Quote:
Originally Posted by GGG
I was thinking about minimum wage the other day and my argument that businesses should pay a wage that allows a person to live without government subsidies. It might be entirely flawed. For example the US Walmart example is that they require health subsidies from the government. Well this is very true in Canada as the entire health system is subsidized by high marginal rate tax payers.
What if that were flipped the government should give its citizens enough money so they can meet the absolute minimum of needs (home and food). Then get rid of minimum wage. Essentially have a minimum guaranteed income but very limited employee rights
In this environment you would have higher taxes to subsidize people who aren't working or working for very little money and business would have to pay enough money so that the benefit of working outweighed just collecting the subsidy.
The concept of minimum wage might be completely flawed. Its set up to ensure that people can earn a living and support themselves but what if instead we ensured businesses were successful, taxed them effectively, and used that money to support people.
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This is a terrific concept, however if I had to guess this would likely cost significantly more than raising the minimum wage to $15/hour. I'd have to imagine that a lot of people would stop working all together if they were given a living allowance as well. Anyone currently working below $15/hour would probably just sit back and live their life as it will have improved significantly over what it was before, homeless people as well. Then you could run into the scenario where businesses and taxpayers are paying more than they are even making to cover everyone's living.
Again I'm not saying it's a bad concept, but even just looking at the public outcry over a small percentage of the workforce getting a raise and it's hard to imagine those people ever getting on board with paying even more money to help more poor people. That and the fact that if you remove minimum wage all together you are really in my opinion embarking on a dangerously regressive course. Businesses can say well we can only pay you X now since you have so much paid for already and we need to pay more tax because of that so take this or leave it, otherwise we'll need to close down because it's getting too expensive to operate here. And since a lot of people seem to like to believe that whenever they hear it, they will take far less than what that company may be able to actually pay them.
This isn't even taking into account the fact that you would essentially need to force people to work otherwise as population grows there will be an ever increasing cost to subsidize people by taxing employers, add to that the fact that automation will continue to wipe out a lot of jobs and eventually you'll be left with companies paying for us to live without enough money coming back and no way of reversing this. At which point they'll likely just shut down.
A better solution in my mind would be for the government to make mandated severance pay for layoffs extremely penalizing for employers to deter them from replacing workers with machines. But the government isn't really taken this issue seriously yet, only those "evil" unions are.