Trianglechoke7,
I have not read the other posts in this thread, so if what I say has already been addressed, I apologise.
This “solution” would be far, far worse than what we have now (not that this is any defense, of course, of what we have now).
Under your “solution,” you remove incentive for paying higher wages (so long as such wages are still below the government-mandated threshold). Whereas businesses have to raise their wage offers under a free market to attract efficient of better skilled workers, your “solution” would allow big business to pass this risk off to the tax-payer. If a business is paying its employees $4 under a free market and wants to get better employees to come its way, it has to raise its pay to $7, let’s say. But under your “solution,” all the employees are already being paid $7.50, leaving business with no reason not to just pocket the additional $3, or even to drop everyone’s pay down to one cent and pocket all $7. After all, John Taxpayer’s the one paying the bill.
This will have extremely destructive effects for the same reason the welfare system has destructive effects. Who would want to work for $1,000 a week if the government is offering you $900 a week for doing nothing? Such a system leaves the worker with the choice of doing a week’s worth of work for $100 or just sitting back and relaxing. (And when welfare rates rise, more people leave their jobs and go into unemployement, making the costs of welfare higher, thus increasing taxes, thus allowing workers less money on which to live and encouraging them to go into unemployement as well, invariably creating a vicious cycle which ends in state socialism).
In short, there is no reason under your “solution” that employers who know their employees are worth less than $8 an hour wouldn’t choose to simply sit back and relax. But let us say that Businessman Jones feels bad about the idea of dropping the pay of his $4 employees down to one cent, and decided to keep them at $4. The employees would lose much of their incentive to show Jones what good employees they are. In other words, good or hard work would be discouraged. Why? Because Jones would have to offer raises of at least $4 additional dollars (on top of the four they’re already being paid) in order to have any actual effect on the income of his employees.
Finally, you claim that under this plan, “there will be no welfare for not working.” What prevents Businessman Smith from hiring his nephews at one cent per hour to do nothing? Under a free market system, none of us would care if Smith did this–Smith’s money. But under your “solution,” I’m now paying Smith’s nephew $7.49 an hour to play video games while I work to survive.
I’m sorry, but your “solution” is riddled with problems. It would not be an improvement upon our current system, but rather would be actually worse.
Haven’t read it yet, but I have an idea of what it suggests. If one had to had government welfare, I’d go for a plan like Murray’s, as opposed to all the rubbish currently in place.