The Obama proposal to increase the minimum wage to $10.10 is
actually a thinly veiled $9 billion tax increase at the expense of employers
and those workers who would qualify for the increase in minimum wages.
If you take a family of four, with both parents having $7.50
per hour (close to minimum wage jobs), their gross income would be $31,200 per
year. However, due to child credits and
earned income credits totaling more than $5,600, their actual net family
income, after deducting their FICA contributions, would be $34,082.20.
Now, if they both had pay raises to $10.10 per hour, their
net family income would be $40,716.78.
This is due to a reduction in Earned Income Credits and an increase in
the amount of their FICA contributions. Out
of a $2.60 increase in pay, the employees would only see $1.59 of that
increase. The remaining $1.01 increase
goes to the Federal Government. The
employers would need to match the increased FICA contributions, meaning that
the total cost per employee would be $5,821.71.
The Bureau of Labor Statistics (BLS), another wasted
Government bureaucracy, indicates that there are 3.6 million minimum wage
earners in the United States. Employers
would need to absorb $20.9 billion in costs, of which the employees would
received $11.9 billion (56.8%) and the Federal Government would receive the
remaining $9.0 billion (43.2%).
Now, let's take a look at the strikes and complaints by the
highly skilled fast food workers, who are told that the instructions for doing
their job is written on the other side of that hamburger cooking on the
grill. They want an increase to $15.00
per hour. Using the same $7.50 starting
point, they want to double their income without doing anything to increase
their skills or increase their contribution to the marketplace. What would they actually get?
First of all, they would completely lose their Earned Income
Credit. Not only that, but they would
actually owe $2,301.00 in Federal Income Tax.
Their FICA contribution would double.
The result is that their net family after tax income would be $55,325.40
per year, a net increase of $10,621.60 per employee. That will equate to keeping $5.11 out of
every $7.50 of increase they received.
The employers, with the additional hourly rate and FICA
contributions that they need to make, would be paying out an additional $60.46
billion. The employees would receive $38.24
billion (63.25%) and the Federal government would receive $22.22 billion
(36.75%) of the money paid out by employers.
What an easy way for the democrats to buy votes using the
money of the employer. Their motto must
be "From each according to his ability; To each according to his
needs." America is unique in that
people do not have a limit on what they can earn. The reality is that people get paid for
bringing value to the market place, not because they simply want to get paid
more than they are currently receiving.
If they want more money, they need to become more valuable to the
marketplace.
As Jim Rohn put it years ago, America is a ladder to
climb. You start on the bottom rung and
climb up the ladder. It is not a bed,
where you lie there hoping someone will give you more money. Climbing the ladder is really pretty
simple. Improve your skills a little,
have a good attitude, and people will notice.
Soon, someone will be calling you saying, "I see how well you
work. We would like for you to come to
our company to work, and we will make it worth your while."
Ask yourself, "How tall will a tree grow?" The answer is, as tall as it can! It will send its roots down as deep as they
can go; send its branches out as far as they can go, and grow as many leaves as
it is capable of growing. They never
stop growing until they die. Wouldn't
that be great if human beings would do that?
Most have the ability to grow; few make the effort.
We have deteriorated to an "entitlement" society
rather than an "earn it" society.
It is no wonder we are losing jobs to foreign countries. Things will not get better until Americans
learn that you cannot "arrive" without first taking the trip.
