Realities of economics and minimum wage.

The minimum wage in the United States is $7.25 an hour. as of 2007 it was $5.15 an hour. In 1990 it was $3.35 an hour.

Visually it looks like our minimum wage has been growing drastically in the last quarter century, but this does not account for inflation.

The highest actual value for minimum wage we have ever had was in 1968 at $1.60 per hour ($10.64 in modern currency).

But look more into what is required of employees in the past as opposed to now. In the beginning of the minimum wage laws it was the wage for completely untrained labor. Trained laborers made more. But comparatively, Most if not ALL modern employees would be considered trained labor. A POS computer is a complicated program, far more complicated than a simple manual cash register. All employees are expected to be literate, have customer service skills, be computer savvy, able to do manual labor. A very long laundry list of different skills that are common now, but are far outside the scope of the initial minimum wage laws. So the employees have become more skilled and more productive, but their pay has not gone up to match. Instead all of that profit has gone to the owners of the companies and the CEO's.

So we now have a vast skilled labor force, many of whom have higher degrees, still stuck working at poverty level employment.

This is simply not a viable way for a society to exist. The complexity of modern life has grown vastly, and the average worker is expected to do more and make less for their efforts.

But there is a threshold, we can't simply pay all employees a maximum amount for their labors, otherwise there would be no incentive to work towards more difficult careers. Why be a doctor when you make the same amount of money as a retail clerk?

But the employees need to be paid what they are worth.

Now some economists claim that raising the minimum wage will increase unemployment, that's simply not the case anymore. Everyone remembers the excessive amounts of downsizing and merging that happened in the last few decades. Any two jobs that could be done by one person have already been merged.

Most jobs simply cannot be downsized any further and remain in business. If anything, some corporations might attempt to close multiple locations to drive all the business into fewer stores. This is kindof a wash because the compressed consumers will require more employees at the fewer locations, plus it increases the risk of brand disloyalty for the sake of convenience.


So that argument is rather moot. There will be minor downsizing as the corporations attempt to wring out every last bit from their worker pool, but there is only so much they can do.

But let's use an example of a drastic increase in the minimum wage, increasing from $7.25 an hour to $22 an hour.

A full-time employee at the current rate with no sick days or holidays makes $15,080 a year before taxes.
That means that they are taxed at a rate of 15% for $2,262 in income tax

If the wages are increased to $22 a year with no sick days or holidays full-time the same employee would make $45,760 a year. They would jump up a tax bracket to 25% and would pay $11,440 in taxes.

Take-home for the employee at current wages= $12,818
Take-home for the employee at increased wages= $34,320
(both excluding state, local, social security, etc)

So the employee, for the same amount of work is now taking home almost three times what they were before and the government is collecting five times as much in taxes. Furthermore, because of their increased pay, they no longer need additional government support, fewer people on food stamps and other social services while fully employed.

So the government is collecting more money in taxes, the employees are collecting more money in wages, the only people currently losing out are employers. But there is a solution there too. Increase government subsidies to all employers.

So after the subsidies, the government is taking in slightly more money, the employees are making significantly more money, and the employers are making slightly less money.

Hell, for further motivation, make the subsidies system based on the percentage of employees that are Americans. That would actually drastically help smaller businesses. They don't out-source overseas so they would be rewarded significantly.

Thus increasing the demand for American laborers for the bigger companies to increase their employment subsidy percentage.

This isn't hard, we just need to wrestle control of the government away from the big corporations so we can fix all of this.