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[Update:  Thanks for the rec's and comments.  But I'd really like to know from someone with expertise whether (among its other advantages) raising the minimum wage would make a material difference in extending the solvency of social security.]

The Democrats should make these two issues central to the 2014 campaign:

1.  Raising the Minimum Wage.

2.  Protecting Social Security.

There are many reasons for raising the minimum wage, which provides an annual salary of $15,080 (more than $7,000 less than the poverty rate for a family of four of $22,283).  
Besides the obvious goal of relieving these families from daily economic distress, raising it will decrease the outrageous transfer of wealth from taxpayers to minimum wage corporations such as those in the fast food industry and Walmart.  This is a blatant subsidy to those companies, which we provide in the form of food stamps and Medicaid  -- funds that should be part of employees salaries.

In fact, raising the minimum wage is linked to deficit reduction, by shifting some of these costs from the taxpayers and the government to the minimum wage paying corporations.

But another beneficial effect actually connects a higher minimum wage to preserving social security.

The current social security cap on earnings is $113,730.  Most of us here believe that the preferable ways to provide additional solvency to social security include: (a) raising the cap, (b) raising the cap after a "donut hole" between the current cap and, e.g., $250,000, and/or (c) applying the tax to capital gains income.

The current House of Representations (and the less than 60 vote Dem majority in the Senate) makes any of these politically impossible.

However, raising the minimum wage may be less politically impossible than raising the cap.

Approximately [3,550,000 workers make the minimum wage or below in the US.]  If the minimum wage is raised by $2.00 an hour for, say 3,000,000 people, they will make collectively an additional $12,480,000,000.  Applying the current payroll tax rate of 6.2% results in an additional $773,776,000 contribution per year to the social security trust fund.

I will leave it to the actuaries among us to figure out by how much that additional contribution would extend the current projected date of 2033 for depletion of the trust fund.  

But it doesn't seem insignificant.

With the uncertain fate of health care (at least as a 2014 issue), these two issue are a great opportunity to let people know what we are for and they are against.

Originally posted to Bethesda 1971 on Sun Nov 17, 2013 at 01:24 PM PST.

Also republished by In Support of Labor and Unions and Social Security Defenders.

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