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Post by AYC on Jan 3, 2016 5:40:43 GMT
One of the main criticisms of the minimum wage is that it hurts the profit margins of businesses, thus slowing economic growth. I am not personally persuaded by such an argument, but I do think a reasonable case could be constructed around it. One solution I've thought of is to have the government pay a share of the minimum wage for each worker, thus maintaining a high wage for workers while reducing the overall cost for businesses. This can be either state or federal level, but we'll go with federal for convenience's sake. According to the Bureau of Labor Statistics, 3 million American workers earn either exactly or below minimum wage.Let's take that 3 million number and apply it to US Presidential Candidate Bernie Sanders' proposal to raise the minimum wage to $15/hr. In this scenario, the federal government would pay 2/3 of the wage, or $10/hr. Assuming an average of 8 hours per workday, that's $80/day per worker, or 29,200/year. Multiplied by 3 million workers, that's $87.6 billion dollars per year. By comparison, the US federal budget is about $3.8 trillion/year. Is this an unreasonably high cost for the federal government to pay? Will the large cost be outweighed by the reduced burden on businesses? Why or why not?
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Post by Jasen777 on Jan 3, 2016 16:30:01 GMT
There's all the people making between minimum wage and $15, which has to be a lot of people and would have to be considered in calculating the cost.
And effectively the government is already doing this through various welfare programs.
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Post by rinkou on Jan 3, 2016 21:18:58 GMT
Universal basic income would be a better use of the money than attempting to cover the shortfall anyway. Arguably, this also provides huge supports for students, retired and disabled persons, as well as allowing for the freedom to pursue entrepreneurship among more segments of the population.
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Post by orvillethird on Jan 4, 2016 2:05:27 GMT
It's a great idea-though there would likely be tremendous opposition from Republicans and others. There would of course be issues regarding the deficit, though between military waste and corporate welfare (to say nothing of Radio Free Europe), we can certainly afford to cover the cost. It would likely cost less than a UBI.
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Mathuen
Junior Member
马萨诸塞州, 中华人民共和国 (Trapped Yo)
Posts: 70
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Post by Mathuen on Jan 5, 2016 10:41:33 GMT
Okay, so rather than doing the people below minimum wage lets do everyone below 15 dollars an hour. The active US work force is around 157 Million (the total eligible work force is around 240 million, but many people are not in the work force, such as the elderly and domestic spouses), with around 112 million working full time.
For this I will only be counting full time. Yes, perhaps a bit inaccurate since so many industries, especially service, are transferring to what is essentially permanent part time, but it is what it is.
Now, 42% of the full time work force makes less than 15 dollars an hour. This gives us 47 million full time workers making less than 15 dollar an hour. So if we are keeping with the government paying 10 out of 5 dollars, and thus 80 dollars a day, and i'm going to do a 5 day work week, because AYC's numbers had the workers working literally every single day of the year we get 400 dollars a week by a tad over 52 weeks getting us to the US Gov paying 20,800 dollars a year for 47 million workers...
Which lands us with 977.6 Billion dollars a year for this program.
So, um that is a sizable chunk of the budget. Let us assume for a moment though that the amount of money saved by companies somehow makes its way back to the Fed (It won't) that would mean that the extra money made back by the companies back to the government would be around 219.9 Billion thus making the program cost...
757.7 Billion dollars a year
Another way around though, since many states are already raising their minimum wages from the Federal 7.25 to 10 dollars let us assume that 10 dollars becomes the federal minimum wage thus meaning that the Gov only has to put in 5 dollars. That means that the program costs...
488.8 Billion dollars a year
So, um, not totally impossible logistically and administratively but it would never pass Congress and would still leave 45 million (and growing) part time workers in the cold.
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Post by orvillethird on Jan 5, 2016 15:21:48 GMT
Mathuen, you left out one big thing- taxes. Someone making $400 a week with no exemptions would be paying $44.50 in taxes, $24.80 in Social Security and $5.80 in Medicare.
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Mathuen
Junior Member
马萨诸塞州, 中华人民共和国 (Trapped Yo)
Posts: 70
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Post by Mathuen on Jan 6, 2016 2:03:15 GMT
Mathuen, you left out one big thing- taxes. Someone making $400 a week with no exemptions would be paying $44.50 in taxes, $24.80 in Social Security and $5.80 in Medicare. I'm assuming here that the government is not double taxing its own taxed income through the copay, because if I did then I'd just directly subtract that from the amount of income the government is copaying. If I did though, getting the exact numbers to subtract would be a wee bit difficult because i'm not exactly sure what the rules on taxing returned tax income through a government copay would be anyways, I don't think the US even has a system set up to decide that.
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Post by crustyoldssg on Feb 4, 2016 20:36:53 GMT
One of the main criticisms of the minimum wage is that it hurts the profit margins of businesses, thus slowing economic growth. I am not personally persuaded by such an argument, but I do think a reasonable case could be constructed around it. One solution I've thought of is to have the government pay a share of the minimum wage for each worker, thus maintaining a high wage for workers while reducing the overall cost for businesses. This can be either state or federal level, but we'll go with federal for convenience's sake. According to the Bureau of Labor Statistics, 3 million American workers earn either exactly or below minimum wage.Let's take that 3 million number and apply it to US Presidential Candidate Bernie Sanders' proposal to raise the minimum wage to $15/hr. In this scenario, the federal government would pay 2/3 of the wage, or $10/hr. Assuming an average of 8 hours per workday, that's $80/day per worker, or 29,200/year. Multiplied by 3 million workers, that's $87.6 billion dollars per year. By comparison, the US federal budget is about $3.8 trillion/year. Is this an unreasonably high cost for the federal government to pay? Will the large cost be outweighed by the reduced burden on businesses? Why or why not?
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Post by orvillethird on Feb 5, 2016 1:20:45 GMT
Mathuen, you left out one big thing- taxes. Someone making $400 a week with no exemptions would be paying $44.50 in taxes, $24.80 in Social Security and $5.80 in Medicare. I'm assuming here that the government is not double taxing its own taxed income through the copay, because if I did then I'd just directly subtract that from the amount of income the government is copaying. If I did though, getting the exact numbers to subtract would be a wee bit difficult because i'm not exactly sure what the rules on taxing returned tax income through a government copay would be anyways, I don't think the US even has a system set up to decide that. To be fair, they do tax a lot of federal and state benefits. My unemployment benefits are taxed.
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