Minimum Wage Incrases A New TAX? : $5700+ (Fees & Benefits)

Government interference in the free market is a losing proposition, it always has been and always will be. Just imagine what a hike to $15/hour would do to employment? Sadly, many have no idea how this will play out even in the short run, worse many more that do understand will be caught up in the rush for the 'easy money' with no recourse but to be laid off with  most everyone else.

It becomes evident that what the progressive socialist are proposing for the minimum wage earners is strictly a short run political stunt that will not benefit the majority of workers. What is seen as a winner for workers is nothing more then political strategy. That thousands will lose their jobs is of no importance.

Why would anyone actually vote for a democrat of their own free will?

The Wage Hike Is Really a $5,700 Tax
Source: Mark J. Perry, "Instead of $10.10 per hour, think of the proposed minimum wage as a $5,700 annual tax per full-time unskilled worker," American Enterprise Institute, September 4, 2014.

September 10, 2014

The proposal to raise the minimum wage from $7.25 to $10.10 per hour will hurt hiring and dampen employment prospects for many workers.

According to Mark J. Perry, scholar at the American Enterprise Institute, a more apt description for the wage hike is a $5,700 tax per full-time unskilled worker:

• If businesses are forced to pay an additional $2.85 per hour for all unskilled laborers, that amounts to what Perry calls an "unskilled labor tax" of $114 per week, adding up to $5,700 annually for each minimum wage worker that is employed by a business.
• Moreover, the figure is actually higher, because employers must contribute 6.2 percent to FICA, 1.45 percent to Medicare and 0.6 percent to the federal unemployment tax.
• With those payroll taxes, the wage hike would actually cost employers $6,170 per worker.

Businesses will not simply absorb these costs; they will look for ways to minimize the $6,000 tax by reducing the number of workers they employ, cutting workers' hours, halting additional hiring or finding ways to use automation to replace work done by employees.

Employers may also cut employees' non-monetary fringe benefits rather than eliminate their positions, something that NCPA Senior Fellow Richard McKenzie described in a recent study showing how minimum wage hikes hurt workers by cutting back on non-monetary, yet valuable, fringe benefits.