To End Poverty: Minimum Wage? Basic Income? Or … ?
|December 14, 2013||Posted by Staff under Editorials|
These two 2013 excerpts are from (1) USA Today, Spt 23, on minimum wage by Michael Saltsman, and TheWeek, Dec 6, on basic income by John Aziz.
The Wrong Way to Reduce Poverty
The last thing the poor need is a well-intentioned policy that sets them further behind. The net impact of a wage hike on poverty is negligible at best, and can often make the poor worse off.
A majority of those living at or below the poverty line can’t benefit from a mandated raise because they don’t have a job.
Overall, the economists found that the “losers” from a higher minimum wage outnumbered the “winners”. On net, a wage hike can actually make the poor worse off.
Between 2003 and 2007, twenty-eight states raised their minimum wage. However, these hikes did not reduce state poverty rates.
Further, those who received a bump in hourly pay and kept their jobs were better off. Yet those who lost hours at work found themselves with less take-home pay. Others even lost their jobs entirely.
A Better Alternative to the Minimum Wage
The vast majority of Americans — 91 percent of Democrats, but also 76 percent of Independents and even 58 percent of Republicans — are in favor of raising the minimum wage.
Minimum wage laws are a price control. They dictate the minimum level that a company can pay a worker. If the minimum wage is $10, and a company wants to take on a new employee that they determine will be worth $8 an hour, they have a choice — either pay $10 an hour, or not hire the employee. Sometimes, the company will accept a hit to their profit margin, and pay the employee $10 an hour. Sometimes they will just not hire a new employee at all. Or, increasingly, sometimes they will go overseas and hire an employee elsewhere — like China — where wages are far lower.
Right now, America has over three jobseekers for every available job. And worker productivity in America has risen, yet the minimum wage has not.
I propose abolishing the minimum wage, and replacing it with a basic income policy.
A basic income is basic. It does not make you rich or successful — it simply ensures a minimum standard, with a minimum of bureaucracy and without setting any price controls. People would still have many personal and financial incentives to work and to become entrepreneurs. If anything, the fact that there is no longer a minimum wage would probably create more employment, not less.
Ed. Notes: With progress, the workweek is supposed to be shrinking, people are not supposed to be addicted to jobs. What else is an economy for, if not to lavish upon us great amounts of leisure?
The second writer proposes taxing the rich. But that accepts great fortunes, no matter how they’re made, and just demands a slice of them … hmm.
If you don’t want the rich to have so much money, don’t give it to them. It’s not theirs anyway. What they’re getting rich off of is common wealth, or society’s surplus, which should be common wealth, a wealth stream we should all share.
The way to turn off the spigot is to redirect all of society’s spending for nature and privilege, all the money we spend for the land and resources we use, and the money we must spend due to some corporation with a government-gratned privilege, like a patent monopoly on drugs, squeezing the consumer. Instead, use taxes, fees, dues, and leases to suck those immense flows into the public treasury. Then have government disburse the lion’s share of those funds back out to the citizenry.
Such spending is plenty of money — the biggest stream in the GDP — and it will only get bigger as technology advances and society prospers. Sharing society’s surplus is sort of like the Alaska oil dividend or Singapore’s land dividend or Aspen Colorado’s housing assistance to all working families. Just as a basic income is a more humane idea than a minimum wage, so is a Citizen’s Dividend a vastly more fair and efficient form of an extra income for everyone. Help it along at Progress.org.