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Here's the Best Minimum Wage Increase Idea I've Ever Heard...

Can't take credit for this but it's gold - A recent episode of the Recode/Decode podcast featuring Bradley Tusk, the 3rd Party Legal Counsel for Uber, included a great idea for a minimum wage hike Tusk thought would bring both sides to the table:
 
1. Raise the minimum wage to $15-20 per hour. Min wage
 
2. Figure out the delta to business and give tax credits that directly give back the money to businesses.
 
3, This was Tusk's logic - Citizens get most of every dollar as opposed to inefficient government services, where they might see ten cents on the dollar if they're lucky.
 
4. The theory is that people who need social services won't need them at $20 per hour, so tax credits become the way to force/get both sides to the table.
 
As a moderate, I loved the idea of this solution.  Will it ever happen?  Probably not - The democrats who have pushed for the increase can't deal with the thought of government losing control of increased funding, and the GOP who has traditionally hated the idea can't give up on the free market narrative to look at a solution that makes senses.
 
Small business owners? They'll be stuck in the middle with super high turnover and impossible recruiting challenges.
 
A great idea that will likely never see the light of day.  That's a shame.

Comments

Nadeem

As someone with over 15 years in developing HR Management Software and dealing with both HR Managers and Employees I tend to agree with you that raising minimum wage is a good idea. However, it could have unintended consequences. For example, say a person making $10 / Hr is now making $20 / hr. Well, what about the person who was making $20 / hr and the one who was $30 / hr? I rather employers contribute towards training their good employees so they can move up the scale and use minimum wage jobs as a transition to something better.

AC

I don't think a $15 minimum wage helps the folks it is touted to help. It drives up the cost of goods and services (which hurts the very people that it is supposed to help)and it drives the market to find more economical solutions (that is to say - solutions that don't involve people or if they do involve people, it is people far away from the U.S. willing to work for a lot less). We already have fast food restaurants that have replaced people with electronics. Virtually every grocery store has self-checkout. ATMs have replaced bank tellers - the list goes on and on... Now, these things are going to happen anyway, but this would speed up the process. In my personal view, minimum wage jobs were never meant to be the jobs where someone would support a family. They are jobs for kids in high school, retired folks looking to supplement their income, part time while you have other things going on in your life, etc....
There are lots of great people out there working for minimum wage (I did it myself many years ago), but I have to wonder if they have marketable skills that are worth $15 an hour.
I like the idea of a tax credit - especially since we have the highest corporate tax rate in the world, but I don't trust that it will get used to way it should on the very unlikely chance that it got approved anyway.

Darlene

I agree with AC. This type of increase often creates a domino effect of negative consequences for those the wage increase is supposed to be helping. Here's a pretty good article i saw last month that discusses this http://dailycaller.com/2016/09/11/economists-15-minimum-wage-hurts-low-wage-workers/

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