Reply #5: MW is so far away from the cause of poverty... [View All]

[dcfirefighter]

...that it is just plain ineffective for ameliorating it.

The prevailing wage must be higher than the prevailing cost of living, or you have poverty.

Raise wages by increasing the demand for labor - not by arbitrarily increasing the price of labor. Increase the demand for labor by shifting investment away from natural (non-labor built) resource use (oil, water, coal, land, etc.) and on to building labor-made capital (factories, roads, power plants, stores, buildings, etc.). You do this by reducing the taxes on labor-made capital and increasing the taxes on pollution, extraction, and resource occupation. Increase the consumption of labor by reducing taxes on labor, such as the payroll tax and the first $100,000 of income tax on wages & salaries. Eliminating the payroll tax would see an immediate 7% raise in the MW, as well as some portion of the employer's 7%.

Reduce the cost of living by eliminating sales taxes, at least on necessities and labor-produced goods & services. (even a luxury tax on yachts is really a tax on the labor of the blue-collar boatwrights). Reduce the cost of living by reducing or eliminating taxes on buildings where people live and work - the largest single portion of living expenses is housing. Reduce the cost of living by funding public transit through local property taxes. Reduce the cost of living by coming up with some form of universal health care.

The legislated minimum wage can not be raise to an effective level without hurting the poor somewhere. If the minimum wage is high enough to be a living wage in Massachussetts, it will certainly force jobs in Arkansas to be outsourced to Central America or Asia.