Minimum Wage Increase Is Really a Tax Increase

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.

The Rear View Mirror

The case of Trayvon Martin and George Zimmerman was, and continues to be, a tragedy for all concerned, including the entire country. Those who have a pedestal that the media will follow, Jesse Jackson and Al Sharpton, for example, used the incident to incite a racial divide. Why do they do this without having full knowledge of what actually transpired.

The simple truth is that it is for their own benefit, not for Martin’s family or to help improve the plight of blacks in America.

Today, Leonard Pitts, Jr., a “News” columnist for the Miami Herald, discussed the stereotype of blacks. He made a comment that black students, who guess that 75% of whites who are murdered are at the hands of black offenders, are surprised that the actual number is only 13%. Of course, it is easy to manipulate numbers to make your article look good, so let’s take a look at the real numbers.

• Blacks were disproportionately represented as both homicide victims and offenders. The victimization rate for blacks (27.8 per 100,000) was 6 times higher than the rate for whites (4.5 per 100,000). The offending rate for blacks (34.4 per 100,000) was almost 8 times higher than the rate for whites (4.5 per 100,000).
• What is the percentage of blacks killed at the hands of white offenders? The answer is only about 5%.
• 93% of black victims were killed by blacks.

I do not know what happened in the Martin-Zimmerman matter, any more than Jackson, Sharpton or Pitts knows. In a previous opinion, Pitts made the statement “No justice – no peace!” relating issues to the Los Angeles riots after the Rodney King verdict. While I certainly did not agree with that verdict (I lived there at the time), I could not condone the violence that took place, which hurt many black business owners.

The issue is not that man in the mirror that Pitts mentions, and instead should be a matter of the rear view mirror. They make rear view mirrors in a car smaller than the windshield because it is more important to look ahead than behind. It would appear that black leaders do not agree with that, because they continue to point to the past and what has been done, instead of working within the black communities to point to the future.

Human beings will rise to the level of expectations that are set for them, especially children. Instead of raising the bar and expecting more from black communities, these “leaders” make every effort to keep those communities impoverished and dependent on government, as if it is owed to them for the “400 years of injustice,” which I had no part of and most blacks did not experience. The biggest obstacles in the black communities today are other members of the black community.

I do not care if someone is white, black, brown, yellow, red or plaid! If they make an effort, they are worthy of everyone’s support. If they are not willing to make an effort, then they are destined to remain bogged down in the swamp of sadness.

Work on making progress, rather than excuses.