Source
r/PoliticalDiscussion•
The_seph_i_am

What are the alternatives to raising minimum wage?

Some have seen me post this as a solution in providing an alternative to forcing a rise in minimum wage. But I'm generally curious if there are other alternatives. I'm pretty convinced corporations would never allow it to happen very quickly. I basically need money now so here's the facts as most biased as I can arrange them.

http://www.nytimes.com/aponline/2015/07/31/us/politics/ap-us-employments-costs.html?WT.mc_id=SmartBriefs-Newsletter&WT.mc_ev=click

States that current wages are at a all time slow pace.

This is bad and plutocrats are aware of it. some even know that raising the wages of their lower level employees is better for their company but can't find a reason to beyond doing something the board of dirrectors would never allow

http://www.businessinsider.com/rich-people-dont-create-jobs-2014-6

https://www.ted.com/talks/nick_hanauer_beware_fellow_plutocrats_the_pitchforks_are_coming?language=en

So since companies would likely pull every string they can to prevent a national minimum wage increase why not give them an carrot instead of a stick.

So Here's a tax loop hole that people might like that will increase pay without increasing minimum wage:

  • If the majority of your employees and sub contractors are US citizens

  • if you provide at least 80% of your entry level and middle tier(let's say the first five pay grades) directly employed or sub contracted employed US citizens (none of this H1B contractor crap that Disney pulled this year) with income that is higher than the start of the national poverty line.

  • And then provide at least a 5% increase in wages for each step above entry level,

  • publish the first five pay grades of the company to an IRS website

your company should receive a comparable decrease in taxes to profit (maybe for every dollar payed to the lower teir employees you receive a 1.20 deduction to profits taxed either imported from over seas or not). Not sure what would be the best percentage there.

This:

  • increases pay, (making democrats happy)

  • doesn't force companies to raise pay that can't afford it (making corporate lobbyist happy)

  • gives companies a reason to hire US citizens at higher pays (conservatives should be happy about that)

  • increases the spending power of consumers. (Face it the 1% can only buy so many cars)

  • provides incentives to companies to make their pay scale public for the first five teirs if they are willing (ie if they want the tax credit) (liberals should be happy about that as it encourages fair pay)

  • provides incentives for companies to declare more of their profits in the U.S. instead of hiding them elsewhere. (Making The IRS happy... So Dems?)

  • it also rewards trickle down economics (making republicans happy)

  • and all forms of government receive an increased revenue through sales, and income taxes. Because money that would be left stagnant in bank accounts gets used by lower class members finally being able to purchase "luxury items" (ie not food, utilities, rent, childcare or education)... More like new cars, family trips, and investment savings (making banks less annoyed).

The best part is this just doesn't effect the first their of pay but (in most cases) the pay grades all the way up to asst managers, where you expect pay to be different based on capability and experience.

Posted Aug 3, 2015, 11:36 PM UTC

794
blah_kesto•

We already have the EITC... why not just increase that as the better minimum wage alternative?

6
sidevotefairy•

I'd rather employee pay come from employers, rather than taxpayers.

A single adult working 40 hours a week should earn enough that they don't need/qualify for public assistance.

4
BUbears17•

Agreed. There definitely should be a middle ground between raising the EITC and raising the minimum wage. Moderate levels of both seem to be supported by economists in general

6
The_seph_i_amOP•

So do you think my idea would work then?

1
BUbears17•

Not necessarily. What a lot of people are suggesting is a $15 minwage because that's what it'd take often times to get off assistance. However it's too burdensome for employers, so a better middle ground I believe is the $10 minwage (fed. level) which increases yearly with inflationand supplementary negative tax or EITC

3
The_seph_i_amOP•

Finally someone else that see it the same way.

2
blah_kesto•

I don't see your explanation of why? Both programs transfer money from one set of people to another - from A to B - with the goal of reducing inequality. And relative to the minimum wage...

  • The EITC is more effective at targeting those who need it (the group B more precisely contains people who need more money).
  • The EITC is better at targeting who funds it (the group A includes all the people who can afford to fund it, whereas with the minimum wage many rich people are excluded from group A and many people in group A are poor).
  • The EITC's effect on employment is likely to be positive rather than negative.

So basically: the EITC works better economically and does a better job of reducing the inequality that matters.

A single adult working 40 hours a week should earn enough that they don't need/qualify for public assistance.

This is just an arbitrary matter of framing. The minimum wage is a public program that assists people, just like the EITC.

I'd rather employee pay come from employers, rather than taxpayers

For their market rate, sure. But for whatever extra you want someone to be paid for poverty/equality reasons, why would this be better?

2
sidevotefairy•

Because the business profiting from the employee's labor should pay for the labor, not taxpayers.

The goal of the minimum wage isn't to reduce inequality, it's to make sure there is a reasonable wage floor for people with the least amount of bargaining leverage.

5
blah_kesto•

I still don't understand how this answered the question why?

the business profiting from the employee's labor should pay for the labor, not taxpayers.

They do pay the labor. Regardless of the minimum wage and the EITC, they pay a wage that the worker deems good enough to be a win/win trade. For whatever additional amount low wages can be additionally boosted to make the world a better place, you have not said why it's better for the employer to do it than the EITC.

I laid out the basic case for how the EITC helps people more effectively than the minimum wage. So far you haven't explicitly disagreed with that argument. Do you disagree? Or is your goal with public policy here to do something other than effectively help people? If the overriding goal is just to punish people who pay low wages, then I agree the minimum wage is better than the EITC. And in that case we just have different goals.

The goal of the minimum wage isn't to reduce inequality, it's to make sure there is a reasonable wage floor for people with the least amount of bargaining leverage.

I don't understand. Why do we want a "reasonable wage floor for people with the least amount of bargaining leverage" if not to reduce poverty/suffering/inequality/unfairness?

1
The_seph_i_amOP•

Admittedly I wasn't aware of it until you mentioned it, but what I read it doesn't seem to actually increase the gross wages of the entry level wages and it doesn't encourage US citizens over H1B workers.

And the money remains in a bank account of a plutocrat.

0
blah_kesto•

it doesn't seem to actually increase the gross wages of the entry level wages

How?

it doesn't encourage US citizens over H1B workers

A non-citizen can only qualify if they were a resident alien for the entire year. However, if you don't like that, you could simply advocate for the EITC to only apply to citizens. It'd be easy to set it up that way. But if we care about redistributing money to help ease poverty and inequality, I don't see why it would matter whether the recipient is a citizen or not.

the money remains in a bank account of a plutocrat.

How?

I don't think you know how the EITC works. It's just another way to boost wages for low-income workers, like the minimum wage. The differences are:

  1. It is given as a tax credit, rather than as a required part of their direct wages.
  2. Because it is handled as part of taxes, more information can be used to see whether the person really needs a boosted wage. For instance, someone can be working a minimum wage job that is actually wealthy because they are a child that lives with a rich family. The EITC can take advantage of that knowledge to direct the boosted income to those who actually need it.
  3. Because it is a tax credit, the cost is spread out basically among all the tax-payers who make enough to not need the credit, whereas the minimum wage's cost is paid just by employers and customers of minimum wage jobs.
  4. Because the cost is not put on the employer, it doesn't have the potential downside of increasing unemployment like the minimum wage does.
5
DarthRedimo•

Basic Income is way better than minimum wage. It was successfully implemented during an experiment in Canada. People would still want jobs that gave them advancement opportunities.

5
Scottmk4•

It's hilariously impossible to finance.

It would either be too small to replace the other entitlement programs, and thus just be trillions more that we can't afford, or it would be double the size of the entire federal government.

20k / person / year certainly isn't enough for food, housing, and medical care in many urban areas, but it would cost 6.2 trillion assuming zero overhead.

8
metachronos•

Land Value Tax, Carbon Tax, Financial Transaction Microtax, etc.

-1
Scottmk4•

Are you trying to claim that we could triple federal tax receipts without exploding the economy?

1
DarthRedimo•

Mincome would make everyone who earns over 20k ineligible and some people under 20k would have jobs and some income so they would get less than 20k. It would still cost a lot though.

-2
Fuckdabullshit•

Why in the fuck would anyone work for less than $20k a year when they could sit on their ass at home and collect $20k a year?

8
Scottmk4•

Further, who would work 250 days a year for 25k, with all the clothing and commuting expense that entails, when they could work 0 days a year and get nearly as much.

Such a plan would essentially destroy any sub 30k / year jobs.

Needless to say that means all entry level jobs are eliminated, which will basically create a permanent unemployable underclass.

5
BUbears17•

Exactly right. I'm in college right now working 41 hours a week. Assuming I did that every week for a year that'd be 23k before taxes a year. I'd make more money per year sitting on my ass than I would working right now. How in the hell could a basic income not have freeloaders?

3
[deleted]•

[deleted]

1
reasonably_plausible•

Because they would still be receiving a certain percentage of that income if they were making $20k. Mincome would be tapered off, but at no point would making more money ever be a bad idea.

0
cipahs•

Bro do you even Libertarian

https://youtu.be/xtpgkX588nM

2
The_seph_i_amOP•

I still see this as something that would basically cause people to never want to reach hire because they would end up having to pay more and more (percentage wise) in taxes the more they earn.

Am I understanding this correctly? It seems like this basically just adds lower tax brackets to the system that just gives a higher tax return.

1
The_seph_i_amOP•

Basic income? Please explain.

2
DarthRedimo•

A Basic Income is an income unconditionally granted to all on an individual basis, without means test or work requirement

2
The_seph_i_amOP•

So socialism?

-3†
DarthRedimo•

I am libertarian and I support basic income because you can get rid of all other social programs and entitlements.

4
dialate_your_mind•

That is the fox news definition of the word, yes.

3
FlyingFistsOfFury•

There are some people here that would say that the definition of socialism is so narrow that this has nothing to do with it, and others that would say it is a generally socialist program but that all sorts of programs are at least somewhat socialist.

In other words, that's to general to really be useful at all. It is a type of social program.

1
DayVDave•

Similar to socialism, but without the central planning. It allows market forces to work, because everyone chooses how to spend their money.

And think of all the benefits: No need for minimum wage. No fear of automation or immigration or outsourcing taking "our" jobs. No tax breaks for corporations who promise to create jobs. No one working jobs they hate just to stay alive.

Not to mention no poverty, and thus less crime, fewer law enforcement and corrections officers, fewer jails and prisons.

Now imagine the value to humanity as a whole if artists and scientists could pursue their interests without worrying about financial gain. What great books could be written if the authors weren't worried about mass appeal; what great discoveries would be made if science could advance for it's own sake, instead of for profit.

Check out r/basicincome for a more in-depth discussion

1
reasonably_plausible•

How does a basic income promote the public control of the means of production?

1
ExhibitQ•

Socialism is when the workers own the means of production. For example, in a factory, there would be no executives that own the machines, the workers collectively own them.

1
metachronos•

Socialism, the word that doesn't mean what you think it means.

1
the_sam_ryan•

It was successfully implemented during an experiment in Canada.

No, it wasn't.

The "experiment" was telling people that it would only last a short period. Which means that behaviors wouldn't change, because they had to prepare for the benefit to fall off.

1
The_seph_i_amOP•

Also that was Canada, they are honest good people. We Americans, couldn't even do hitchbot right.

http://arstechnica.com/the-multiverse/2015/08/robot-depending-on-kindness-of-strangers-meets-its-demise-in-philadelphia/

-2
CommodorePiri•

Strong unions organised within a democratic corporatist structure.

America like the UK, Australia and Canada has pluralist interest group representation. There is no formal lobbying structure so in the end whoever has a narrow interest and wealthy backers have more influence and negotiations are irregular and there is little incentive to cooperative or capitulate to opponents.

In corporatist structures unions are organised into peak organisations representing entire industries. These organisations are incorporated into policy development and company boards.

In authoritarian forms of this structure these peak organisations are used to control the working and owner class and this is a common form of fascism.

In democratic forms of this structure the interests of the owner and working class are more aligned, and negotiations are constant meaning there is less class conflict or disruptive industrial political actions and better outcomes for both worker and owner without require laws to specify what those outcomes are.

This structure is seen in smaller European states and is why Scandinavian countries (used to) get by without minimum wage laws. It developed in the late 19th century and early 20th century. The best book I've read on it is Liberalism, fascism or social democracy by Luebbert

5
The_seph_i_amOP•

So stronger unions that also function as lobbyist for the companies that union works for?

Kind of reminds me of the grey council from bayblon 5.

Interesting, but somehow I don't see republicans getting behind it.

-1
CommodorePiri•

The exact workings vary but in some unions get representation on company boards so CEOs are accountable to the workers or during policy development the state will proactively consult with organisations representing both owners and workers at the same time enabling them to compromise for effective outcomes.

It's ridiculous that small government proponents could oppose this as it enables individuals to effectively negotiate their working conditions without state interference.

1
ShadowNexus•

You are right, small government proponents wouldn't oppose it. So, then you have to redefine who is opposing it.

1
CommodorePiri•

I'm not defining anything. OP suggested that republicans would disagree with this. I'm saying that the small government portion would be silly to oppose this structure.

If you would like to know who did oppose it historically, it's all in the book I linked. Generally when the rural middle class formed a political coalition with the urban professionals it met opposition. When they formed a coalition with the urban working class this structure was a possible outcome.

2
_Muzak_•

The EITC is good as mentioned before though a negative income tax may be preferable.

Though to put a different idea out there we can cut taxes that are highly incident on workers. The payroll tax falls completely on workers and corporate taxes fall highly on the.

5
The_seph_i_amOP•

Now a negative income- you mean if someone's net income is negative after non luxury items then they receive compensation?

0
_Muzak_•

What? No. You don't factor in someone's expenditures when calculating income. Each year at tax each person receives a credit that adjusts their income to an appropriate level if It is below it.

3
The_seph_i_amOP•

So it covers whatever the company fails to pay in honest wages or wages that are basically taken away because of taxes?

Interesting

So Is there a method that doesn't involve taking income from the government?

I should have specified this sooner but I'm trying to come up with something that basically still provides income to both government programs and wages to personnel. Has someone figured out how to fund Negative income in this manner?

The way my idea works is it encourages companies to use their profits more than they have, the tax deductions are basically paid for through the increased wages and spending power of the lower teir employees.

The basic argument for this is that companies continue to pronounce record profits but fail to increase wages appropriately. Granted that is mainly to attract investors and come tax day they always say they've experienced a decrease. But you get the idea.

Companyies have gone through the past two decades not certain if they can commit to higher incomes because they never know what the government will ask them to pay next. So they've literally been storing it like squirrels. Honestly I don't think they know how anymore. The idea I've put forward I hope would remind them of this process.

1
BUbears17•

I'm sorry but I've been reading your comments and I have to ask; do you know anything about our tax laws? Because you didn't even know what a tax credit was, yet you consistently are debating these issues without a clear understanding of the topic

1
The_seph_i_amOP•

No not as strong a grasp as I would have liked before posting this. I've been toying with this idea off and on for about a year now but haven't really taken time to flush it or research it fully. (Received new orders and just haven't had time)

Occasionally people would see this idea and just down vote it and simply not explain why. Others would up vote it but never explain why.

Thus the reason I placed this here. I really am curious what the real alternatives are to minimum wage and what if any aspects I could carry over into this.

So far a lot of these look like theories that have been debated about for years but for one reason or another aren't entirely feasible.

I'm fairly convinced that minimum wage will be a strong reason Dems would get elected as republicans are typically nascent to discuss what alternatives there are so I wanted an answer republicans can point to and say, well we could try "this". And that answer not feel like a socialist coup out, or an answer that would cost the government directly.

I wanted someone to not just say their idea was better by why and why mine wouldn't work. Mostly I wanted better. Better ideas better insights, better stories than my limited understanding and insight.

There's a concept called unconscious incompetency, it basically states you don't know what you don't know it is the first stage of learning. I needed to see what I didn't know what I couldn't factor.

People are passionate about their ideals. And seeing them explain it in their own words helps considerably in forming a dialogue about the subject.

I don't feel that my lack of fully understanding a thing makes my idea less valid, a little sophomoric... true, but not something unworthy of consideration.

Does that make sense?

1
Austinpike446•

Taxing people more to pay for foodstamps, government housing, etc.

3
cipahs•

Or you know a larger earned income tax credit......

7
BUbears17•

This. Economists largely favor increasing EITCs as opposed to increasing minimum wages which is a more hotly contested topic

4
The_seph_i_amOP•

So we should basically just deposit out money directly to the IRS?

I mean I can't be trusted with my money right?

Makes since /s

Seriously though, I don't see how we can keep spending without cutting programs and increasing taxes.

-1
Mason11987•

I don't see how we can keep spending without cutting programs and increasing taxes.

Plenty to cut out there, The program to build the F-35 (a plane we don't need) cost us about 1.7 trillion. A year of food SNAP costs ~70 billion. In other words, if we didn't spend money building ap lane we don't need we could fund food stamps for 24 years. Done and done.

-3
reasonably_plausible•

The latest estimated cost for the F-35 is $1.01 trillion over the entire lifetime of the plane (55 years). That's development and procurement. The cost just to maintain our existing planes that the F-35 is replacing for that amount of time is drastically higher. The F-35 will save money over its lifetime.

6
_o7•

Thank you.

3
beer_30•

Start enforcing antitrust laws. We went hog wild on mergers and acquisitions and look where it got us. Income inequality is at an all time high because so many small and medium businesses got swallowed up. More jobs needed to be filled = higher wages and no need for having a minimum wage.

3
The_seph_i_amOP•

Now there's an idea I can get behind.

Mainly because it smacks of justice and to a lesser extent "pitchforks".

But wouldn't the enforcement cause so much turmoil that nearly every politician would have to step in to save their corporate backers?

2
[deleted]•

[deleted]

2
beer_30•

We should have no say if companies want to merge and become more monopolistic? I'm sure there are exceptions where it might be more beneficial to the public but how are we supposed to know that? Better just to enforce the laws as they are written. Why do we have antitrust laws in the first place? I thought the idea was to promote competition and a healthy marketplace. A good side effect is that there wouldn't be all these low wages like we are seeing now where we are forced to increase the minimum wage. You can't have it both ways.

2
[deleted]•

[deleted]

3
cipahs•

You realize they have to compete on a global market

1
loudnoises461•

Enforcing immigration law to bring down the supply of cheap labor naturally raising the price.

2
yabbadabbadoo1•

Enforce immigration lowers the supply of labor. Any way to cut unemployment will raise wages. One of the reasons you have such stagnant wage growth is there is no competition for workers. You could have a thousand workers quit and replace them very quickly for the same or less wage. People need jobs, the wages will come once they have to choose between two jobs.

Also allowing companies to bring profits back as long as they invest in America without tax or at a much lower rate would be great. Any investment is more jobs, or better jobs.

Raising the minimum wage just make products more expensive or raises unemployment. If you raise the entry level job wage then you have to raise the supervisors, then the managers, then the directors, ect.

2
The_seph_i_amOP•

Raising the minimum wage just make products more expensive or raises unemployment. If you raise the entry level job wage then you have to raise the supervisors, then the managers, then the directors, ect.

Only to a certain extent the wage gaps between certain positions are extreme. So in a few spots the pay would likely not change much.

Regarding driving up inflation this is partially true but because we are allowing the companies to choose whether or not they want the deduction then it's not as drastic a change as raising minimum wage.

One of the reasons you have such stagnant wage growth is there is no competition for workers.

So wouldn't encouraging company's to hire U.S. citizens instead of outside labor shrink the pool of workers?

1
cipahs•

A larger earned income tax credit.

2
[deleted]•

[deleted]

1
DevonWeeks•

NIT, as a few have said, with a total removal of the minimum wage. Set the rate and threshold to be such that it empowers the laborer to simply walk away from a job if the pay is not good enough. You empower the worker without the need for unions. You've effectively leveled the playing field in negotiating compensation. If McDonald's tells you they'll pay $5 an hour, you can tell them to screw off. If your boss is demanding more work from than you than you think your pay is worth, you can simply walk off the job. Compensation must become competitive and must attract quality workers and entice them to stay. That's as much a selling point to that system as the basic income element is.

1
cipahs•

Negative income tax combined with a removal of the minimum wage or a larger eitc

0
molotoviphone•

Reallocating some of the so-called "defense" money into our health care system or public works that creates more jobs and in general just a better economy.

0
CuilRunnings•

People in general choosing to better plan their families for when they are emotionally and financially stable.

0
The_seph_i_amOP•

That can be true only to a fault. Perhaps the family was stable but is no longer due to having to relocate. (As is my case). There are other reasons as well.

http://ifunny.co/fun/2LGGV0v03

1
CuilRunnings•

Sure there are, but when the vast majority of children today now being born outside of wedlock, it's clear that we have a cultural problem.

-2
The_seph_i_amOP•

Marriage doesn't mean what it used to "literally". People have realized that just because you have a kid that is not a reason the kid should live a life with two people that hate each other.

That said you are correct in saying people need to realize the responsibilities of raising a child are not just teaching them to do the right things but ensuring you have the means to do so. But as I said situations don't always turn out like you expected or planned. And eventually you may not be able to have children at all and that is not something I would deny fully to anyone.

1
CuilRunnings•

You have a very optimistic and not grounded in reality view of humanity. Best of luck.

-1
duckyhunter•

Eliminating minimum wage is a pretty good alternative. It comes with the added benefits of creating jobs and increasing American spending power.

-1†
Taj_Ramos•

Predatory lending for days, bro. Somebody making $5 an hour won't be able to afford basic expenses and you can bet bankruptcies will skyrocket. That's just asking for there to be a massive tank in the economy. No rational company would raise their wages because they would piss off shareholders.

3
The_seph_i_amOP•

It increases the spending power of plutocrats not lower class. There are only so many cars they are willing to buy. As was pointed out in the second article.

http://www.businessinsider.com/rich-people-dont-create-jobs-2014-6

2†
duckyhunter•

You failing to realize that that editorial actually validates what I said is pretty pathetic.

-2
The_seph_i_amOP•

I earn about 1,000 times the median American annually, but I don’t buy thousands of times more stuff. My family purchased three cars over the past few years, not 3,000. I buy a few pairs of pants and a few shirts a year, just like most American men. I bought two pairs of the fancy wool pants I am wearing as I write, what my partner Mike calls my “manager pants.” I guess I could have bought 1,000 pairs. But why would I? Instead, I sock my extra money away in savings, where it doesn’t do the country much good.

2
carlucill•

Anyone who says savings don't "do the country much good," probobly isn't worth listening to in the first place.

0†
[deleted]•

[deleted]

0