Saturday, September 06, 2014

ACT: "Living wage a dumb way to help poor working families"

Now here's a solid contribution from ACT.

Most of the advocacy for a living wage is predicated on the need to reduce child poverty.

But it won't.

ACT backgrounder: the living wage is a dumb way to help poor working families

The Treasury found that two-thirds of households earning between $14.25 and $18.40 per hour had no dependants and receive little in the way of welfare payments.
The red bars in the diagram below show how much goes back to the government in taxes and reduced welfare payments, such as abatement of working for families.


A living wage helps the government claw-back a lot of welfare payments including working for families, it then helps single people who have no children, and last of all, working families on low wages. That payoff matrix is before any discussion, and there must be that discussion, of the job losses from a higher minimum wage.


3 comments:

Judge Holden said...

"A living wage helps the government claw-back a lot of welfare payments including working for families..."

You should be all over it like a rash then, why is the government subsidising employers through the tax and welfare system? I guess your preferred option is no family tax credit or minimum wage, and a massive tax cut for high income earners. That'll help low income earners.

Lindsay Mitchell said...

Absolutely WFF is a subsidy to employers. And the accommodation supplement is a subsidy to landlords, and corporate welfare is a subsidy to private corporations.
Disagree with them all.

But all are forms of wealth redistribution strongly supported by the Left as either social assistance or job preservation.

Judge Holden said...

Yeah, but you disagree with them all AND a living wage, despite all of them actually alleviating poverty for working families. Tax cuts for tycoons though...