How much should minimum wage be?

[brianeyci]

And the response to this would be a negative income tax. The gist of it is that as long as you work, the government takes a percentage of your earnings (let's say 20%) but also gives you a set amount of money, which would be enough to live on (let's say 12K CAD yearly). Therefore you can go stack dog turds for $1 per hour and make 2000 bucks a year and give 400 of that to the government, but they'll also give you $11600 back, and you're making $13200 a year. (obviously higher-income people would pay more in taxes than they get back)

Since anyone giving you that buck per hour to stack those dog turds is making money off you doing that, and since no one would hire someone to do that for $7.65 an hour, there's an economic gain where there wasn't one before.

Benefits? Minimum wage eliminated, and since it's basically a flat tax, all the benefits of tax code simplification also ensue (i.e. less loopholes and writeoffs equals more tax revenue). Everyone who works is guaranteed a living income (not wage). No one will want to hire illegal immigrants, because any unskilled citizen entitled to the tax refund will actually work for less than any immigrant. Unemployment should all but vanish.

What stops people from creating bullshit jobs for their relatives at 1 dollar an hour and getting full benefits, or deliberately looking for bullshit jobs at 1 dollar an hour for full benefits. I don't think living income would work either because different areas have different costs of living.

<edit>I guess the only real argument for minimum wage is DW's point that it stops the illegal immigrant labour. Since illegal immigrants will always be willing to work for less, it undermines the economy to allow them to take jobs from tax paying citizens. Also my earlier point about "you have to wonder about their working conditions if they pay a dollar an hour" is true because I can mention sweatshops that pay a few dollars whose working conditions are terrible. It costs a certain amount of money to make the workplace safe and conditions humane, definitely more than $1 or $2.</edit>

Brian

[unigolyn]

What stops people from creating bullshit jobs for their relatives at 1 dollar an hour and getting full benefits, or deliberately looking for bullshit jobs at 1 dollar an hour for full benefits. I don't think living income would work either because different areas have different costs of living.

Two factors - a private citizen couldn't just hire someone and give them 8 bucks a week cash, or claim to do so. There would have to be bookkeeping and actual contracts, including liability for any work-related accident caused by negligence on the part of the employer. Also, a living income might be enough to survive on, but a very small number of people would actually be content making just that, therefore most of the workforce would strive to find higher-paying jobs. It's just that they wouldn't be sitting on their asses collecting welfare checks but would actually contribute something to society, no matter how slightly.

<edit>As to living costs differing in different areas, you could use a national mean of sorts. Anyone not happy with their situation is welcome to move to a less expensive area. Obviously, if a person is incapable of finding a job in Toronto that enables him to actually live in Toronto, he should head over to Saskatoon, because whatever form government handouts come in, welfare checks or a negative income tax, living in an expensive area is counterproductive. Also, one can always get a roommate or two to share living costs. A two-bedroom apt split between two people is cheaper than paying for a bachelor apt, and a three-bedroom split between three people is cheaper still, and you also save a great deal on groceries by being able to buy it in larger amounts.</edit>

I guess the only real argument for minimum wage is DW's point that it stops the illegal immigrant labour. Since illegal immigrants will always be willing to work for less, it undermines the economy to allow them to take jobs from tax paying citizens. Also my earlier point about "you have to wonder about their working conditions if they pay a dollar an hour" is true because I can mention sweatshops that pay a few dollars whose working conditions are terrible. It costs a certain amount of money to make the workplace safe and conditions humane, definitely more than $1 or $2.

I don't see what the hourly rate paid to employees has to do with making the workplace safe. The workplace is safe because employers are required to keep them safe by law, not because the minimum wage is so-and-so. The reason why sweatshops have dreadful conditions in third-world-countries isn't their low wages, it's the lack of safety legislationj and enforcement. If anything, paying the workers less means more money for ensuring safe working conditions, or other benefits, such as a company bus picking workers up in the morning.

The main point is still that most people don't work for minimum wage, but more, and therefore won't have their salaries garnished. Anyone making close to the current minimum wage will not only be practically tax-exempt, but will also receive a portion of that annual check. Those who are currently making base minimum wage (i.e. teenagers working at McDonalds) might be paid less by their employer, but they'll receive additional funds from the government, and everyone currently out of work only needs to find a job, any job, to procure a living income. This would also help curb substance abuse among welfare recipients, who largely start to drink and do drugs because there's fuck all else to do.

<edit>Basically, if a factory is currently employing 10 people at 7.65 an hour, and spending x dollars a month on safety implementations, they could, with no minimum wage laws, employ 20 people at 3.50 an hour and save 6 dollars and 50 cents an hour. The cost of safety implementations wil not double, but will stay roughly the same. With negative income tax, none of these 20 employees is actually making less money than the 10 people who worked for minimum wage, but more.</edit>

[unigolyn]

And if anyone's wondering what the cost of giving unemployed people 12 grand annually for $1/hour jobs (which the vast majority wouldn't be anyway), according to 2001 census data, there are about a million unemployed members of the workforce in Canada, which means giving them that money would cost 12 billion per year. For a country with a GDP of over one trillion US dollars, this is chump change.

[CmdrWilkens]

What stops people from creating bullshit jobs for their relatives at 1 dollar an hour and getting full benefits, or deliberately looking for bullshit jobs at 1 dollar an hour for full benefits. I don't think living income would work either because different areas have different costs of living.

Because the employer would have to pay out payroll taxes as well as social security and medicare for each employee. There are reasons (aside from just MRP issues) why companies tend to limit payroll...it costs money. Moreover since the person offering the job would have to issue a W-2 and since dependents or relatives can be readily identified the government would take about 30 seconds to put together a fraud case.

[brianeyci]

And if anyone's wondering what the cost of giving unemployed people 12 grand annually for $1/hour jobs (which the vast majority wouldn't be anyway), according to 2001 census data, there are about a million unemployed members of the workforce in Canada, which means giving them that money would cost 12 billion per year. For a country with a GDP of over one trillion US dollars, this is chump change.

Jean Chretien wanted this kind of "living income" scheme. I don't know the specifics but I know it was more than 12 billion. And 12 billion is not chump change, not when the Federal Surplus is only 9 billion a year and Alberta the oil rich fundie fuckers are rolling in only 3 billion and everybody in Alberta gets 400 dollar cheques.

If it could be done it would have been in Canada. And if it's going to be done, I expect Canada to be the first, but not under the Conservatives. It would take a Liberal government, with the NDP holding the balance of power and blackmailing the government. And the NDP probably believe in minimum wage.

<edit>Actually, it might be done with a Conservative majority. It could happen... hm. I'm so used to thinking of the NDP as the only political party capable of social change, seen too many of Jack Layton's speeches.</edit>

Brian