BF2S Forums Why don't we just set the Minimum Wage to $10/hour?

jonsimon wrote:

Pug wrote:

jonsimon wrote:

No, they pay taxes. Employers that require SS are reporting the workers, and then must withold payroll and income taxes from their pay. How is reporting the worker's income costing the business money if the taxes are taken from the workers pay? Besides, you assume everyone is immoral and experiences no negative utility from breaking the law, something easily proven to be false.

Dude, pay attention.

You are talking about those who at working on a green card or have applied for citizenship.  These people are NOT illegal aliens.  Green carders pay tax via withholding, they are in the process of becoming naturalized citizens.  Green cards are hard to get for laborers...they are only issued to those who have a skill needed or a local sponsor.  So, those who come in illegally cannot apply for citizenship, because they'll be deported.

No, I'm talking about illegal immigrants. Don't put words in my mouth.

Pug wrote:

Illegal aliens are undocumented, and the employer doesn't report their services as payroll expense because: 1) they would be required to pay them minimum wage or improve the working conditions to OSHA standards, 2) they would have to pay the company match on the payroll tax, 3) they would attract the INS, the IRS and receive a fine for breaking the law, 4) they lose the workforce to deportation.

1) Required by law, but who is going to force them to? Who has to find out? All firms are required to require SS, so unless we're talking about construction daylaborers, the firms are going to report the taxes, and as long as the IRS is happy, the only beuracracy they have to worry about is the INS. Who's limited number of agents perform physical raids and only check for citizenship, not to see if you're paying minimum wage.

2)Who will keep them from taking their end of the payroll tax out of the worker's wage? It's not like the illegal immigrant can complain to the INS and the IRS won't care as long as the taxes reported line up with sales.

3)The IRS doesn't investigate anything except the numbers. As long as tax reports match up with sales, they don't care who is employed. And the INS only does physical raids to check for citizenship, provide fraudulent proof of citizenship and they won't bug you.

4)The firms don't lose any workforce, because the government likes the tax dollars.

Pug wrote:

And, secondly, you don't know how payroll tax works...but then again most people don't.  There are two components of payroll tax - the employee's portion and the employer's MATCH. 

Here's how it works:
You're salary is $2,000.  You get a check for $2,000 - $153 = $1,847.  The company is also required to pay the match, which is $153.  So, the company's payroll expenses are $2,000 + $153 = $2,153.  (Based on 15.3% FICA/FUTA/Medicare in Texas, or 7.65% from the employee and 7.65% from the company).  The company remits $153 + $153 = $306 to the government.

Applying this to a $10/hr minimum wage raise:
Company's payroll expense per week = $10/hr x 40 hrs = $400.  Company payroll tax = $400 x 7.65% = $30.60.  So total payroll expense is $430.60 per week per a LEGALIZED employee.

Converting back to hourly: $430.60 / 40 = $10.77/hr.  As long as the employer pays an illegal and doesn't get caught not paying taxes, they can save some cash.

I already knew about employers match, thanks for being stuck up. Oh, and what happens when the IRS notices the employer is somehow running their business without any labor? Or what about the huge cash transfers? Anything over 10k attracts the FBI and the NSA who now think you're dealing drugs.

Pug wrote:

I live in South Texas.  There's laborers around here that won't do work unless you pay them cash.  Because then there is no "paper trail" for cashing a check.  I don't know where you're from, but enforcement around here is harder then arguing "everyone will make the morally right choice", it's day to day life where I live.  I know of companies which have hired a full factory shift of illegals...and got in trouble.  They were forced to pay some more to the government and a fine...but how many years have they been doing this without getting caught?  Did they stop?  Probably not...  They should get there asses handed to them in my opinion.

If illegals are willing to take risks for about $5.50/hr, don't you think $10.77/hr will mean their will be more of them?

Imagine if they never got caught because they reported taxes taken from their workers wages? The government never would have noticed and they'd be making greater profits.

What do illegals risk by coming here? Being sent back home so they can spend whatever they were able to send back? It's not willingness to take risks, its about oppertunity costs, silly. Way to demonstrate your grasp of economics.

Last edited by Pug (2006-11-10 14:58:51)

HURLEY wrote:

Dumb topic.

who agrees?

Pug wrote:

You are talking about those who at working on a green card or have applied for citizenship.  These people are NOT illegal aliens.  Green carders pay tax via withholding, they are in the process of becoming naturalized citizens.  Green cards are hard to get for laborers...they are only issued to those who have a skill needed or a local sponsor.  So, those who come in illegally cannot apply for citizenship, because they'll be deported.

jonsimon wrote:

No, I'm talking about illegal immigrants. Don't put words in my mouth.

Pug wrote:

the employer doesn't report their services as payroll expense because: 1) they would be required to pay them minimum wage or improve the working conditions to OSHA standards, 2) they would have to pay the company match on the payroll tax, 3) they would attract the INS, the IRS and receive a fine for breaking the law, 4) they lose the workforce to deportation.

jonsimon wrote:

I already knew about employers match, thanks for being stuck up.

jonsimon wrote:

No, they pay taxes. Employers that require SS are reporting the workers, and then must withold payroll and income taxes from their pay. How is reporting the worker's income costing the business money if the taxes are taken from the workers pay?

jonsimon wrote:

Oh, and what happens when the IRS notices the employer is somehow running their business without any labor? Or what about the huge cash transfers? Anything over 10k attracts the FBI and the NSA who now think you're dealing drugs.

jonsimon wrote:

Imagine if they never got caught because they reported taxes taken from their workers wages? The government never would have noticed and they'd be making greater profits.

jonsimon wrote:

What do illegals risk by coming here? Being sent back home so they can spend whatever they were able to send back? It's not willingness to take risks, its about oppertunity costs, silly. Way to demonstrate your grasp of economics.

AlbertWesker[RE] wrote:

Stingray24 wrote:

Along with those who are already citizens by birth, immigrants are part of the future of our nation - LEGAL ones.  Illegals don't pay into the system.  Doesn't make logical sense.  They're here under the radar and employers are paying them under the table.  Why report any income for them and cost the business money when they don't exist in the legal system?

And that right there is what the left really needs to understand about immigration.  Good job sting.

Pug wrote:

Hiya Jon.  This will be my last post on this topic.  You haven't researched any of this at all.  So this is fruitless.

I thought numbers would be helpful, since the quote code is getting hard.  I thought I would actually post the definitions.  Read them because you are not correct in your definitions, which is causing my excessive explanation.

Jonsimon - give it a rest.  You have absolutely no idea what you are talking about.

herrr_smity wrote:

10 dollars isn't a lot, soooooo why not rais it

apollo_fi wrote:

cyborg_ninja-117 wrote:

herrr_smity wrote:

10 dollars isn't a lot, soooooo why not rais it

Yes it is. A lot of people in Taiwan would kill to earn 10 bucks an hour... minimum wage here is about 3 USD an hour...

...but what's the buying power of 3 USD in Taiwan? For example, what does a Bic Mac cost in your local McDonalds?

Pug wrote:

Hiya Jon.  This will be my last post on this topic.  You haven't researched any of this at all.  So this is fruitless.

I thought numbers would be helpful, since the quote code is getting hard.  I thought I would actually post the definitions.  Read them because you are not correct in your definitions, which is causing my excessive explanation.

1)Wiki: Structural unemployment involves a mismatch between workers looking for jobs and the vacancies available often despite the number of vacancies being similar to the number of unemployed people. In this case, the unemployed workers lack the specific skills required for the jobs, or are located in a different geographical region to the vacant jobs. A solution to this problem is provide an infrastructure that offers training in these areas so that the demand for these jobs can be met. For example the USA provides community colleges so that more people can have the opportunity to increase their skills, which in turn increases the supply of labour in skilled areas.

Frictional unemployment (wiki again)
This unemployment involves people being temporarily between jobs, searching for new ones; it is compatible with full employment. (It is sometimes called search unemployment and is seen as largely voluntary.) It arises because either employers fire workers or workers quit, usually because the individual characteristics of the workers do not fit the individual characteristics of the job (including matters of the employer's personal taste or the employee's inadequate work effort). Some employers — such as fast-food restaurants and other providers of Jobs in secondary labor markets — use management strategies that rely on rapid turnover of employees, so that frictional unemployment is normal in these sectors.

But some frictional unemployment is beneficial, since it allows workers to get the jobs that fit their wants and skills best and the employers to find employees who promote profit goals the most. It is a small percentage of the unemployment, however, since workers can often search for new jobs while employed — and employers can seek new employees before firing current ones.

So let me ask you a quick question - about having a HS degree.  Everyone in the US is given the chance for a HS degree.  And last I checked, based on your comments on illegal immigration, are you telling me that every illegal has a HS degree and is qualified to work?  I mean, they are competing for the same jobs that the minimum wages won't work.  So is it true that a laborer needs a HS degree?  NOOOOOOOOOO

2) The East coast / West coast thing: 
a) The west coast has POOR engineers that are unemployed.  Somehow they were able to pay for a university degree, but can't afford to move?  Seriously?

b) Look above - this is structural unemployment.  Frictional is temporary, and is not related to moving.  However structural unemployment means the employee has a choice - change jobs or move.  Okay, let's say the highly qualified engineer with a university degree is too poor to move.  Do you think perhaps the HIGHLY TRAINED UNIVERSITY GRADUATE might consider another field that actually is hiring in the city?  The definition of structural unemployment implies people HAVE TO change careers, yet you are saying they can't because they can't find a job in their field?

3) Currency - the Dollar & the economy

Really what you mean here is the currency standard.  The dollar is the international standard, which results only in a more gradual change in the economy for the nation who owns it.  Meaning - both the peaks and the valleys are never as high or low as they would be without this advantage.  Secondly, growth and contractions are more gradual.  I kind of agree with you somewhat on the investment side, but most people will invest overseas to balance their portfoilo.  There will be a little less investment in the US, but it won't be cut off.

4) You need to understand what an illegal alien is.  They are people who are working for companies who pay them on the side.  You are confusing them with those in the naturalization process.

5) Ok, this one is weird:
And? Raising the minimum wage reduces quantity demand for labor to begin with, so the immigrants will only be picking up jobs we couldn't have worked anyway.

Are you saying that now more people will be willing to work a minimum wage jobs?  Well, companies don't want to pay employees more.  Illegal immigrant wage opportunity just doubled.  There's a flood of new immigrants now.  They are in competition for work here, so they are now willing to work for $7/hr.  My hypothetical company doesn't want to double payroll expense.  I'm going to save $3/hr and hire an illegal.  So you are absolutely wrong on this point.

6) Exactly so they can't receive refunds.  LOL - you mean they can't receive money they didn't pay.  Are you saying a refund is a benefit?  An IRS refund is your own damn money!!!

7) Sales tax logic - see #5.  Seriously, you need to read something on the relationship between minimum wage and illegal immigration.  More people are willing to come here for $10/hr than $5/hr.  How many businesses will be loyal to the law, and therefore enjoy a DOUBLING of their payroll expenses?  How many will survive the expense?  Will the public enjoy that their products now cost more?  Will people now buy less from the US and import more?  Inflation anyone?  Or, wait...more illegals are here and are in competition for the same jobs...will companies just pay them the same amount and fire everyone else?

You displace the current workforce by forcing companies to fire their employees by 1) finding a cheaper workforce, 2) reducing the demand on their products by increasing the cost of the products they sell, 3) increase the competition for a lower paid workforce.

You are missing the connection - if there are more illegals in a region, they need to actually get paid to spend money and get charged sales tax.

8) Holy crap - you don't understand that raising the minimum wage increases inflation.  Holy crap - you don't understand the relationship between the minimum wage and illegal immigration.  Go to wiki.  READ SOMETHING.

9) IRS refunds.  Again, you don't know what an illegal alien is.  And green carders ARE entitled to an IRS refund if they overpay.  So again you are wrong.

Jonsimon - give it a rest.  You have absolutely no idea what you are talking about.

Last edited by nlsme (2006-11-13 08:28:27)

Pug wrote:

jonsimon wrote:

Pug wrote:

Hiya Jon.  This will be my last post on this topic.  You haven't researched any of this at all.  So this is fruitless.

I thought numbers would be helpful, since the quote code is getting hard.  I thought I would actually post the definitions.  Read them because you are not correct in your definitions, which is causing my excessive explanation.

Jonsimon - give it a rest.  You have absolutely no idea what you are talking about.

Pug, stuff it up your ass, because that's not what the ECONOMIST behind me, OR THE ECONOMICS BOOK next to me says.

Your excessive explanation is your own doing as you distance yourself from debate in favor of your ego.

LOL - I advise you to read the book then and maybe listen to the guy talking to you.

And yes, there is a debate...raising minimum wage = better life for the poor versus not doing so.  But, if you can't defend your information...because there's too many errors in what you have supplied...maybe you should have given up earlier.

herrr_smity wrote:

10 dollars isn't a lot, soooooo why not rais it