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Raising minimum wage makes economic sense

Letter-to-the-Editor-698x408

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Editor, Index-Tribune:

Regarding the Feb. 4 editorial (“True cost of labor”), interesting points were made about fast food industries “privatizing the benefits of their workers and socializing the costs.”

Raising the minimum wage to $12 an hour would benefit us greatly from an economic point of view. ?A recent University of Kansas study found that if you doubled the salaries of McDonald’s employees, from minimum wage workers to their CEO, it would raise the price of a Big Mac by 68 cents, and Dollar Menu items would go up by 17 cents. When you put that extra money in the pockets of low-wage workers, they don’t squirrel it away in offshore tax free havens; they spend it, and they spend it here. Money spent locally benefits local business. More local business, more local hired workers and so on. Raising the minimum wage makes economic sense.

Tom Sokolowski

Boyes Hot Springs

  • wayne

    Tom…If $12 is good then why not $14…or $20…or maybe just paying McDonalds workers
    $80K per year??? After all, isn’t more better?? Market forces dictate what employers
    can pay workers. Their is a point where paying people more willm not benefit the employer
    and economic healing. Maybe when this economy improves more we can talk about
    raising the rate to $12 on the national level. Right now…I don’t think so.

  • Phineas Worthington

    Record youth unemployment. Record minority unemployment. These are the achievements of this misguided idea of a coercive minimum wage that limits opportunities for low skilled entry level workers. You’re just going to make a bad macro job situation worse than it already is.

    The better alternative is to allow pro growth policies to be put into place to create more jobs than are needed so that the market will require higher wages for entry level workers.

    • Chris Scott

      Phineas;
      2/26/2014
      I thought you would be interested in this The Republican House Ways & Means Committee Chairman, Rep. Dave Camp, (R-Mich), has released his proposed overhall and simplification of the tax code. I cannot post the actual link, so here’s the article title from today’s Forbes’ website, “Camp Tax Plan Hits Homeowners, Real Estate Industry Hard.”

      It’s the first article I read on Camp’s plan. I’ve been waiting and watching for details. The House Ways and Means is where any Tax Code changes have to begin.

      Living in CA, the provisions in the Forbes’ article are not very good news. what do you think?

      • Phineas Worthington

        Thanks. I’ll check it out. It is a real shortcoming of the disqus platform that we cannot hot link anything. I always appreciate finding our common ground on issues. I suspect the proposal is doing away with the home mortgage deduction by your description. In the short term that will hurt, but in the longer term it will be a good thing to equalize the rates of renters v owners.

  • Phineas Worthington

    Couldn’t we achieve the same effect of raising minimum wages by just not taxing income below a certain threshold?

    • Chris Scott

      Today a single person earning min wage of $7.25/hr working full time 40hr/wk does not make enough to owe any federal income tax. For a family of 4 their federal income tax threshold is much higher and their economic situation is far worse if both(2) parents work min wage full time and it has to provide food, shelter, clothing , etc., for 4. it’s clear why minimum wage earners often have to work two, even three for a family, in order to survive.

      You’re proposing increasing the minimum amount they would have to make in order to qualify for owing federal income taxes while they already don’t make enough to pay federal income tax while they continue to make the same $7.25/hr working full time 40hr/wk.

      How would minimum wage workers be better off?

      • Phineas Worthington

        Lets be clear, the minimum wage is not about helping the poor, it is a political payoff to unions who get higher wages from collective bargaining agreements because they’re tied to minimum wage rates.