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April 05, 2004

Living Wages: A Good Idea?

Though most conservative and libertarian types are strongly against a living wage and are often against any minimum wage at all, as a conservative myself, I see such views as overly simplistic and idealistic. America today is far from an absolute free market system—the government provides services such as education, health care, housing assistance, and food stamps. Though this may seem like a trivial statement, it often seems to be ignored by the Limbaugh/Hannity/Bush “Right” when the issue is immigration or “cheap” labor in general.

Workers who are paid low wages and few or no benefits generally pay very little in taxes and often use taxpayer-funded services heavily. Businesses (and individuals, such as in the case of nannies) can also draw low-wage workers from other countries who require such services and pay very little in taxes. The lowered wages due to an increased unskilled labor pool also mean that native-born unskilled workers pay less in taxes and are likely to use more in public benefits.

Employers should be required to pay the full cost of hiring unskilled workers, especially because so many employers are so enthusiastic about bringing new “cheap” (subsidized) labor to the U.S. It is harmful and unfair for employers to be able to pay $7 an hour for a worker (for a 50 hour workweek, 50 weeks a year, this works out to a paltry $17,500 a year), while the taxpayers are stuck paying $7,000 or more per year, per kid to educate the employee’s children, and thousands or even tens of thousands more for health care and other benefits. At the least, the minimum wage should be increased, and employers should be required to pay for catastrophic health care benefits (obviously low-wage employees are unable to afford such care on their own—taxpayers end up paying for it). I might even support a low wage tax that would increase with decreasing wages. Such a tax would make up for the taxes low-wage workers do not pay and for the benefits they use.

Some libertarians and those who lean libertarian believe that “any willing employer should be able to hire any willing employee.” The problem with that statement is that there is a third party—the unwilling taxpayer who often must pay for services and benefits for immigrant workers. To me there is nothing "libertarian" (much less sensible) about forcing taxpayers to subsidize employers' cheap labor.

Posted by bb at 07:42 PM