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View Diary: Obama gets behind $10.10 minimum wage bill (115 comments)

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  •  Living wage (7+ / 0-)

    To be appropriate, the minimum should be a living wage, not a random figure based on an out of date assessment of the basis needs simply occasionally raised by another arbitrary percentage.

    The UK has a National Minimum Wage but in many parts of the country this is not enough to provide for the basic needs of a family. Fortunately there are social security benefits that help however in recognition of the particularly expensive costs in London, most politicians and the unions are pressing for a London Living Wage. Unfortunately this is not mandatory and one side-effect of this is considerable cost to the Treasury:

    Treasury coffers would get a £608 million boost if all London’s lowest earners were paid the “living wage”, it was claimed today.

    Research found the cash would come from extra tax income and saved benefits if the capital’s 572,000 low-paid workers received the wage.

    If workers across the UK were paid the £8.55-an-hour rate the Treasury would rake in an extra £3.2 billion every year, the study found.

    Having commissioned the research, the TUC today argued the living wage would help hard-up families who are now struggling to make ends meet.

    There are other city areas with Living Wage calculations. Although the push is from the TUC, there are local authorities run by Labour which do not pay Living Wages and, perversely, Conservative run ones that do. Also, it would take a further reduction in the £10,000 personal allowance to take even those on the national minimum out of income tax. (This is up from £6475 in 2010/11 as a result of the Liberal Democrats' last manifesto. The policy for the next election is to raise it to the minimum wage level which currently is about £12,800 per annum)

    To put those figures in context, the reduction in income tax means the lower paid (the starting point of a higher rate of income tax was not changed) pay around $100 less income tax a month. £600 million is roughly the amount set aside recently to give all 4-7 year old schoolchildren a free hot lunch. The extra tax/lower benefits from everyone getting the London Living Wage would all primary school children (to age 10+) to have such a free meal.

    So raising the minimum wage in the USA would appear to have far wider economic benefits than simply allowing American families to just about survive.

    We will work, we will play, we will laugh, we will live. We will not waste one moment, nor sacrifice one bit of our freedom, because of fear.

    by Lib Dem FoP on Fri Nov 08, 2013 at 07:05:28 AM PST

    •  This is the way "living wage" is defined (0+ / 0-)

      in the United States.  It doesn't provide a concrete formula for arriving at the amount:

      A living wage is a wage which is based upon the cost of living in an area, rather than an arbitrary minimum. Under an ideal living wage, someone who works an ordinary 40 hour per week job would be able to afford shelter, food, health care, and other basic necessities of life. The amount of a living wage could potentially vary quite a bit, as standards of living are different in different parts of the [country], and the overall cost of living is also subject to extreme fluctuation.

      "In this world of sin and sorrow there is always something to be thankful for; as for me, I rejoice that I am not a Republican." - H. L. Mencken

      by SueDe on Fri Nov 08, 2013 at 08:25:54 AM PST

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    •  Tax Losses from Paying Living Wage (0+ / 0-)

      I think the national minimum wage law should require paying an amount actually sufficient to cover the cost of a person and a child wherever they actually live.

      But I note the increased tax collections from raising the minimum wage to such a living wage, and I wonder that exact same income will be deducted from corporate taxable income as an extra expense. Corporate tax rates are lower (and evasion is higher), so just moving the income from corporate effective tax rates to labor tax rates would increase collections. But how much, actually, if not the large amount as reported in that London example?

      "When the going gets weird, the weird turn pro." - HST

      by DocGonzo on Fri Nov 08, 2013 at 09:56:57 AM PST

      [ Parent ]

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