Minimum wage increase is really a government scam

[JonnyVito]

If you really think about this issue and break the numbers down the only one who would come out on top of this is the government.

So lets use Oklahoma as the example here since most lived here or live here.

Ok the minimum wage in OK is $7.25 an hour that equals $290 dollars before taxes on a 40 hour work week. Then if you increase it to $15 an hour on a 40 hour work week you make $600 before taxes. So you have an increase in pay of $310 before taxes.

Now there is no way in hell that big companies will just allow the minimum wage to be raised and goods stay at the same price. They have jobs that require them to be in black and make stock holders money. So if you increase the minimum wage 200% then the cost of living is surly to increase 200%.

So you are making more money but then you are also having to spend more money on gas, rent or home payment, groceries and transportation. Now the government will claim that more people are in the middle class and the living conditions in America are great because families could be above the $15,138 poverty line. Yet are they really above this line if cost of living increases also?

So in retrospect the only one who would make more money is the one who takes a % of your income. They get to tax that extra $310 a week you make. So in reality minimum wage workers will make less in the long haul with an increase. I also haven't even brought up the fact that raising minimum wage puts them in a higher tax bracket also where they pay more % in taxes.

I fully understand why they want to pass this so hard because not only do they get more tax money on the wage increase but also if cost of living is increased then they make more on sales taxes also.

 

[Marshal Jim Duncan]

Tell me no...

 

[twiza]

It is hard to say exactly what the cost of living would go rise to, but it would rise. Personally, the daycare my kids go to uses a lot of college students. The place is a non-profit and my fees go up a little each year. Now, imagine those $7.50 staff going to $15 an hour. My fees would be substantial crazy and it isn't like they can cut back on staff, b/c they must maintain a kid to teacher ratio.

What I don't understand is if congress wants to truly help minimum wage workers or even the middle class why not start with the tax code. They could simply call it a cost of living credit.....something everyone would take off of their tax bill. For example, if they decide $15,000 is how much it costs a person to live for a year then that would be subtracted from their wages. This would apply to everyone, but it would help minimum wage workers more than what it would help someone like me. Everyone would still be paying Social Security and Medicare. This is a random thought so I may be way off base.

 

[Headhunter]

I'm doubt most minimum wage workers pay much if anything in federal income taxes.

Personally I would like to see a 10% national sales tax. If someone makes less than 30k they get 10% back from the government. If they make less than 50k they get 5% back. Everyone else pays the full boat. All savings and investment income would be taxed at 10%.

By having a national sales tax all people who come here and spend money help pay their share and you eliminate the underground economy.

 

[TPOKE]

If you really think about this issue and break the numbers down the only one who would come out on top of this is the government.

So lets use Oklahoma as the example here since most lived here or live here.

Ok the minimum wage in OK is $7.25 an hour that equals $290 dollars before taxes on a 40 hour work week. Then if you increase it to $15 an hour on a 40 hour work week you make $600 before taxes. So you have an increase in pay of $310 before taxes.

Now there is no way in hell that big companies will just allow the minimum wage to be raised and goods stay at the same price. They have jobs that require them to be in black and make stock holders money. So if you increase the minimum wage 200% then the cost of living is surly to increase 200%.

So you are making more money but then you are also having to spend more money on gas, rent or home payment, groceries and transportation. Now the government will claim that more people are in the middle class and the living conditions in America are great because families could be above the $15,138 poverty line. Yet are they really above this line if cost of living increases also?

So in retrospect the only one who would make more money is the one who takes a % of your income. They get to tax that extra $310 a week you make. So in reality minimum wage workers will make less in the long haul with an increase. I also haven't even brought up the fact that raising minimum wage puts them in a higher tax bracket also where they pay more % in taxes.

I fully understand why they want to pass this so hard because not only do they get more tax money on the wage increase but also if cost of living is increased then they make more on sales taxes also.

Simple labor employees had better be careful what they asked for. If skilled labor hourly wages do not increase in proportion, the unskilled could be easily replaced.
If the skilled labor hourly wage does increase, for example the guy making $15 an hour now will command $23 an hour, the price of building your house, your pool, fixing your car or whatever just took a big increase.

 

[ThorOdinson13]

If you look it up the minimum wage has almost always been below the average wage for the same position and the increase really only closed the gap. Historically speaking in most circumstances it's more of a vote getter than an actual increase in wages.

It is all a scam though. The whole damned system. By devaluing the dollar and making it nearly impossible for the average family to survive on one income they have effectively doubled their tax earnings by making that extra income necessary. Then of course we have all the propaganda pushing consumerism and telling you that keeping up with the Jones' is necessary.

This isn't even delving into the banking and loan scam which directly affects our debt based currency. Making college education such an expensive endeavor ensures your entry into the system and that you'll try to be a good little hamster and run on that wheel for the rest of your life benefitting those at the top. Then when your on your death bed it's likely your biggest regret will be that you worked so hard and sacrificed so many of the things that truly matter in life to keep up with the Jones'.

Now, where did I put that tin foil?

 

[JonnyVito]

On minimum wage workers not paying much federal tax. Well they don't end up paying much at the end of the year after the government has hung on to it all year for them and made money off it. Also if tax brackets aren't altered then yes they would be paying more though. Also an employer pays taxes on the employee also. I don't know what tax break they get on that at the end of the year.

Oh and Thor here I have an extra hat.

 

[wyomingosualum]

Don't forget about the earned income tax credit, which can provide a tax "refund" for taxes that were never paid in the first place.

 

[Marshal Jim Duncan]

I'm doubt most minimum wage workers pay much if anything in federal income taxes.

Personally I would like to see a 10% national sales tax. If someone makes less than 30k they get 10% back from the government. If they make less than 50k they get 5% back. Everyone else pays the full boat. All savings and investment income would be taxed at 10%.

By having a national sales tax all people who come here and spend money help pay their share and you eliminate the underground economy.

Yes, but they pay withholding on SSI and Medicare.

 

[aix_xpert]

One thing to note...the government's costs go up as well, so while its income increases, it also experiences the same cost-of-living increases, so its a wash. However, that type of inflation would lead to interest rate increases and given the current government debt levels, we would see our annual interest payments increase significantly, which would actually result in the government having less tax revenue to pay for more expensive goods and services (without borrowing more).

Justin

 

[davidallen]

Labor as a constituent component of the cost of a product is fairly modest - even in a pure services business the wages component runs on average about 40% in my experience. Rent, utilities, benefit costs, cost of materials in a restaurant for instance run at about 50% of revenue. Doubling labor cost will not double the cost of a Big Mac - at the most it would add about 15% to the cost basis of your favorite burger. Given that, the inflationary effects would be there, but in no way the doubling that the OP suggests....

Increasing minimum wages will not result in any real increase in income tax receipts to the feds - you would see modest increase in sales tax receipts tied to any inflationary impact. That is a state and local benefit not a federal. Consider that the working poor are subsidized employees - the current minimum wage coupled with food stamps and other benefits to the poor end up subsidizing the lowest wage payers.

If you support the idea of a minimum wage at all you have to think we are overdue for an increase... Wages have stagnated in the past decade, but consider for the minimum wage earner they have not just stagnated but decreased on an inflation adjusted basis.

I like the idea of extending the EITC - probably a 50/50 of raising minimum wage and EITC increases.

 

[Bitter Creek]

Labor as a constituent component of the cost of a product is fairly modest - even in a pure services business the wages component runs on average about 40% in my experience. Rent, utilities, benefit costs, cost of materials in a restaurant for instance run at about 50% of revenue. Doubling labor cost will not double the cost of a Big Mac - at the most it would add about 15% to the cost basis of your favorite burger. Given that, the inflationary effects would be there, but in no way the doubling that the OP suggests....

Increasing minimum wages will not result in any real increase in income tax receipts to the feds - you would see modest increase in sales tax receipts tied to any inflationary impact. That is a state and local benefit not a federal. Consider that the working poor are subsidized employees - the current minimum wage coupled with food stamps and other benefits to the poor end up subsidizing the lowest wage payers.

If you support the idea of a minimum wage at all you have to think we are overdue for an increase... Wages have stagnated in the past decade, but consider for the minimum wage earner they have not just stagnated but decreased on an inflation adjusted basis.

I like the idea of extending the EITC - probably a 50/50 of raising minimum wage and EITC increases.

If labor doesn't really push up costs very much, and the middle class is a shrinking, yet tax paying group dealing with a downward trend of real wages, a minimum increase requirement for the middle class would make more sense than upgrading the wages of high school fast food workers.

 

[aix_xpert]

The biggest problem I have with a minimum wage increase is that it doesn't translate above those levels and creates a race to the bottom. Yes, the guy who makes $7.50/hr gets a raise to $9. But the unskilled guy making $9 who had developed himself beyond the minimum wage doesn't get the same $1.50 raise. So he is once again a minimum wage worker and is back at the bottom. So in effect, he gets a pay cut as his salary doesn't go up yet his costs of goods does. Minimum wage increases hurt the real working-class more than it helps those who are at minimum wage (primarily students, part-timers and entry-level workers).

Justin

 

[07pilt]

Wouldn't the firm originally paying the worker $9 have to increase the pay to keep the more developed employee from taking one of the jobs that just became more desirable due to the $1.50 raise?

 

[aix_xpert]

Wouldn't the firm originally paying the worker $9 have to increase the pay to keep the more developed employee from taking one of the jobs that just became more desirable due to the $1.50 raise?

Nope. He's unskilled, so what job is "more desirable"? Could he go out and get a job at a similar payscale now? Yes. But the salary won't be better and we're still talking unskilled labor. I'm referring to the guy who stocks shelves at Costco. He makes more than minimum wage, and he isn't getting a raise to match the minimum increase, and thus is now that much closer to the bottom.

Good unskilled labor get raises and a premium over run-of-the-mill minimum wage employees at almost all employers. Walmart, McDonalds, Sonic, Target all start people at minimum wage and provide frequent and decent raises to those who show any work ethic. Those raises are effectively lost (or diminished) when minimum wages are increased because those salaries are not similarly increased.

Justin

 

[imprimis]

Nope. He's unskilled, so what job is "more desirable"? Could he go out and get a job at a similar payscale now? Yes. But the salary won't be better and we're still talking unskilled labor. I'm referring to the guy who stocks shelves at Costco. He makes more than minimum wage, and he isn't getting a raise to match the minimum increase, and thus is now that much closer to the bottom.

Good unskilled labor get raises and a premium over run-of-the-mill minimum wage employees at almost all employers. Walmart, McDonalds, Sonic, Target all start people at minimum wage and provide frequent and decent raises to those who show any work ethic. Those raises are effectively lost (or diminished) when minimum wages are increased because those salaries are not similarly increased.

Justin

That's what the unions believe as their pay is pegged to the minimum wage. As it increases so do the wages of union workers regardless of how much above minimum wages they are making.

 

[07pilt]

Nope. He's unskilled, so what job is "more desirable"? .

I don't know, any of the millions of jobs that just got a $1.50 an hour pay raise? Imagine a guy working at Wal-mart for $9 who would rather work for a a better company like Costco but they only pay $7.50. When the minimum wage goes up $1.50 the Costco job is more desirable.

If you have to pay $1.50 above minimum wage to employ a sufficient workforce, either because the job sucks or requires higher quality employees, then you will still have to pay $1.50 (possibly more) above minimum wage after it increases.

Good unskilled labor get raises and a premium over run-of-the-mill minimum wage employees at almost all employers. Walmart, McDonalds, Sonic, Target all start people at minimum wage and provide frequent and decent raises to those who show any work ethic. Those raises are effectively lost (or diminished) when minimum wages are increased because those salaries are not similarly increased.

Ask yourself why companies would provide frequent and decent wages. Now ask yourself why they would then turn around and let the people the gave the raises get paid the same as their newly hired peers.

 

[aix_xpert]

Ask yourself why companies would provide frequent and decent wages. Now ask yourself why they would then turn around and let the people the gave the raises get paid the same as their newly hired peers.

I know it works this way because I've seen it. When minimum wage was $6.25 (6-something) I knew several people who worked at Target making between $8-9. However, when the minimum wage went up to $7.25, they did NOT get a pay raise. Thus they were shifted back towards minimum wage which in effect is a pay cut. Heck back in the early 90s when I was still a teenager, I had it happen to me. Minimum wage was $3.85 and I was making $4.15 @ McDonalds. Minimum wage went up to $4.25. Wanna guess what my new salary was? $4.25 not $4.55, even though prior to the minimum wage hike I had been making 30 cents more than minimum.

Justin

 

[07pilt]

I know it works this way because I've seen it. When minimum wage was $6.25 (6-something) I knew several people who worked at Target making between $8-9. However, when the minimum wage went up to $7.25, they did NOT get a pay raise. Thus they were shifted back towards minimum wage which in effect is a pay cut. Heck back in the early 90s when I was still a teenager, I had it happen to me. Minimum wage was $3.85 and I was making $4.15 @ McDonalds. Minimum wage went up to $4.25. Wanna guess what my new salary was? $4.25 not $4.55, even though prior to the minimum wage hike I had been making 30 cents more than minimum.

Justin

If nothing else it provides those making more than minimum wage with a broader choice of jobs that pay the same as their current job.
It may be a delayed effect, but the invisible hand will take care of things in the medium run. For evidence note the number of people making $9 today, that would be hard to imagine with minimum wage at only $4.15. See TPOKE's post above, I think he was making a similar point.

 

[Marshal Jim Duncan]

http://www.nationalreview.com/artic...hit-san-francisco-comic-book-store-ian-tuttle