Minimum Wage -- Hike, Domestic impact

[6155GUASTELL@xxxxxxxxxxxxxxx]

Regarding the question about the proposed hike in the minimum wage
a couple days ago, the issue (favorable to the proposal) that was
most salient to me was that the functionally minimum wage now is
already $5.00/hr for the low-end jobs. Changing the official minimum
would not have an appreciable impact on the economy *in the very
short term.*

More important, I believe, is the need to hike the minimum now to
prevent a problem in the near future when Congress restructures the
welfare system. The prevailing proposals involve some type of
work fare. In order to qualify for payments, a capable applicant
must be working, and the payments would subsize their income.
Such plans would encourage working among those who don't work
already because of the quirks of the current system, and would cut
the total amount spent by the gov on the welfare payments.

But look what will happen if we don't raise the minimum: More people
will be looking for jobs and will need to take *anything* in order
to qualify for subsidies which would make up the difference between
actual and needed income. Employers, would then be encourage to
LOWER wages at the low end by 50c an hour, and the wage reduction
would probably have a cascading effect to the next wage tier.
[As a point of reference, 67,000 new jobs were created in Wisconsin
last year, mostly in the range between $6-9/hr, according to a news
report last week.]

If the minimum is not hiked, the welfare payments will not subside
individuals, they will be used to subsidize INDUSTRY. This will result
in yet anoter debacle you can file under "How to make the rich richer
and poor poorer at the taxpayer's expense."


--Stephen Guastello