Maybe, but what's more likely to happen is as the minimum wage increases, it makes automation investments more attractive to businesses. When it's cheaper to buy machines to do the work instead of humans, that's what industry will turn to. After all, most of our manufacturing jobs were not lost overseas,, they were lost to automation.
if they want to use machines they will regardless of a small bump in pay.
What you have to understand is that it's not a small bump in pay.
When your employer give you a dollar an hour raise, it costs him or her much more than that dollar. Your employer has to match your Medicare and SS contributions. A raise increases your contributions (and your employers). Your employers workman's compensation insurance gets more expensive because if you get hurt on the job, it's more money they have to pay you since you make more money. Same with Unemployment insurance. Then there is vacation and holiday pay. That's when your employer pays you and gets nothing in return.
So now you take that and multiply it by X amount of employees, and it's a very large expense for the employer. I won't even get into the healthcare thing or if you have a retirement plan with your employer that he contributes to.
Gee Ray, thanks, for "mansplaining" that for us. Except that you're wrong.
When you give an employee a $1.00 per hour raise, the employer writes
all of the costs of that employee off as a business expense - his/her wages, health care costs, and the employer's contribution to SS, pension, EI and other withholding. The employer doesn't pay income tax on any of these costs.
So the cost to the employer is NOT more than $1.00. In fact, if the employer is paying the full corporate rate of 35% income tax on profit, that raise is only going to cost the employer $0.65 per hour.
So it is completely false to say that a $1 an hour raise costs an employer more than $1 per hour per employee.
No because a write-off is not that much. A write-off only means you don't pay taxes on that money because you used it to run your business.
I have over a hundred write-offs every year, and it helps, but many think a write-off means that the government gives you that money back. Nothing is further from the truth; I wish it was. So an employer may get something back for all is new costs, but again, it's not all that much, especially when you compare that to the expense.
Ray, I'm finding it really hard to believe you own a business at all. Your ignorance is astounding. No one suggested that you get a refund on your deductions. That would be assinine. Companies don't get refunds on expenses, and only someone who doesn't work in business would even suggest this was a possibility.
I worked my entire career in law and banking Ray. I know how it works. You deduct ALL OF YOUR EXPENSES related to your employees from your revenues, and you pay tax on the profit. Every dollar of deductions, reduces your corporate tax payable by 35%.
If you give your employee a $1.00 an hour raise, that $1 comes out of profits, and is not taxable. Had you not given the raise, you would have paid 35 cents of that $1 to the government in taxes, so you would have only kept 65 cents of that $1.00 for yourself anyway. So you reduce your taxes by 35 cents, add your 65 cents to it and give your employee a $1.00 an hour raise.
Hope that notion isn't too complicated for your simple little mind.