Save Social Security by Raising the Minimum Wage to $8 per hour
By G Edward Cook
Created 2006-01-03 02:58
Save Social Security by Raising the MinimumWage!!
Raising the minimum wage from $5.15 per hour to $8.00 could notonly help millions of Americans but could save our Social Security.
I feel the minimum wage of $5.15 per hour is immoral. A personworking forty hours per week, 52 weeks a year clears almost enough topay for medical insurance for his family. This is a disgrace! Theminimum wage hasn't gone up in years. We need to raise the minimumwage to $8.00 per hour over three years then raise it another 25 centsper hour each year thereafter.
Raising the minimum wage to $8.00 would sure up social securitybecause of the added taxes paid to the Social Security Fund. Thisamount would be more than you would think.
A worker earning the minimum wage of $8.00 would contribute anextra $712.28 per year to the Social Security fund. The worker wouldpay $364.14 and his employer would pay the same. The worker wouldstill clear an increase of over $100 per week in his paycheck.
The government is saying our Social Security Trust Fund will run outin about forty years. I have estimated the extra money collected by allthe people working for minimum wage and the extra earned by thoseearning less than $8.00 per hour over the next 40 years along with a verymodest interest would equal trillions of dollars.
Thanks for your support,G Edward Cook
Wednesday, January 04, 2006
Subscribe to:
Post Comments (Atom)
Posts
3 comments:
If raising the minimum wage is such a moral thing, why wait to raise it above $8? Why not raise it immediately to $100? Wouldn't that be more moral?
The whole idea is a utopian fantasy based on the belief that we can alter the laws of economics. Like the law of gravity, economics governs us, not the other way around, and we ignore this at our peril.
What is immoral is to use state coercion to interfere with voluntary contracts between employer and employee, ultimately eliminating entry level jobs for unskilled American workers by pricing them out of the market.
David Hays
Grand Coteau
Richard, I completely agree with your statement, as we discussed tonight, however GumboFile, I have to say .. this is the most backwards way of thinking that I could possibly consider. The fact is minimum wage jobs are always going to be "less knowledge based" and more "physical" based. Given that we are allowing employers a pass on this low cost labor they are not raising their standards. While I am sure that raising minimum wage will effect the price of a big Mac, it will not effect things such as RENT, your mortgage, and many other items that those who have never had to only deal with minimum wage have to deal with. There should definitely be a raise to this. If Congress gets to vote each session for "cost of living" increases then they should also have to vote for Minimum wage "cost of living" increases.
Companies should have to be full partners in our communities and they are not stepping up. It is a shame that we must force this, but some things must be done. Phase it in, or just raise it - either way it must be done. People are suffering.
Tonight Congressman Boustany said he would vote against any increase to minimum wage and that he would also support the repeal of all minimum wage standards. This is the wrong way to go. Unless we want even more poor, more sickness and more desperation.
So are you saying that, because entry level jobs are "less knowledge based and more physical based", it's ok to eliminate them by way of the minimum wage?
Another way to look at a minimum wage is to call it a price floor, which is a price control. A price floor, which keeps a price from falling to it's market level, creates a glut. A minimum wage, which is a price floor on labor, creates a glut of labor. The number of available workers will exceed the number of available jobs.
Suppose you are able to employ two unskilled entry level workers at $5.15/hour each. And suppose one skilled worker can do the same work as the two unskilled workers, but he charges $15/hour. Most people will employ the more expensive worker because the extra wage per hour is more than offset by the savings in non-wage cost per worker (taxes, insurance, extra supervision, etc). So even at $5.15/hour some unskilled workers are priced out of a job.
However, because some will employ the two lower paid unskilled workers, to the higher paid workers the lower paid workers are competition. Skilled workers don't like unskilled, lower paid competition, so they launch a minimum wage campaign: how dare anyone pay less than $8/hour?!
With the new price floor on labor, even more marginal workers are unemployed while the demand rises for the "higher quality" labor product of the skilled workers, meaning they can demand an even higher wage. Many employers will decide that those who are currently making less than $8/hour are not worth $8/hour and those unfortunate workers will be out of a job. An employer could possibly even benefit if, as in our example above, he hires one skilled worker to replace two unskilled workers. The employer would thus get more marginal utility and productivity out of his payroll investment. However, many marginal businesses will be unable to absorb an increase in payroll, thus fewer local small businesses. Any wonder why the chairman of Wal-Mart has come out in favor of a higher minimum wage? It'll help eliminate some of their competition.
The minimum wage does absolutely no good and much harm to unskilled workers. It does, however, make politicians look good and feel good. Your passionate arguments sound and feel good but they don't pass the test of logic and reason. You ignore the real consequences of the minimum wage at the expense of those you claim you want to help. That's probably partly due to the fact that you're probably not an unskilled worker.
David Hays
Grand Coteau
Post a Comment