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John F. Kennedy Liberal Democrat

John F. Kennedy Liberal Democrat
Source: U.S. Senator John F. Kennedy in 1960

Tuesday, December 31, 2013

The New Republic: Opinion: Noam Scheiber: Raising the Minimum Wage Isn't Just Good Politics: It's Good Economics


There are both good political as well as economic reasons for raising the minimum wage in America. If it is done right and I’m going to give you an example of why it make sense to raise the minimum wage in America. Raising the minimum wage in America if it is done right makes so much good sense that I can give you two good examples from both a political, but as well as an economic example and give you both of them from the Right even though I’m a Liberal Democrat

The political example would be this. Imagine you are Joe or Mary taxpayer in America and you work very hard for a living just to pay your bills. And raise your kids and you are a little angry about that and feel overtaxed, because here you are playing by the rules and doing everything you can to pay your own way. But you are also paying taxes to pay for people who don’t pay their own way because they are low-skilled.  

And as a result low-skilled workers work low-skilled minimum wage jobs and have to collect public assistance in order to survive. Because these low-wage employers are able to pass their employee costs onto you. And have you make up the difference for these workers housing, groceries and health care. But you raise the minimum wage to ten, twelve dollars and hour with a break especially for small employers and you keep their public assistance benefits where they are now, now these low-skilled workers can pay more for their costs of living. And Joe and Mary Smith and many others won’t have to pay as much in taxes to make up the difference.

The economic example is pretty simple. You want more people working and fewer people collecting Unemployment or Welfare Insurance, than working has to pay more than not working so people are incentivized to work for a living. And not collect public assistance checks for a living instead. You raise the minimum wage to ten or twelve dollars an hour with a thirty percent tax break for employers especially for small employers and you have employers pay their share of the public assistance costs with like a payroll tax. 

And tell employers they can get all that money back if they instead just pay their low-wage employees those costs. Or train them so they can move up in their organization or a combination of both. Now employers won’t be able to pass their employees costs on to the backs of average Joe and Mary taxpayer. And many others and you would be able to cut the middle class tax burden in this country. The politics for Democrats are very good here. 

And this would be a very good way to get Democrats to the polls in 2014 and get organize labor to help them out. It is actually good politics for Republicans as well if they are truly interested in reaching out to the working class. And not just there to carry the water for the wealthy and corporate America. Because they could say they are in favor of this as well so we can cut the taxes for average workers.