One of the issues that seem overlooked in the minimum-wage debate is the impact it has on the taxpayer. An unintended side effect of social programs in the U.S. is that they facilitate low-wage jobs. If the minimum wage is significantly less than a living wage, how do full-time employees and their dependents survive on minimum wage? Often it’s through our social safety net. The difference between minimum wage and a living wage is bridged by government-sponsored programs such as food stamps, low-cost housing, Medicaid, etc. As taxpayers we know who pays for those programs.
Who then benefits from them? Obviously the low-wage employees and their dependents benefit, they have a roof over their heads and food on the table. But ultimately their employers also benefit. The employer is able to receive the complete benefit of a full-time employee without actually paying the full cost of maintaining the resource. The difference comes out of the taxpayer’s pocket and goes into the employer’s bottom line. Employers’ profits are in essence being indirectly subsidized by the taxpayer.
Little wonder Wall Street hates the thought of raising the minimum wage.
Orvid Zollinger
Vancouver
