Reply #7: What I'm suggesting would do precisely what you want...

[Jeff In Milwaukee]

People who say "We can't afford a Living Wage" don't understand that we're already paying one -- it's just that the wage is being paid partly by employers and partly by taxpayers. When you factor in EIC, Food Stamps, Housing Assistance, Childcare Assistance, Transporation Assistance, School Hot Lunch Programs, CHIP, Medicaid, Home Fuel Assistance, and a host of other programs available at the state and local level, a minimum wage employee can "earn" up to $15,000 in government benefits each year. That's the equivalent of $7.50 an hour.

Rather than employ an army of federal, state and local bureaucrats to administer all these programs and then enforce the regulations (these programs are rife with fraud), why not just have employers pay a minimum of $12.50 an hour? That would be about $25,000 per year for a fulltime employee. At $25,000 per year, a single taxpayer with two children would still have no tax liability and would have a refundable credit of $2,000 (Child Tax Credit x 2 kids). That's $27,000 in family income and a better deal than what they're getting now.

How to pay for it? Most of the evidence says that employers pay for most of the cost through increased efficiency -- higher wages lead to lower turnover and lower costs for recruitment and training. What's more, the longer employees stay at the same job, but more proficient they become. But certainly the costs could be offset in party by taking the funding for the old assistance programs and turning them into payroll tax reductions -- both for employers and employees -- to blunt any inflationary effect that the Living Wage might have. Note, however, that most research on existing Living Wage ordinances shows a very minor negative impact on the economy.

I suspect I'm preaching to the choir on the basic issue, but when we're selling a Living Wage to the moderate-to-conservative crowd, the prospect of dismantling a large chunk of the bureaucracy is a powerful selling point. Telling them "the private sector can redistribute wealth much more efficiently than government programs" is something that will resonate with them.