I must admit I am conflicted on this whole minimum wage debate.  In a country that brings so much success to so many people, it seems that there should be a higher floor of support for every worker.  Some predict the planned raise of the minimum wage to $10.10 an hour could cost 500,000 jobs, though I think that seems too high of estimate.  However, Seattle is considering a proposal to raise the minimum wage to $15 an hour – what impact would that have on jobs?

Based on my observation, I think a $15 minimum wage would cost a lot of jobs.  As a guy who makes a living automating business processes, I would reap the benefit of budgets spent on automating clerical jobs.  I can think of several projects my clients have to streamline operations that are on the back burner – but if their cost of labor went up 50%, those projects would likely jump in priority.

Another example:  How about this robot replacing security guards :

Watch the video, and see if you can’t imagine this thing being as effective as a person at monitoring buildings.  The quoted cost of this thing is $1,000 a month for 1 eight hour shift a day – vs $2,400 a month for security guard at $15 an hour.  I fear raising the minimum wage will increase the replacement of low paying jobs with technology.

My proposal?  Tie the payroll tax to the unemployment rate.  Anybody earning lower than $10 or $15 an hour gets a payroll tax holiday. When the unemployment rate is high, make it a reverse payroll tax on the low end of the pay scale and higher on the high end.  As the unemployment rate comes down the rate flattens out across all pay levels.  This could be revenue neutral, and  would encourage so called ‘job creators’ to create jobs in order to reduce the tax on their pay.  Maybe even this will get us closer to a 35 hour work week.   In this time where the top 10% of earners are doing much better than the bottom 40%, it seems like this seems a better approach to provide a living wage yet not displace important entry level jobs.