A Better Idea Than Minimum Wage

Revenue sharing is a much better solution. We all know how it works. The government does it, and they call it taxes, and it's extremely profitable.

Instead of setting a minimum wage, set a minimum percent of sales that businesses have to set aside for employees. Now, of course, a few decades ago this would be near impossible, but with computerized systems it's 100% feasible.

So, here's how it works...

• First, you don't want prices to go up too high. Right. This means government will have to reduce sales taxes to no more than 5%.

• Second, the right amount to give to employees is 10% of revenue. So, we're looking at a (approximate) total of 15% paid for by customers.

• Let's look at McDonald's. A top performing McD's will make $1.6 million in revenue. Let's say there are six employees. 10% of this revenue distributed to employees represents $26,666 per person. But if you put them on federal minimum wage it's only $13,920. Although this is being optimistic this shows an increase in wages of about 91%.

• Of course there's the idea that this would reduce sales. Well, let's take a $2.00 hamburger. Not a bad price, but not on the dollar menu. For the sake of simplicity let's tak on 15% as a cost to the consumer. This is $2.30. Maybe consumers would be a little annoyed at the price increases, however, it's a manageable amount. In Canada they already pay 13% sales taxes, which was at one point 15%. In the UK it's 20% (VAT). But also bear in mind some of the extra costs are hidden. It won't be extremely apparent at first, especially for small transactions.

• This is the ideal scenario, as it imposes a set share of money. When a company does well, employees do well. They can climb up the ladder, so to speak. But if a company is not doing too good this creates a level of flexibility. However, this represents a risk to an individual's livelihood; however, employees always have the option to quit, or the businesses can make up for the losses in employee income by adding money on top of the revenue shared. So they can for example give employees $10 an hour + 10% revenue.

• Now, since this scheme requires a lowering of taxes, so as to keep businesses competitive, and to not cause huge amounts of inflation, there are certain questions: Doesn't the government lose out? Yes, and no. The government seemingly is getting a reduced amount of taxes, however, money will be saved. People on minimum wage tend to require financial assisstance, and by distributing money to them directly there is a savings on administrative costs. Letting the businesses distribute money rather than government we have one less layer of bureaucracy.

• Furthermore, taxes being circular, the government will get back more money than it thinks it will. Because with extra money for lower income individuals we have more money to be taxed. When employees get paid more they will spend this money, at a higher percent than high income earners, and that recirculates through the economy at a faster rate.

The end result you have here is a redressing of powers. A little bit from the government, businesses, and consumers go towards helping employees, but not in such a way that is extremely upsetting, or detrimental. It is a balanced result. It is much better than the minimum wage system we have now, which requires approval, and does not allow for an individual to grow their income.