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One thing to note is that the weaker the social safety net is the more reason companies have to pay their employees more. If a company can have part-time (or s
by stolio 12y ago
One thing to note is that the weaker the social safety net is the more reason companies have to pay their employees more. If a company can have part-time (or sometimes full-time) employees who also receive food-stamps and Medicaid from the government then they've effectively found a free subsidy. The government is keeping their employees healthy for them.
But if an employee directly depends on a company for their wellbeing and the wellbeing of their family then that company must take responsibility for those things if they want their employees to be happy and healthy long term.
A fix, probably not very efficient, is if a company's employees are receiving X dollars in aid from the government, then the first X dollars of profit go towards paying that back. I think it's good we have social safety nets and they should provide value to business in the form of healthy and able-bodied workers, but companies shouldn't be leeching value in perpetuity from them. If an employee of a company is on food stamps then that company is simply not taking care of them.
It bothers me that we have people who work full-time who still collect benefits because the companies they work for aren't taking care of them. We don't fix their machinery if they refuse to pay for the upkeep, but we do pick up the tab when they refuse to pay for the upkeep of their human capital.
- deciplex 12y ago> One thing to note is that the weaker the social safety net is the more reason companies have to pay their employees more. Reason, perhaps, but not necessarily incentive. Just pointing that out. I like your proposal, but it seems like basic income is simpler.
- spacecowboy_lon 12y agoWhich is why George Osbourn ()conservative chacellor) thinks the minimum wage soudl rise he be paying less in inwork benefits. I think that companies that have a large number of workers reciving inwork benefits should pay higher NI contributions. I dont mind paying for the NHS, but subisdising fast food workers for tax dodging multinationals not so much
- bko 12y agoWouldn't another, simpler fix be to stop providing government aid to those employees? This would stop the government from subsidizing companies that pay low wages. Suppose the market rate for someone is $30k. The employee hired wouldn't particularly care if he gets 20k from the corporation and 10k from government benefits. If you removed the government benefits of 10k, that employee would still need to be compensated 30k to do that job. Therefore, the company would need to pick up that tab. If you claim that the employee is desperate and would work for 20k, then why would the company even bother paying him the 20k in the first place, and instead pay him 10k instead (minimum wage issues aside)? I think the article takes too narrow of a view of what a market wage is. It's not the bare minimum a company has to pay someone. It takes into account other factors such as retention, satisfaction and the talent you attract. As the article states, “increases in wages do, in fact, pay for themselves”. Wouldn't that make it the market rate?