Op-Ed By David Bolotsky
The Hill, Dec 16, 2013
What if we could create a program that would strengthen our tax base, make government spending more fiscally responsible and provide a powerful financial incentive to low-income workers? It sounds too good to be true.
But it already exists and dates back to 1938 – the minimum wage.
When wages are too low for even full-time workers to buy basic necessities, workers turn to taxpayer-funded programs like food stamps and Medicaid. A surprising beneficiary is the low-wage employer who is being subsidized by taxpayers.
It’s a perverse incentive program. A corner business or giant retailer like Costco that pays a starting wage of $11.50 an hour gets no government subsidy while a store across the street paying the federal minimum wage of $7.25 is actually getting a government handout because it pays a substandard wage. This does not make economic sense.
Unfortunately, the minimum wage has been eroding for decades. The minimum wage under Republican President Dwight D. Eisenhower in 1956 was actually 18 percent higher than it is today, adjusted for inflation. We can’t progress as a nation this way.
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Bolotsky is founder and CEO of UncommonGoods, an online and catalog retail business based in Brooklyn, NY. He is a member of Business for a Fair Minimum Wage.
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