Sunday, March 3, 2013
They are talking about raising the minimum wage to $9 an hour.
I mentioned that to a shipmate and the first thing that came out of his mouth is that it was just a sneaky way of putting the minimum wage earners into a higher tax bracket. Makes sense to me.
Every time the government decides to raise minimum wage prices go up. If you can get 5 cans of beans for an hour's pay at minimum wage then you can bet that it won't be long before the same 5 cans of beans will cost $9.
It always happens that way.
Of course, the people that are working in skilled labor and are making considerably more than minumum wage tend to get a pay cut because the raise at the bottom of the pile closes the gap a little more.
Actually, in my neck of the woods I seldom see anyone but a few teenagers at fast food joints making minimum wage. Most people do considerably better than that.
Of course there are the unthinking compassionate out there that think 'Those poor people making minimum wage deserve a raise! This is a good thing!" fail to realize that there really is no raise for them or if there is, it will be very short lived as prices will go up accordingly.
After things adjust the minimum wage earner will likely be no better off that he was before they raise the wage.
What this raise comes down to is that it is a bunch of hoople that will do nothing but add to inflation and take money away from all of us.
A lot of us that are getting along in years have been saving for retirement and look at things figuring we will have enough to get by on in our final years.
(Calling them 'the Golden Years' is a crock.)
Inflation robs us of our buying power and in effect takes money away from us that have retired. For every percentage point of inflation our savings drop in value a corresponding amount in buying power.
For example, if you have $100,000 in a retirement fund and inflation is 20% over 5 years, at the end of 5 years you still have the $100,000 but it only has the purchasing power of $80,000. Your savings have shrunk.
Sometimes it makes you wonder why you bothered to save.
Of course, like my shipmate said, raising the minumum wage is likely a sneaky way of putting the people at the bottom of the pile into another tax bracket.
I'm not so sure that that is totally a bad thing, though because right now the people at the bottom of the pile pay no taxes and therefore have no real skin in the game.
I've always believed that not only should the guys at the top pay their fair share, but those at the bottom ought to pay at least something so as to be legitimate participants in the process.
Right now we have about 47% of us that are not paying into the system. That means that the remaining 53% are supporting them.
With $16 trillion in debt I have no problem continuing to pay my taxes at the current rate but in order to keep up with governmental spending they would have to double my taxes.
I get a new pickup about every ten years, a basic 4 cylinder model with a manual transmission. Yet every year I wind up buying the government the equivilent of a better truck than I drive.
For a working stiff to buy the government a new vehicle every year sounds pretty hefty to me. Two per year is insane. There is no reason anyone should be paying 2/3s of their income in taxes, especially when 47% or the people in the country pay nothing.
I suppose that if the raise proposed by congress puts more people in the bracket where they are paying taxes that is a good thing but it isn't likely.
What is likely is that they will raise the amount you can make tax-free. This leaves us back at Square One.
Still, what raising the minimum wage is going to do is simply add to inflation. You'd think that the guys in Washington would have learned from the inflation of the Carter years.
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