The Minimum Wage Is Just A Distraction.

Politicians of both parties want to pander to their political bases. Republicans want to show that they are providing good value for their oligarch masters by ensuring that it’s legal to pay ridiculously low wages to employees and that there is a good supply of illegal (ie. Close to slave) labor.

While Democrats want to show their supporters that they are looking to help the working people by increasing wages. But they do very little to actually increase the living wage for anyone below the upper levels of society.

And they both use the minimum wage as a flag to fly to support their cases.

But let’s be really clear, no one is proposing a minimum wage that is high enough to actually be livable in the modern United States of America.

The amount of money it takes to live clearly varies depending on many factors, such as the cost of local housing, basic amenities (water, power, heating etc), consumables (food, clothes etc), healthcare, transport, and services. These costs vary depending on where you live. When you add all these basics costs up, it’s clear that a single person or family living on minimum wage incomes cannot possibly survive anywhere without additional support from government programs (either tax rebates, social services or other forms of grants).

The republican view is that these people just need to work harder; otherwise their employers will find it better to take their jobs offshore.

The democratic view is that these people just need more support from government, either in direct assistance or support programs to help them get a better job.

Neither of these approaches ever work as planned, and I don’t think they are really expected to, so long as the bases of each party believe that their politicians are doing their bidding, the politicians are happy to posture and actually achieve minimal change.

There are programs that can work, but these mean actually looking at the causes of a problem and not the symptoms, and it doesn’t seem that either major party is ready to do that, except maybe at the fringes with lefty loons and right wing nut jobs.

The basic issue is that we need people to be employed and we need these people to earn enough money to be able to live without having to be supplemented by government-collected money and hence re-distributed money. This can happen, and the simplest way to make it happen is to create a system whereby employers must pay employees at least enough such that the employees don’t qualify for any form of government assistance (excluding health and disability related help). If an employer pays an employee less than that minimum level then the employer should have a tax levied on them at a level greater than the cost incurred by the government in supporting that employee, and it can be calculated at an hourly rate to cover full-time and part-time employees. That’s actually a very simple calculation to perform.

If an employee works X hours per week for an employer and is paid $Y per hour, but they get $Z of total assistance from government organizations then the impact of underpayment from the employer per week is Z/40 * X (assuming we expect a worker to work 40 hours a week). If Y > than the threshold for receiving benefits then the employer is paying the true minimum wage and no benefits are being received from underpayment of wages. If not then a tax of (Z/40 * X) * 1.5 should be levied on the employer. So it is cheaper for an employer to pay the worker a living wage than to pay the increased tax, that would quickly encourage everyone to pay a living wage.

This formula calculates the impact of assistance per hour so works just as well for part time workers as full time workers.

And to balance that cost there must be a levy on all services and manufacturing that is provided out of the USA. So it becomes cost effective to employee in the USA.

If employers were paying a level to their lowest paid employees that reduced the need for government assistance, then the amount of money government needed for these services would go down, allowing taxes to go down.

Obviously like any idea, this only works if politicians actually had the aim of reducing taxation and increasing the quality of life of the working class, but it really is not clear that is the true aim of any of them today.

It would be beautiful if there was a politician who actually wanted to reduce the tax burden by actually fixing broken programs, rather than pandering to their personal masters, but I just don’t see it happening anytime soon.