A Common-Sense Solution to the Minimum Wage Conundrum

Over the last decade or so there’s been much debate about whether or not we should raise the federal or state-level minimum wage. Our current minimum wage as it stands right now is about $7.25/hour, a wage both conservatives and liberals agree is absolutely abysmal and is just barely enough to eat, let alone live a comfortable stable life. As a result, many people and single-parents end up having to work 2-3 jobs and can’t properly take care of their kids which deprives those kids of a vitally-important family factor in their growth and development. But neither Democrats or Republicans seem to agree on how to tackle the problem. Liberals argue that if the minimum-wage had kept up with the rate of inflation from the early 1970’s, it would be well over $20/hour and even more if you take into account the increase in productivity levels in the ensuing almost 50 years. However, many conservatives who although agree that the current minimum wage is atrocious they believe that increasing the minimum wage would lead to job losses, increased foreign outsourcing of jobs, and would overwhelm small businesses trying to keep up with the costs so many Republicans believe that the wage issue should either be dealt on a state-by-state basis or some even more ideological free-market libertarians believe the minimum wage should be abolished altogether to encourage small-business growth. Ultimately, there are valid truths to both sides of the argument but neither side in my opinion is offering a positive, practical solution to solving the issue.

Liberals want to raise the federal minimum wage to $15 which is not a bad idea however they want to do so while still keeping incredibly high tax rates on both businesses and income taxes in addition to crippling regulations. Republicans are right that doing it this way would lead to increased expenses for businesses and more companies would move to other countries for cheaper labor costs not to mention the increased rate of inflation and government debt. However, traditional Republicans do not offer a much better alternative when they advocate for simply “cutting taxes” and giving tax breaks to corporations to spur investment because for one, the facts show that simply giving the tired cliche of “tax breaks” has a very limited and superficial effect on job creation and economic growth partially because the tariffs and barriers to doing foreign trade are still absurdly high (which is undoubtedly the key issue of President Trump’s trade negotiations with our partners in Europe and Asia) and in addition to that, when big corporations are rewarded with lower taxes with little accountability and transparency, they often prioritize too much on stock buybacks, restructuring, and giving benefits to their existing higher-level employees before they concentrate on economic development in the community or creating new jobs. So, we’re stuck at an impasse where liberals and conservatives alike can’t seem to agree on a way to solve this issue. Well, I’ve thought up of what I strongly believe is a positive pro-business and pro-worker solution in traditionally higher-taxed states like New York and California to the minimum wage debate.

California, despite it’s marvelous economic and industrial might, has some of the highest tax rates and overreaching regulations in the country in addition to being rated as one of the worst states to start a small business leading many people to flee to low/no-state tax states like Texas and Florida. So what can we do in California you may be wondering? Well first, we need to reduce costs and increase the attractiveness of doing business by eliminating the state income tax so people will have more disposable income to buy things and secondly we need to simplify and cut the state corporate tax rate by at least 50%, something which Gov Arnold Schwarzenegger had proposed back in 2009. Having a minimal tax burden to compete with states like Florida and Texas will greatly incentivizes big corporations and small businesses alike to come to California and invest in communities and job creation. The next drastic thing that must be done is that we have to aggressively roll back crippling government regulations. Now of course many liberals will whine that deregulation gives big business too much power and lessen the checks and balances on big corporations but what they don’t realize is that the reality is actually the other way around! Big corporations and big money special interest groups often lobby the government to enforce regulations that give them an advantage while making it harder for smaller businesses to thrive and prosper. So deregulation is actually weakening the power of the big corporations influence on the government and is pro-Small business. And thirdly, once you eliminate the tax and regulatory burdens, the government of California should then raise the minimum wage to $20/hour and not just $15 and peg it to the rate of inflation so we can finally clear this issue off the table and also incentivize people to come to California because they will be encouraged by the lucratively solid minimum wage of $20/hour coupled with no state income taxes. And if need be, small businesses under let’s say 50 employees or so can be exempt from the minimum wage so they won’t be burdened by costs but we can offer small businesses a tax incentive to pay workers the $20/hour minimum wage.

In short- BINGO- the answer to the minimum wage issue is to eliminate state income taxes/cut the corporate tax rate in half, drastically roll back corporatist regulations, and finally raise the minimum wage to not the Democrat proposal of $15 but have it be at $20/hour pegged to the rate of inflation!

Low taxes and $20 min wage is the way to go in my opinion! Let me know what you think and comment below.