
Originally Posted by
Ixion
The problem with this is that the minimum wage is a very artificial construct, and does not really work.
In a market economy (I don't approve of it, but it's what we are stuck with. For the moment. ), the "minimum" wage should be set by demand for labour. There would still need to be a government set minimum , to cover special cases like workers in training, sheltered workshops etc. But the *effective* minimum, the figure that an employer could offer and have any hope of getting staff is set by supply and demand.
If a government mandated minimum is greater than this market figure, eventually the system flies apart.And , one way or another, the real minimum comes in much closer to the market figure than to the government one.
And, in NZ, the market minimum is much less that the government mandate .
And yet, even the government minimum is nowhere near sufficient for a worker to provide for a family on.
Why ?
A number of reasons. All mostly traceable to government interference, and incompetant interference at that.
Firstly, the government buyin to a low wage economy, competing with Fiji, Vietnam, China, Phillipinnes, instead of Europe.
And comcomitant total failure of the education system, which makes not even a pretence of preparing the majority of young people for a productive life.
And gross overtaxation, mainly to fund a rampant social welfare system totally out of control.
To pay for all the benefits, taxes must be high . Obviously, it is workers who must pay the bulk of them. But since wages are low, workers are left with insufficent money after tax ,even with both adults in the family working, to survive on. So, instead of reducing taxes, the government tries to bolster things up with more welfare handouts, to the workers. Thus requiring higher taxes again. So the worker is yet more heavily taxed ,in some cases (and only some) getting back a small portion of the extra tax he has paid.
In most countries (and certainly in NZ when I was young) workers earning minimum wages paid no tax . Here, they pay 20%. And in reality the tax take is far higher than that figure indicates, since NZ , once again , unlike most countries, and the NZ of my youth, provides no personal or spousal allowance to offset the tax demand.
Because , the key is IT IS NOT CORPORATIONS THAT GENERATE EMPLOYMENT in a successful economy. It is the small trader, the self employed tradesman.The entrapreneur
In successful economies, it is easy for a worker to set up in business for himself. At first, there is only him. But, if he works hard, after a bit, he can take someone on (a partner) to help him. Now there are two jobs. And thus it grows.
Bookmarks