[Winder]

Correlation is not causation. What you say may be correct, but there is a lot more going on. A lot of it revolves around the increase in automation (more engineers needed of design it, and less factory workers needed because of it). There used to be secretaries, factory workers, people to pump your gas, etc. Many of these jobs required a low amount of skill (and some of them paid pretty good). Now the low skill jobs available are retail and fast food (there are others also, but the pool is much smaller). Since these used to be the jobs of kids, they were accustomed to paying a small wage (and that carries over to today). Yes, the increase in wages has helped this transition, but I believe it would have happened anyway.

Then tell me what your causal relationship is? We have literally spent trillions fighting poverty and it has gotten worse. The problem has accelerated. If government programs were the answer; if spending money was the answer then why have we not seen a decrease in poverty and an increase in employment for workers with limited skills as we increased spending? Why has poverty, unemployment, & wage disparity risen with government spending?

The facts are at odds with what you are saying. You are saying that because of changes in technology (automation) there is a smaller number of the low skilled jobs and that is causing unemployment among workers with limited skills. You are stating that the "pool is much smaller". If that were true we would not have seen a dramatic increase in Hispanic labor during the same time period. Hispanic labor has increased because there is significant demand for low skill labor in this country. Hispanics have a lower per-capita income than blacks, but a higher household income because more of them are working and they have larger households. They make less money (per person) but by living together they can pool resources, split living expenses and as a group have a higher standard of living that they could as individuals.

If you don't get paid enough to pay the bills, whats the point? If I was offered $5/hour to do a job, I would laugh at the person. That is just enough to pay rent in many places. If I had no choice but to take it, I would probably have to begin a life of crime to put food on the table. In total, I agree with a lot of what you said (raising the minimum wage does have some adverse effects), but I do not think paying our lowest income workers less is going to fix anything (except increasing crime). I think our nation has three choices. We can tax the rich and give welfare to the poor, we can find a way to give companies incentives to pay a living wage, or we can forget about the poor and not provide for them at all (which would be very sad for one of the richest countries in the world).

I like what you say here. You might not take that $5.00 an hour job, but someone else might. Are you saying they don't have the right to accept that job? If I am willing to accept a job for $5.00 an hour what right do you have to tell me I can't? Another point that is relevant to your comments is about paying the rent. It is not enough to pay the rent. Historically American households have been larger. Often we had 3+ working adults in a household supporting a family. Prior to the Great Society black 2 parent families were as common as white 2 parent families. Poor people stayed together and raised their children. They had economic incentive to work together and the children of these people are many times more likely to succeed in life. You are right in that these jobs are not enough to buy a house, new car, Direct TV with the NFL package, and steak dinners every night. It does encourage families to stay together, develop relationship skills, and produce children who are better prepared to succeed in society.

Another point that is relevant is that these low paying jobs are not permanent. People talk about the bottom 20% like it is a fixed class. A college student working a part-time job is in the bottom 20% of income earners in this country, but it is just temporary. Everyone starts somewhere. For people with no education and no skills their only option is a low paying job where they can learn and develop skills that will allow them to move up. Those $5.00 (parking lot attendant) an hour jobs don't attract workers like you. There is less competition for those jobs because people with better skills wont take them. But what if minimum wage was raised to $25.00 per hour. It is the same job, but now it pays five times more. Now are you interested? Now do you apply? Now if the guy with no high school diploma and not previous job experience applies for that job and you apply for that job, who do you think will get that job? I assume you would take $52,000 a year to watch a parking lot. By doing so you would be taking that job and forcing the unskilled applicant to keep looking, or drop out of the labor market and move to welfare.. As the minimum wage rises unskilled workers are forced to compete with skilled workers who previously were not interested in those jobs.

[Winder]

I agree with this. There is nothing wrong with the current minimum wage. My comment in the post above was that getting rid of the minimum wage would not be a good idea, because corporations and businesses will likely take advantage and pay a very low wage (I think minimum wage right now is about right, and we should tack it to inflation).

If this were true then why don't we see this across all industries? Why don't hospitals take advantage of doctors and pay them half of the current rate? Why doesn't he board of Apple take advantage of Cook and cut his pay to $40,000 a year? Why do Hispanic workers flock to this country to fight for those low paying jobs? If you told them they were being taken advantage of do you think they would go back home? You are projecting your standards on other people. Just because you think someone is being taken advantage of does not mean that they are. Those Hispanic workers risk coming here because they can make 5x as much money in the USA as they can in their home country. They risk coming here because it is the best opportunity they have.

My comment further above was that the political conversation should should change from this strange idea of efficiency we have (i.e. that it is inefficient for a person to make $12.00 if they are a janitor, and thus we must bust unions and decrease their pay). If there is a janitor that works hard 8 hours a day, 40 hours a week, I think they deserve more money than minimum wage. This does not have to be done through an increase in minimum wage, and I do not think that an increase in minimum wage is necessarily the correct way to go about it. However, I would like to see the government instinctive companies in the service industry, and other industries who pay a very low wage to pay a bit better (so create incentives instead of a mandate).

People don't "deserve" anything other than what they earn. If I have a dozen people willing to be a janitor for $8.00 per hour why do I have to pay $12.00. I can hire 2 janitors at $12.00 each ($24.00 per hour total), or 3 janitors at $8.00 an hour ($24.00 per hour total labor cost). What do I do? 3 janitors means the the lives of 3 families have been improved. Or do we only improve the lives of 2, but at a greater amount? Since you think we should play God and dictate who gets what and how much, what is your decision. Do you let one family go hungry so two other families are better off?

Basically, I would like to see the conversation changed from whether or not we should give the poor different forms of welfare to how we can give businesses incentives to pay them a bit more so that they do not need welfare, and so that people have a sense of ownership over there money (i.e. when you feel you earned something you generally take more pride in it than something you are given). My understanding is that years ago low skilled worker could work in a factory and live a pretty pretty comfortable life. I think we need to find a way of creating more low skill jobs that pay enough to provide a comfortable life.

Minimum wage has the effect of reducing pay for many people. If I decide I am going to hire 2 assistants this summer and I can afford to pay $20.00 per hour (total) and minimum wage is $10.00 per-hour. I can only afford to pay both of them minimum wage. One of them assisted me last summer and is in the 3rd year of the commercial photography program at MTSU. She is worth way more than $10.00 and hour, but I can't afford to pay her more that. I can hope she takes the job for a lot less than she is worth, or I can not hire the other guy who has no experience and pay her $15.00 per hour. I have a limited budget. I could pay her $12.00 and she would probably be happy and then pay the other guy $8.00 but that is illegal. Someone might argue that she could go somewhere else and make $15.00 per hour and I could hire 2 guys at $10.00 per hour and everyone wins, but there is a problem with that. She is worth $15.00 an hour to me because of familiarity. She knows how I setup, she knows how I work, and I know how good she is with PS and lighting. I wont spend the first month of the summer figuring out what she can and can't do. That has value to me that does not exist with another employer. In a free world I could pay her $12.00 - $13.00 per hour and find a 1st year student to pay $7.00 - $8.00 per hour. But if minimum wage is $10.00 per hour then that would be illegal even though everyone benefits from it. With a $10.00 minimum wage she would have to make less money than she is worth because the law requires me to pay the 1st year student $10.00 per hour. Why is this a good thing? Obviously we don't live in a free world.

The idea that we should all have more money is Utopian at best. That money has to come from someone. It is not unlimited. If you think people should make more money then I encourage you to open up you checkbook and make a difference. You are free to give as much as you want. How many times have you given the clerk at the grocery story an extra $5.00 because she deserves it? When you walk past that janitor that you say is underpaid how many times have you opened your wallet to rectify the problem and actually make a difference? I would guess the answer is never. I would guess that you think these people should be paid more as long as it is someone else's money being used. That seems to be the theme with socialist ideas.

[kswier]

Since you think we should play God and dictate who gets what and how much, what is your decision. Do you let one family go hungry so two other families are better off?

This is not what I said at all. What I said is that I think it is in our nations best interest to to try and instinctive companies to pay a higher wage. We lost a lot of good paying low skill jobs with the loss of manufacturing. This segment of society has been driven further into poverty over the years because of this, and it would be good to reverse the trend. The governments approach has been increasing the welfare system. I would like to see the government start talking about a different approach; using the mechanisms at their disposal (i.e. the tax code, welfare, etc) to instinctive some companies to pay a bit more (decreasing people need for things like food-stamps, etc.). This is not playing God (and the free market is not God, and is not necessarily a perfect system), this is engineering (using our best knowledge of the system to make it better). Yes, there are detriments to this approach (such as inflation), but I also believe there are benefits that outweigh he detriments (though I would have to talk to a bunch of economists to fully understand the tradeoffs).

I would guess the answer is never. I would guess that you think these people should be paid more as long as it is someone else's money being used. That seems to be the theme with socialist ideas.

We all know this is not a systematic solution. It is like telling Warren Buffett that he should give all his money to help pay down the US debt. This will not solve the debt, because he could throw all his money at it and only make a small dent. And when I am eating at a restaurant I do often give very generous tips (20%-30%), because I know that in general the workers could use the money. And lastly, in what way are the ideas I stated above socialist? I am not advocating that everybody should make the same amount of money. I am not advocating that everybody should share everything. All I am saying is that with the increase in automation, we have lost many decently paying low skill jobs. I think it is in Americas best interest ways to find ways of giving those that are depending on welfare enough to cover their own expenses. This is not socialism by any stretch of the imagination.

[kswier]

Then tell me what your causal relationship is?

I don't know the causal relationship . If I did I would be rich. I do not study the problem, and if you look at my posts in other threads, you will see that that I readily admit that I must defer the final verdict to the experts. All I am saying is there is a lot more going on, and that our economy has undergone a complete transformation in the last number of years.

But what if minimum wage was raised to $25.00 per hour.

I have no idea where this number is coming from (you must have a much different view of a living wage than I have ). I believe that a living age starts at around $12.00 per hour (if you calculate expenses this number allows a person to live on their own purchase their needs, and have a bit leftover for savings so they are not forced to live paycheck to paycheck, in most places in the US).

I like what you say here. You might not take that $5.00 an hour job, but someone else might. Are you saying they don't have the right to accept that job? If I am willing to accept a job for $5.00 an hour what right do you have to tell me I can't?

I think they should be able to, but there are some problems with that approach. The biggest problem comes then the only choices are $5.00 an hour jobs (or $8.00 jobs for that matter). I would be ok with abolishing minimum wage laws if there were laws that supported workers forming unions and negotiating for higher pay. However, unions can go rampant with power as well.

Another point that is relevant is that these low paying jobs are not permanent. People talk about the bottom 20% like it is a fixed class.

I agree with this, and this is why I do not advocate an increase to the minimum wage (because you would kill any high school students' chance at finding a job). The problem is when when low paying jobs become permanent, and there are few alternatives for a large segment of the population.

I will end by saying that I think you have a lot of very good points in your posts (well reasoned arguments). There are detriments to the minimum wage, and it is important to understand them. There are also benefits, and it is important to understand those as well. The message I have been trying to convey is that the political message (and action) often revolves around very simple tradeoffs (i.e. increase welfare to help the poor, decrease taxes (and welfare with it) to help businesses spur job growth, raise the minimum wage to help low income workers make more). I am wondering if there are more creative solutions to some of these problems (i.e. decrease the need for welfare instead of increasing welfare, structure taxes to encourage job growth instead of just cutting or expanding taxes, create an employment system that helps cycle the unemployed back into the workforce, etc.). The creative solutions are often harder and more complex than the simple 'solutions', and I think they often get lost behind political rhetoric.

---

Last edited by kswier; 04-20-2012 at 02:46 PM.

[jeffkrol]

The overall median personal income for all individuals over the age of 18 was $24,062[4] ($32,140 for those age 25 or above) in the year 2005.[5] The overall median income for all 155 million persons over the age of 15 who worked with earnings in 2005 was $28,567.[6]

As a reference point, the minimum wage rate in 2009 was $7.25 per hour or $15,080 for the 2080 hours in a typical work year. The minimum wage is a little more than the poverty level for the 1 person family unit and about 50% of the poverty level for a family of four (see Poverty in the United States). Annual wages of $30,160; $45,240; $75,400; $150,800 and $1.5M correspond to 2, 3, 5, 10 and 100 times minimum wage respectively.[7]

It's not JUST for College students/high school anymore..........
for interest........


http://en.wikipedia.org/wiki/Personal_income_in_the_United_States

[mikemike]

It's not JUST for College students/high school anymore..........
for interest........


Personal income in the United States - Wikipedia, the free encyclopedia

Should the national minimum wage be set at a level that prices high schoolers and college students out of the labor market, especially in low cost of living areas?

[jeffkrol]

O/T Mini-blow for sanity..

Chicago Sun Times quote.......

Three cheers for the shareholders who voted “no” on the pay and perks of Citigroup’s top executives. It’s only an advisory vote, but if enough of us shareholders do likewise, boards of directors may start to get the message.

When the CEO’s paycheck is 500 times that of his company’s lowest-paid full-time employee, something is obscenely out of whack. No matter how smart, dynamic or hard-working the big guy may be, the company’s success is still dependent upon the diligent efforts of those troops in the trenches.

Dan McGuire, Bensenville

[jeffkrol]

Should the national minimum wage be set at a level that prices high schoolers and college students out of the labor market, especially in low cost of living areas?

There now working parents can support them........ as it used to be. (or PELL grants).
Certainly would give me incentive to excel in school.........

[mikemike]

There now working parents can support them........ as it used to be. (or PELL grants).
Certainly would give me incentive to excel in school.........

What a typical "me, Me, ME!" baby boomer attitude. To hell with the future generations' ability to gain any work experience whatsoever as long as my minimum wage paycheck is a little bit more.

[Winder]

This is not what I said at all. What I said is that I think it is in our nations best interest to to try and instinctive companies to pay a higher wage. We lost a lot of good paying low skill jobs with the loss of manufacturing. This segment of society has been driven further into poverty over the years because of this, and it would be good to reverse the trend. The governments approach has been increasing the welfare system. I would like to see the government start talking about a different approach; using the mechanisms at their disposal (i.e. the tax code, welfare, etc) to instinctive some companies to pay a bit more (decreasing people need for things like food-stamps, etc.). This is not playing God (and the free market is not God, and is not necessarily a perfect system), this is engineering (using our best knowledge of the system to make it better). Yes, there are detriments to this approach (such as inflation), but I also believe there are benefits that outweigh he detriments (though I would have to talk to a bunch of economists to fully understand the tradeoffs).

1. I assume you mean "provide incentives for companies to pay higher wages". I'm not sure what you mean by "instinctive companies" but you keep saying that so please clarify.
2. Jobs have not been lost. The roles of employees have changed with shifts in the economies. If your grandfather was a typewriter repairman, and your father was a typewriter repairman, and all you ever wanted to do in life is be a typewriter repairman then you have every right to follow that dream. BUT society has no obligation to subsidize your dream of being a typewriter repairman. I was in grad school with a guy who's family (3 generations) worked in textile mills. The reason he was in grad school was because it (textiles) was a dying industry. Shifts in the economy forced him to better himself and seek higher education. Is that a bad thing? Society and its population have to evolve with changes.
3. Please provide a example of how we can "instinctive companies" to pay more for a net gain to society? Current programs increase unemployment, promote welfare, reduce incentives to purse education, and make labor unions richer and more powerful. Explain the mechanics of your idea.
4. Explain why you believe the benefits outweigh the cost to society. Show me how this is a net gain?
5. Answer the question about playing God. Which do you chose? Do you hire 2 janitors at $12.00 and hours or 3 and $8.00 and hour? Which choice makes society better off? Minimum wage forces that question. If minimum wage is $12.00 per hour then I am forced to hire 2 janitors and we have pushed the 3 family into greater poverty. So we create welfare so support the people that minimum wage has pushed out of society.

We all know this is not a systematic solution. It is like telling Warren Buffett that he should give all his money to help pay down the US debt. This will not solve the debt, because he could throw all his money at it and only make a small dent. And when I am eating at a restaurant I do often give very generous tips (20%-30%), because I know that in general the workers could use the money. And lastly, in what way are the ideas I stated above socialist? I am not advocating that everybody should make the same amount of money. I am not advocating that everybody should share everything. All I am saying is that with the increase in automation, we have lost many decently paying low skill jobs. I think it is in Americas best interest ways to find ways of giving those that are depending on welfare enough to cover their own expenses. This is not socialism by any stretch of the imagination.

1. It is very much a socialist idea. Socialism is grounded in a government solution to social problems. All of your ideas are base on government action. All collectivists (socialist, fascists, Marxists) believe in the same method of controlling society. Minimum wage is very much a control method.
2. A "Tip" is paid for services rendered. So when you tip 20-30% are you doing it even with the service is bad? A person can provide bad service and still need the money. Or do you base the amount of your tip on the quality of service that the server provided? Tipping based on the performance of the server is very much a free market idea. I would be willing to bet that if you receive bad service you are not tipping 30%. You are not basing your tip on that persons need. You are basing it on the quality of service rendered.
3. It is in America's best interest to get people off of welfare, but I have yet to see government propose a solution that has not made the problem worse. If you think government programs are the answer to the problem then you are very much a socialist.

[jeffkrol]

What a typical "me, Me, ME!" baby boomer attitude. To hell with the future generations' ability to gain any work experience whatsoever as long as my minimum wage paycheck is a little bit more.

The only thing my work in high school taught me (unloading sod at a nursery) was to go to school,
and dry sod is really really dirty....
and actually my parents didn't discourage me from working or not working in college but stressed college was more important than working on the loading docks or as a Pinkerton guard..

Probably would have supported me through those early years

BUT I UNDERSTOOD it was not their job....... See they taught me well.............

most College jobs (if not directly related to your field i.e. internships ect.) are pretty worthless except for some pin money and socializing outside of academia (good life experience but I certainly don't consider it indispensable)

Nor will I ever aspire to "busboy" "telemarketing" or "hauling 1/2bbls of beer " or "catering" again.........

I did work as an Inorganic Chemist (my radioactive boots are buried somewhere out west ) that would have been good BUT since the sniveling owner's son (actually he did snivel habitually, and was "plant manager with his second job as an usher at Mil. Co. Stadium, a job much more fitting for his talents ) told me "that's all we can pay you" I quit as soon as I could (small independent family run business that was corrupt as it was profitable) ...

No Mikemike I'd bet I put my life and body more in harms way than you ever did, and to be honest.. probably didn't HAVE TO... I wouldn't have minded being free from that BUT my moral compass was strong. Again thanks to my parents who "led by example".....

Bottom line: you should already have the "tools" to exceed from your parents......it is not rocket science..

[mikemike]

The only thing my work in high school taught me (unloading sod at a nursery) was to go to school,
and dry sod is really really dirty....
and actually my parents didn't discourage me from working or not working in college but stressed college was more important than working on the loading docks or as a Pinkerton guard..

Probably would have supported me through those early years

BUT I UNDERSTOOD it was not their job....... See they taught me well.............

most College jobs (if not directly related to your field i.e. internships ect.) are pretty worthless except for some pin money and socializing outside of academia (good life experience but I certainly don't consider it indispensable)

Nor will I ever aspire to "busboy" "telemarketing" or "hauling 1/2bbls of beer " or "catering" again.........

I did work as an Inorganic Chemist (my radioactive boots are buried somewhere out west ) that would have been good BUT since the sniveling owner's son (actually he did snivel habitually, and was "plant manager with his second job as an usher at Mil. Co. Stadium, a job much more fitting for his talents ) told me "that's all we can pay you" I quit as soon as I could (small independent family run business that was corrupt as it was profitable) ...

No Mikemike I'd bet I put my life and body more in harms way than you ever did, and to be honest.. probably didn't HAVE TO... I wouldn't have minded being free from that BUT my moral compass was strong. Again thanks to my parents who "led by example".....

Bottom line: you should already have the "tools" to exceed from your parents......it is not rocket science..

If all a future professional learns from working a minimum wage job is "how the other side lives," that is a valuable life experience. Maybe they will have a little more humble attitude and have a few skills that help them down the road to cut their own grass, fix a leaky faucet, paint something for themselves, etc. I would say you can also learn a few things like professionalism such as how to find a job, how to apply and interview, showing up on time and finishing your shift even on those days when you don't want to, proper customer service, and respect for authority in a low consequence situation you have a big leg up on someone whose only thing on their resume is a college degree when looking for your first professional job in your desired career field.

[Winder]

I don't know the causal relationship . If I dis I would be rich. I do not study the problem, and if you look at my posts in other threads, you will see that that I readily admit that I must defer the final verdict to the experts. All I am saying is there is a lot more going on than, and that our economy has undergone a complete transformation in the last number of years.

But that is not relevant. We moved from an hunter-gather society, to an agrarian society, into the industrial society, to a modern automated society, and we are now moving into the information age. The idea that changes in society or technological advancements justify a lost class sound good on the surface, but when you look deeper you find that the argument does not hold up.

I have no idea where this number is coming from (you must have a much different view of a living wage than I have ). I believe that a living age starts at around $12.00 per hour (if you calculate expenses this number allows a person to live on their own purchase their needs, and have a bit leftover for savings so they are not forced to live paycheck to paycheck, in most places in the US).

The number itself is not relevant. For each person the number will be different. Different people are willing to work for different amounts and people should have the right to determine what that amount is for themselves. But you did not answer the question. Would you take the job if that was the amount? The living wage that you support will make some people poorer, and it will push others out of work and on to welfare. Why do you think this is a good thing? Answer the original question about the janitors. If I have 3 people willing to work for $8.00 and hour, but if the law requires I pay $12.00 then I can only hire 2 of those 3 if my budget is $24.00 per hour. Without your $12.00 living wage I could hire all three for $8.00. Why is it better to push one onto welfare in order pay the other two more money?

I think they should be able to, but there are some problems with that approach. The biggest problem comes then the only choices are $5.00 an hour jobs (or $8.00 jobs for that matter). I would be ok with abolishing minimum wage laws if there were laws that supported workers forming unions and negotiating for higher pay. However, unions can go rampant with power as well.

A minimum wage or living wage prevents this from happening. There are states with laws that support labor unions. They also happen to be the states (like Michigan) with really high unemployment. The unions have destroyed Detroit. They have sucked the life out of the American auto industry.

I agree with this, and this is why I do not advocate an increase to the minimum wage (because you would kill any high school students' chance at finding a job). The problem is when when low paying jobs become permanent, and there are few alternatives for a large segment of the population.

I will end by saying that I think you have a lot of very good points in your posts (well reasoned arguments). There are detriments to the minimum wage, and it is important to understand them. There are also benefits, and it is important to understand those as well. The message I have been trying to convey is that the political message (and action) often revolves around very simple tradeoffs (i.e. increase welfare to help the poor, decrease taxes (and welfare with it) to help businesses spur job growth, raise the minimum wage to help low income workers make more). I am wondering if there are more creative solutions to some of these problems (i.e. decrease the need for welfare instead of increasing welfare, structure taxes to encourage job growth instead of just cutting or expanding taxes, create an employment system that helps cycle the unemployed back into the workforce, etc.). The creative solutions are often harder and more complex than the simple 'solutions', and I think they often get lost behind political rhetoric.

1. What exactly are the benefits? The detriments of the minimum wage greatly out weight the advantages.
2. How do you create a system that "cycles" the unemployed back into the workforce?

I understand that you don't have the answers. I just want people to really think about what the real result is of some of these programs really are. People who don't have the answers are the ones voting for those who claim that they do, and yet they don't challenge these ideas. The simplistic idea that by giving person X more money person X is better off may be true over the short run, but have we harmed person Y and Z in the process? I would also argue that person X is often worse off in the long run. If enough people claim minimum wage is a "good thing" people start believing it without challenging it. Show me the economic study by the big name economist that proves welfare is a net gain for the economy. Show me the one that proves minimum wage is a net gain for society.

[kswier]

The only thing my work in high school taught me (unloading sod at a nursery) was to go to school,
and dry sod is really really dirty....

I think you learned more then me....I learned that you should never order a fish sandwich from a fast food place unless it is during peak hours...Trust me, it is something you do not want to do.

The second lesson I learned from watching the night shift manager at the place I worked. If you are a manager at a fast food place, and you shoot your employees with a bb gun, you have to face the consequences...and get transferred to a different store .

[kswier]

I just want people to really think about what the real result is of some of these programs really are. People who don't have the answers are the ones voting for those who claim that they do, and yet they don't challenge these ideas.

This is precisely what my intentions were; to challenge the current political ideas that are floating around. From my perspective there are two main political themes: that the rich should pay more in taxes to help bolster and/or maintain government services, or that the government should drastically decrease in size (which would most likely result in a decrease in welfare). I believe there are approaches that are more nuanced that may provide benefits above those discussed in congress.

My conversation throughout has really been a question (I could have probably done a better job of clarifying this early on by taking more time to write clearly and concisely). The question is built on the philosophy that there is a hidden cost when companies pay a low wage to their workers (particularly to low wage workers with kids). This hidden cost is often paid to workers in the form of food stamps, housing subsidies, etc; and is paid for by tax payers (for better or for worse). This welfare, in effect, becomes a portion of the workers wage that is paid for by the government instead of their employer. One way of decreasing the amount of welfare working adults receive is to increase their wages (and no, I do not think this should be a mandatory increase in minimum wage).

The question is whether the government could provide incentives to employers of low wage workers to increase wages. This could be done through tax incentives, or any another way that people more inventive than myself can think of (If this is a good idea, the decrease in welfare costs should pay for the tax incentives). There are a million ways the formula used to generate the incentives could be designed. For instance, the formula could only apply to the lowest paid workers, the formula could only apply to a certain percentage of workers (so if x% of employees made more than a given amount, the company would receive the full tax rebate allowing new employees and students to be hired at a lower wage), etc. This is just one idea, and may not be the best idea. I have seen research on the effects of providing welfare to to low wage earners; however, I have not seen research exploring the costs and benefits of funneling welfare money through private employers (in the form of incentives). There may be a perfectly valid reason why this research does not exist, or I may not be looking in the correct locations, but I have not seen any of it.

My hypothesis is that this approach could have a few benefits. First, if employees feel they are earning their money and have full control over it, they may spend it more judiciously. Furthermore, it may provide low wage earners with the flexibility to direct their money toward their needs at a particular point in time (i.e. eat cheaper for a week and direct the savings toward a car repair). Secondly, I believe studies have shown that higher wages can incentivise workers. Thus, employers may be willing to pay a portion of the wage increase out of pocket (so long as their workers become more effective with the increase in pay), resulting in a system where the employer and government share welfare costs.

There are also some problems this approach may create. The first problem I can think of is that some of the wage increases could go to young single adults and teenagers, who would have earned little or no welfare under the current system, instead of those with families (assuming the plan described above where only a certain percentage of workers are permitted to pay minimum wage). However, I hypothesize that older workers (the ones more likely to have families) would eventually work their way into higher wage positions.

In the end it is a research idea. I do not know if it is good or bad, and I do not have a good understanding of the benefits and detriments. What I am doing is asking a question that I believe has a very nuanced answer. And I wish our politicians would start asking questions and thinking of issues outside the current republican vs. democrat debate. Not all ideas will be good, but some might be great. There may be holes in my reasoning that I am not seeing, but I do not think it is a crazy thought. Does this make me uninformed...I don't think so (if uninformed people are people who think outside the box, then I think our nation is in real trouble). Does claiming that I do not understand all the nuances of economics make me an uninformed...actually the answer would have to be yes by definition of uninformed (but at least I am willing to listen and learn, and challenge ideas)