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The solution isn't to pay them to stay home. That's just bad governance, stupid fiscally and economically for a nation. The exceptionally obvious solution is a

The solution isn't to pay them to stay home. That's just bad governance, stupid fiscally and economically for a nation. The exceptionally obvious solution is an income credit that artificially increases their wages beyond what the market is paying for their low skill labor. If the Democrats knew what they were doing they would have taken care of this decades ago instead of constantly fighting for higher minimum wage adjustments. Their lack of understanding of economics and business is astounding and terrifying. You can set the minimum wage at $5 while setting an income credit instead. The minimum wage cuts off unskilled labor at the knees; if your labor is only worth $5/hr and the minimum wage is $15, you're screwed big time. You're frozen out of the labor market. It cultivates a permanent underclass stuck on welfare in a poverty cycle. If you leave the minimum wage low and increase an income credit, you don't suffer the problem of labor being excluded from the market. Someone that has labor worth $5/hr in the market, can then earn $15 thanks to the credit that fills in their wage. This is how you fill out the labor force while simultaneously boosting wages. The minimum wage is a regressive approach - it harms the lowest value labor the most - as is paying people to stay home. The dumbest thing a nation can do is pay people to stay home. There are always superior alternatives to that approach.

nerdponx 5y ago
I haven't seen much strong evidence suggesting that a $15 minimum wage is actually freezing people out of the labor market. Not to mention, people work under the table all the time. That said, the wage credit idea isn't bad either. The problem is that now the government is just subsidizing companies that pay low wages with no way to recoup even part of the subsidy. You're basically opening a firehose of welfare from consumers to employers.
lumost 5y ago
If someone started at a $5/hr job and was able to average a 10% per year income gain thanks to tireless effort and increasing skills they would eventually reach the income of $12/hr after 10 years. During this decade of tireless effort they would have seen no take income increase and their employer would have been giving them raises just to reduce the government benefit they receive. It's hit or miss as to whether a $15/hr job puts people on a good long-term footing in their career. Putting a person in a $5/hr job that the government tops up will likely just create lifetime wage subsidies as we see today via food stamps/welfare etc.

nerdponx 5y ago

I haven't seen much strong evidence suggesting that a $15 minimum wage is actually freezing people out of the labor market. Not to mention, people work under the table all the time. That said, the wage credit idea isn't bad either. The problem is that now the government is just subsidizing companies that pay low wages with no way to recoup even part of the subsidy. You're basically opening a firehose of welfare from consumers to employers.

lumost 5y ago

If someone started at a $5/hr job and was able to average a 10% per year income gain thanks to tireless effort and increasing skills they would eventually reach the income of $12/hr after 10 years. During this decade of tireless effort they would have seen no take income increase and their employer would have been giving them raises just to reduce the government benefit they receive. It's hit or miss as to whether a $15/hr job puts people on a good long-term footing in their career. Putting a person in a $5/hr job that the government tops up will likely just create lifetime wage subsidies as we see today via food stamps/welfare etc.