Who benefits the most from higher wages?

[presonorek]

Once Rush Limbaugh proclaimed that a person can make any income that they want to make. It only takes 10 year of preparation. If a person wants to make $250,000, start preparing now and that person will be there in 10 years. If a person wants to make less it won't take as long. On June 14, 2010 a specific person that earns $16,302 per year made the goal of obtaining an income of $31,200 by June 14, 2015. This seems to be a realistic goal but is it even a worthwhile goal? If this person's income increases by $14,898 this person's lifestyle doesn't change. Here are the facts conveniently located in this post for easy comparison. The numbers are based upon 2013 federal tax law and 2013 North Carolina tax law. See data below:

Current situation
Salary $16,302.00
Spouse's salary $13,500.00
Social security tax $1,937.13
Medicare tax $432.13
Federal tax $0.00
Additional child tax credit $2,000.00
Earned income credit $3,907.00
North Carolina income tax $830.00
NC Child tax credit $200.00
NC Earned Income Credit $175.82
Total cash received $32,885.62
Food Stamp benefit $1,008.00
Total economic value $33,893.62

Desired situation
Salary $31,200.00
Spouse's salary $13,500.00
Social security tax $2,771.40
Medicare tax $648.15
Federal tax $0.00
Additional child tax credit $307.00
Earned income credit $0.00
North Carolina income tax $1,798.00
NC Child tax credit $200.00
NC Earned Income Credit $0.00
Total cash received $39,989.45
Food Stamp benefit $0.00
Total economic value $39,989.45

Based upon these figures, who benefits the most if this person's income increases to $31,200 per year?

 

[presonorek]

I voted for Option A. The government has more to benefit from high wages. The poor will only be slightly less poor with or without higher wages. The state government also benefits from high wages but not as much. The injured party is the business owners who have been relying on the federal government to subsidize their employees because they didn't have the resources to pay their employees. Some of these businesses would shut down if minimum wage was increased. Some of these businesses will find a way to pay their employees the additional salaries. Those business owners that didn't bum off of the government will be unaffected if minimum wage is increased.

In the above scenario the federal government brings in $1,668.54 in additional Social Security taxes and $432.04 in additional Medicare taxes. Furthermore the government saves $3,907.00 in Earned Income Credit; $1,693.00 in Additional Child Tax Credit and $1,008.00 in Food Stamp Benefits. This is a total savings to the Federal government of $8,708.58.

The North Carolina government rakes in an additional $1,143.82 in income taxes.

The individual brings home an additional $6,095.83 in cash.

The employer has to pay out an additional $16,037.70. The employer is the overall loser in the scenario that I described.

It seems that higher wages could fix our national deficit problem, the state's deficit problems and the deficit experienced in many household. Raising the minimum wage seems like a no-brainer but how do the employers weigh into this discussion?

 

[Wyatt earp]

I voted for Option A. The government has more to benefit from high wages. The poor will only be slightly less poor with or without higher wages. The state government also benefits from high wages but not as much. The injured party is the business owners who have been relying on the federal government to subsidize their employees because they didn't have the resources to pay their employees. Some of these businesses would shut down if minimum wage was increased. Some of these businesses will find a way to pay their employees the additional salaries. Those business owners that didn't bum off of the government will be unaffected if minimum wage is increased.

In the above scenario the federal government brings in $1,668.54 in additional Social Security taxes and $432.04 in additional Medicare taxes. Furthermore the government saves $3,907.00 in Earned Income Credit; $1,693.00 in Additional Child Tax Credit and $1,008.00 in Food Stamp Benefits. This is a total savings to the Federal government of $8,708.58.

The North Carolina government rakes in an additional $1,143.82 in income taxes.

The individual brings home an additional $6,095.83 in cash.

The employer has to pay out an additional $16,037.70. The employer is the overall loser in the scenario that I described.

It seems that higher wages could fix our national deficit problem, the state's deficit problems and the deficit experienced in many household. Raising the minimum wage seems like a no-brainer but how do the employers weigh into this discussion?

Higher wages helps everyone but raising the national minimum wage to combat it is the stupidest thing I ever heard


It don't do anything in the long run, the people making minimum wage will always be poor , do it on a local level not national which they are doing.

 

[regent]

The wealthy benefit from lower wages. even has a name: Utility of Poverty.

 

[presonorek]