Firstly, there has been much discussion about a $15 per hour minimum wage.  “President-elect Joe Biden’s newly unveiled stimulus plan includes a federal minimum wage increase to $15 an hour, although the measure is likely to face pushback in Congress.

$15 per hour minimum wage – Unveiled stimulus plan.

Firstly, there has been much discussion about a $15 per hour minimum wage. It would not be difficult to find news articles on this subject. Here’s a quote from a recent article: “President-elect Joe Biden’s newly unveiled stimulus plan includes a federal minimum wage increase to $15 an hr, although the measure is likely to face pushback in Congress. Currently set at $7.25 an hour, Biden moved to nearly double the country’s minimum wage in his $1.9 trillion economic relief package.” – Business Insider – 1/16/2021 Please look at this subject in the news, pros and cons, and then review the Equity Theory in the textbook. Please respond to the following scenario by opining on the questions listed below. CASE: Pull-A-Part is a Shreveport area business with several locations (I am making this up. This is not actually a Shreveport business, although similar businesses exist.)

$15 per hour minimum wage – Unveiled stimulus plan.

The business revolves around buying junk cars and allowing customers to pull the parts. One fascinating element of the business is employee turnover. Employees who enjoying working in this hustle-and-bustle atmosphere tend to stay a long time, in fact there is a group of employees (about 60%) who have been around for greater than five years. There is also a group of employees (about 40%) who are in their first and second year. The owners can see the trend. They know if an employee makes it to the two-year mark, they are likely to stay with the business for five or more years. All employees are hired at $10.00 per hour.

$15 per hour minimum salary – Newly unveiled stimulus plan.

With raises and promotions, five to seven year employees can make $15 to $16 per hour. And it can go higher. 1. An exchange relationship exists between companies and employees. An employee’s wage is one of the elements. A company “contributes” the wage in exchange for “demands.” This is also referred to as “inputs” and “outputs” in the Equity Theory. If the minimum wage increases to $15 per hour, should the company expect more from employees who benefit from the increase? What would the owners think? What would the affected (those getting a bump) employees think?  In addition, what action will the owners take if the cost of employing 40% of their workers is unexpectedly increased by a new law? If they plan in advance, the owners would likely have a labor budget that is now larger than expected.

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