Stupid Me” just woke up with a good idea. I’ll start from the beginning. Currently in our society, there are those of us whose wages do not provide enough to meet our needs. So how do we survive? Simple. We receive government benefits which include entitlements, food stamps, subsidies and various other social services that are funded by our taxes to maintain a basic “living wage”.
Increasing the minimum wage is a good idea, because workers will be making enough income to support themselves and the government will save a fortune in welfare entitlements. The business community will be responsible for maintaining that living wage instead of the government.
But wait—there’s a Glitch! Presently there’s a proposal to raise our taxes to maintain that basic “living wage” from $7 to $15 per hour. That’s more than a 100% increase their wage.
Its reasonable to assume if this goes through, the more seasoned more productive workers who are already earning around the proposed minimum wage will expect a raise of at least $7.00. Because of the increase in labor costs, the seller’s costs to produce products and services are increased and their profit margins are reduced or eliminated. As a result, they have to raise prices for the very products and services the minimum wage increase was designed for the worker to afford. Now the workers are back where they started from, not earning enough money to cover expenses to support the same standard of living. And the beat goes on...
Profits Decrease Prices Rise Back where
What do we do now? Do we increase the minimum wage like we have done a number of times over the years, to no avail in the long run?
How about this idea?
The government mandates a gradual increase in minimum wage that coincides with the cost of products and services government spends on us to contribute to an agreed upon minimum standard of living. Again, labor costs increase substantially, increasing the retail prices of products and services across the board.
Are we not back where we started from? The bad news is employers pay the increase in the minimum wage. However the good news is that the money saved in government entitlements is returned to us taxpayers in the form of lower tax rates. Because we have more money to spend in our pockets, our demand for more stuff to buy goes up. This is good... No?
Now employers have more money to spend on creating a supply of services and stuff to meet our demands for more stuff. Hey, wait! Isn’t that “supply and demand,” the subject of economics? I remember that from high school. But wait, there’s more!
Now when more people buy more stuff and services they say our economy expands, benefiting everyone's standard of living. So fancy that.
Now my idea should satisfy you Heartless Right Wing Conservatives by lowering taxes and you Bleeding Heart Left Wing Liberals by raising the minimum wage.
Your Thoughts ?
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