Friday, August 30, 2013

Minimum Wage vs. Minimum Guaranteed Income

I used to be very much on the side of raising the minimum wage to something "livable", at least $10 and maybe as much as $15/hr ($20k - $30k/year).  I still think we would be better off as a nation (and with many much better off than now) if we doubled it, but I am starting to come around to minimum guaranteed income (this has come up again regarding the civil rights movement, radical socialists that they were).

Minimum guaranteed income does a lot of lifting on a lot of issues--it would have to be set appropriately, but it could be used to eliminate most welfare programs, from cash payments to snap to housing (section 8), and would make useless some of our tax code complexity (we would need to seriously overhaul the tax code to do this anyway).  It also takes a lot of the perceived burden off employers, where we could let the free market reign: if people are willing to work for an extra $2.50/hr, then employers could pay that, but if, as I suspect, people who had more freedom to pick and chose, decided that their time and effort was worth more than it is when they have to take some job, any job, to survive, then employers would be forced by teh markets to pay higher salaries. 

People at the bottom of the income ladder would be far more free, and have greater opportunities.  At the top end: no bitching because they get that money too (well, less, all taxes would need to go up in this scenario).
On top of that, if you look to discussion about the hollowing out of the middle (automation now taking middle class jobs away) as a phenomenon that is likely to continue and expand, then this becomes the best solution.  Technology and enhanced productivity make us wealthier as a society, but the distribution becomes more unequal and the price to pay is that we must transfer some of those benefits down to the people who lost out because of them.  Having a minimum income does just that. 

As for the level...$16k is a fair starting point: it covers bare basics (well, not health care but so long as we're fixing things, we have single payer here) but there is still lots of incentive to work and pull that up.  Probably it would be something along the lines of [GDP/total population/x] where x is some age dependent scaling factor, maybe in the in the 3-5 range for 18+, and 10-20 for under 18 (money to parent/guardian). 

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