Barack Obama: Time to Give America a Raise


Log from Blammo's picture

So keeping the minimum wage static has effectively given those workers a 20% pay cut? Let's look at that.

FICA: 6.2% shown on the paycheck
FICA: 6.2% not shown on the paycheck
Medicare: 1.45% on the paycheck
Medicare: 1.45% not on the paycheck
FUTA: 6.0% not on the paycheck, capped at $420

The current minimum wage is $8.25, I believe. Eliminating the payroll tax trickery, that means the employer pays the employee $7.62 and the government $1.26 for every hour the employee works, and up to an additional $0.50 an hour for the first 850 hours a year.

Raising the wage to $10.10 makes that $9.33 to the worker and $1.54 to the federals per hour (total $10.87), with up to another $0.61 for the first 690 hours.

Here's an idea. Stop squeezing blood from stones. Eliminating payroll taxes on minimum wage jobs and putting the employer portion into the check ($9.05) would put more money into workers' pockets, and wouldn't cost employers anything more than they already pay.

Raising the wage alone simply destroys the most marginally profitable jobs. Fewer workers are asked to do more at the same pay rate. Productivity rises, and real buying power stagnates. In other words, more of the same, since 1970.

The story you don't hear is that the US taxes the absolute lowest class of workers, those who cannot legally be paid less than they currently do and still have jobs at all, at a rate exceeding 15%. If a hobo found 13 cans of soup in the trash, the federals would demand two of them, then generously give one back as "welfare".

ReverendDraco's picture

I've said it before. . . and I'll quite likely say it again - and again.

I used to work for MW, at jobs that I absolutely *hated* (burger-flipper, dishwasher, car washer). Granted, I was barely able to afford a studio apartment and a cheap motorcycle for transportation (no insurance, though - out of my budget).
I needed a raise, and needed it bad.

Rather than whine and demand that other people use their guns to get me that raise, I learned a more valuable set of skills - used those skills to give myself a raise.

Haven't worked in fast food, haven't washed cars for a living - haven't worked for MW in over 25 years.

And I did it without resorting to violence.

Glock27's picture

ReverendD, I've no idea what your profession is now, but what you have just described sounds like a lot of young people of yesteryear and in this generation. Much of the independence you speak of is exactly the starting point of many of us. I got out of the military (a time of conscription. I did not run like a rabbit as many did, but I don't blame them, I just tried to choose the branch that would keep me out of Viet Nam and succeeded.), married and no real profession, but did engage in alternatives. I too, swept floors, stocked shelves, ran a rod for civil engineers, and etc until I graduated. I got loans for school and got them cleared off my back. I wonder how many young people are doing the very same today as you and I. Your point is well taken, no disagreement.