Right now companies bear the brunt of minimum wage laws. Since the government dictates this the responsibility should rest on the government. A few thoughts:
Minimum wage makes it illegal to hire someone who is not worth the cost of minimum wage. IE let’s say you have some nice retiree willing to answer phones for $5/hr in order to stay active in retirement and make a few extra bucks. Right now it’s illegal to hire that person at that rate, and we are stuck with terrible automated phone trees - because they are cheaper than paying a human minimum wage. Everyone would have benefited the other way. Retiree got to work, Caller got a real person, Employer paid a rate they were ok with that was cheaper than the automated phone tree (after accounting for the negative externality of having to deal with a phone tree).
My suggestion is that instead of the business having to pay the minimum wage the government would make up the difference. In my example above, if the min. wage was $9 then the company would pay $5 and the gov’t would pick up the other $4 per hour.
How to avoid the moral hazards:
A. If you don’t have a job the government doesn’t have to pay a cent. Unlike a minimum income like UBI this does not encourage people to opt out of work. You still have to hold a job in order to get any money.
B. I don’t have an answer yet for the employers that will game the system and hire people at $1/hr - forcing the government to pay $8/hr. The employee won’t actually care what they are paid because they will get $9/hr either way. This gets particularly egregious since now the company could hire 9 people at $1 vs. 1 person at $9. That ends up being $72/hr the government would be picking up the tab on. I would love any suggestions on how to fix this issue. I just found this site and wanted to get an idea in before logging off.
I agree somewhat. Minimum wage laws are horrible for the economy. They hurt entry-level job seekers with no experience. Workers with dead end jobs like it because they know their boss wants to take advantage of them so minimum wage forces them to pay a higher amount. But I think it’s destructive on a macro-scale to the economy, and currently welfare punishes you if you start to earn more, so maybe a form of UBI would be better. One problem I see with UBI is that if it’s distributed to everyone this would worsen inflation.
So @aigles maybe we just do UBI only, BUT you have to be holding a job to get the UBI. You can’t just opt out of the workforce completely and still collect. This fixes the problem because now the employee will not take a $1/hr job if they think they can get a $2/hr job. They will put in the extra work to get the better job. In my example, it didn’t matter if they were being paid $1 or $2 by the employer because either way they would get $9/hr. Under this UBI only method they could earn more than $9/hour.