Raising the minimum wage is a sneaky method for raising revenue for the State without directly raising taxes on businesses or on the individual. In fact, it is cloaked with an altruist sense of “righteousness” which makes it hard to see the sinister side of this action.
State Unemployment taxes (SUTA) and Federal Unemployment taxes (FUTA) both benefit from the ever increasing minimum wage creep because business are taxed on a percent of employee earnings. A sudden move to $10.00 – $15.00 dollars an hour would fill government coffers, making it a lazy-man’s approach to balancing the budget.
Furthermore, a company like ours which also has a State Business & Occupational tax (B&O) gets taxed on our revenue; for us the revenue includes the wages that we must pay our employees. In this case, raising the minimum wage to $10.00 – $15.00/hour means a greater percentage going to the State and Federal Government with no added benefit to our business or to our clients.
Sure, ok, I understand that the employee will see the benefit in a higher hourly rate, and I get the theory that they will have more money to spend which will drive the economic engine. But I also want to remind everyone that there are two sides to an hourly worker income. There must be a wage AND there must be hours to make the equation work. 20 hours at $15.00 per hour is only $200.00. But 40 hours at $9.32 is $372.80. Seems to me that if employees actually showed up to work on time, work the whole day, every day of the week, year after year that we might be able to get to the same place as taking the lazy man’s way out of this problem.
Arbitrarily raising the minimum wage has appeal to those that don’t want to work hard. That includes our Federal, State, and Local governments. Fix the problem, don’t shift the burden.