them upwards of $15, and for us, that was like CEO money. The two ladies lived in better apartments, could buy things we couldn’t, would dine in better places, and always had gas in their tanks (that’s how measured rich friends back then!). However, both didn’t like school too much, they lived better lives than everyone in the friend group. They knew that every few years, they’d get a couple dollars an hour extra, and to them, that justified reducing their class schedule from full-time to part-time, to eventually dropping out completely. The rest of the friend group played the long game, going on to get bachelors, masters, certificates and working at reputable firms and companies, with great compensation packages. Our two Costco friends, still work there making roughly $45k a year, a far cry from what we make. And the longer our careers go, the larger the compensation will grow. What’s sad is these two ladies were brilliant, great students who had great grades, but felt that the wage they were being paid was worth dropping out of college for. From an economy standpoint, they both don’t bring much value. Their expertise of cashiers can be easily replaced, which degrees like engineering and trade knowledge like HVAC repair will always be valuable.

If we can have a minimum wage for each trade/certificate job, employers can always be prepared for their upcoming wage bill and openings, and not be worried about staffing during upticks or down sides of their business. Employees can also see what compensation they will receive and which jobs the economy is looking for to ensure that the skills they study will be rewarded with a job. All that this requires is an American population with ambition to learn and gain valuable skills. Which leaves me with the question, are Americans interested in investing in themselves?

Thank you all for reading, I would love to hear your comments, maybe we can start a list of all trade/certificate jobs and our own dashboard to keep an eye out for S vs D and what would be a fair minimum wage.