"A Better Wage Hike"
Wage subsidies would be better for the labor market than raising the minimum wage.
By Oren Cass | Contributor Aug. 19, 2015, at 8:00 a.m.
"Less talked about but equally important, someone has to pay the difference between what employers offer today and the higher minimum wage. Perhaps the employers themselves would see profits suffer, perhaps they would cut back on raises for other employees, perhaps they would simply pass the cost on to customers as higher prices. Regardless, the burden falls on a narrow group of people who are probably not best able to bear it."
"For these reasons, economists tend to dislike minimum wage increases and argue instead for expanding the Earned Income Tax Credit, known as the EITC. Low-income households receive this credit when they file their taxes at the end of the year, getting additional money from the government for each dollar earned up to a limit. For instance, a single mother with two children who earns $18,000 (equivalent to 30 hours per week for 50 weeks at $12 per hour) receives an EITC of more than $5,000 that lifts her family above the poverty line.
The EITC solves the minimum wage's critical problems: It encourages more people to work instead of shutting some out of jobs and it uses tax dollars so the cost is distributed in the same way as for other government programs. But while the EITC looks great on the blackboard, it cannot deliver that well in practice."
BUT . . .
"How taxpayers subsidize low-wage workers"
B Steven Dornfeld | 03/03/14
"A study completed last fall by researchers at the University of California-Berkeley concluded that front-line fast-food workers earn so little that 52 percent of them are enrolled in one or more public assistance programs. The cost to the taxpayers – nearly $7 billion a year."
https://www.minnpost.com/politics-policy/2014/03/how-taxpayers-subsidize-low-wage-workers
Of course if the minimum wage is for jobs people need to support their family, and they need government aid, taxes pay for the gap in the minimum wage and a livable wage. We cannot pre-determine that certain jobs only go to people who do not support a family.
All the analysis of all the different "consultants" boil down to either the business pays the higher "minimum" wag or the tax payer subsidized employee wages when they go below the poverty level.
Back and forth we go . . .
"Raise the minimum wage? No, subsidize wages instead"
By Larry Harris, 21 Feb 2014
http://www.latimes.com/opinion/op-ed/la-oe-harris-minimum-wage-20140221-story.html
"It's true that while some studies show the negative effect of raising the minimum wage, others show that has little or no downward impact on employment. Such contradictory results are due to the complexity of factors regarding employment. For example, employers rarely cut jobs immediately after a minimum-wage increase. They often wait for natural attrition to lower their head counts, or they may refrain from replacing employees when they know an increase is coming."
"17 Numbers That Will Make You Realize Just How Pathetic The Federal Minimum Wage Is"
09/24/2014 08:44 am ET | Updated Sep 24, 2014
http://www.huffingtonpost.com/2014/09/24/minimum-wage-increase-numbers_n_5868848.html
"The Truth About Minimum Wage Workers’ Take-Home Pay"
http://www.thefiscaltimes.com/Articles/2014/03/13/Truth-About-Minimum-Wage-Workers-Take-Home-Pay
"Today, a worker earning the minimum wage who works 40 hours per week, 52 weeks per year, with no days off, sick days, vacation, or other missed work, would earn $15,080. As the graph below shows, that leaves a family of three considerably below the federal poverty line. However, the EITC, which is designed to encourage work among low-wage employees, provides an additional 36 percent boost in overall income, pushing that family just above the poverty level."
Be aware! Beware!
