Living Wages
The federal minimum wage is $5.15 an hour. Connecticut has a slightly better pay rate, at $7.10 an hour. However, neither of these are enough to support a large majority of Americans. Raising the minimum wage is not a great idea either, because the ensuing inflation would hurt the poor almost as much as it would help them. Therefore, there needs to be another way to help the poor without hurting them and the rest of us - and there is.
A standard wage to use for a living wage is $10. This is assumed to be enough to support one worker and one dependent. Raising the minimum wage to $10, however, would cause a large inflationary increase - labor costs for those paying workers minimum wage will have nearly doubled. I could not get nationwide statistics for the number of workers earning less than $10 an hour today, but in California, it is around 30%, which I will assume to be about accurate for the nation, though in reality California is not a very good model for the national situation...
A better idea than raising the minimum wage outright would be to raise it to a lower rate, such as $8.00, and then have the government pay the remaining $2.00 to reach the living wage. If we assume 30% of workers in the country (and using the December 2004 workforce size of 132 million), then we have about 40 million workers who are earning less than $10 an hour. Now we will assume that each worker works 40 hours a week, and requires a weekly government compensation of $80. Yearly, each worker will require $4160 of government payment. For 40 million workers, it would cost the government $166.4 billion a year to compensate the entire United States workforce. This number, however, is the absolute highest possible figure. In reality, some workers now earning under $10 would have their wages raised above that mark when the minimum wage is increased, while others would earn between $8 and $10 an hour and require only partial government compensation. Furthermore, part-time workers are seven times more likely to be paid the minimum wage than full-time workers, making my example, which used the full-time benchmark of 40 hours of work per week, inaccurate and skewed the cost higher. Furthermore, tax income would increases along with the expenses, so some of the cost would be offset. In reality, the total cost to the government would be much lower.
How could we pay for this? Well, the most obvious answer is to raise taxes on the wealthy, and make sure they pay them. Every year, the nation's wealthiest individuals put $55 billion dollars in offshore accounts that are immune from federal taxes. If we were to tax that money alone, at a rate of 40%, it would generate over $20 billion a year in excess revenue. If we were to raise taxes on the wealthiest one percent (which, by the way, 20% of Americans believe they belong to), who control half of the country's wealth, we could easily pay for the wage compensation program and have money left over for education and health care. And if we reinstated the estate (death) tax, which would affect only the wealthiest of Americans, even more money would be available to pay for things such as rebuilding New Orleans. Overall, the idea of helping the poor survive by taking from those who will never touch the billions they have lying around is hard to argue with.
A standard wage to use for a living wage is $10. This is assumed to be enough to support one worker and one dependent. Raising the minimum wage to $10, however, would cause a large inflationary increase - labor costs for those paying workers minimum wage will have nearly doubled. I could not get nationwide statistics for the number of workers earning less than $10 an hour today, but in California, it is around 30%, which I will assume to be about accurate for the nation, though in reality California is not a very good model for the national situation...
A better idea than raising the minimum wage outright would be to raise it to a lower rate, such as $8.00, and then have the government pay the remaining $2.00 to reach the living wage. If we assume 30% of workers in the country (and using the December 2004 workforce size of 132 million), then we have about 40 million workers who are earning less than $10 an hour. Now we will assume that each worker works 40 hours a week, and requires a weekly government compensation of $80. Yearly, each worker will require $4160 of government payment. For 40 million workers, it would cost the government $166.4 billion a year to compensate the entire United States workforce. This number, however, is the absolute highest possible figure. In reality, some workers now earning under $10 would have their wages raised above that mark when the minimum wage is increased, while others would earn between $8 and $10 an hour and require only partial government compensation. Furthermore, part-time workers are seven times more likely to be paid the minimum wage than full-time workers, making my example, which used the full-time benchmark of 40 hours of work per week, inaccurate and skewed the cost higher. Furthermore, tax income would increases along with the expenses, so some of the cost would be offset. In reality, the total cost to the government would be much lower.
How could we pay for this? Well, the most obvious answer is to raise taxes on the wealthy, and make sure they pay them. Every year, the nation's wealthiest individuals put $55 billion dollars in offshore accounts that are immune from federal taxes. If we were to tax that money alone, at a rate of 40%, it would generate over $20 billion a year in excess revenue. If we were to raise taxes on the wealthiest one percent (which, by the way, 20% of Americans believe they belong to), who control half of the country's wealth, we could easily pay for the wage compensation program and have money left over for education and health care. And if we reinstated the estate (death) tax, which would affect only the wealthiest of Americans, even more money would be available to pay for things such as rebuilding New Orleans. Overall, the idea of helping the poor survive by taking from those who will never touch the billions they have lying around is hard to argue with.
posted by Jimmy at 9:58 PM
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