I saw Marilyn Geewax on the C-Span Washington Journal, November 28, 2005 talking about this article she has researched and written. Many of the callers were opposed to any raise in the minimum wage because it might force the employer to raise the price of whatever it is the company is selling.
Not necessarily true, Ms. Geewax told the caller. If workers had more money to spend, they might buy more of the product and thereby increase the sellers income and if that happened the merchant wouldn't have to raise the price.
Marilyn Geewax doesn't pretend to know all the answers. She readily admitted that the American economy was a complex problem to solve.
One of the callers talked about his increased costs if the minimum wage went up. He said he would have to pay more in Social Security and other taxes.
What will that cost him? The employer matches Social Security. Current rate is 6.25 %
If you are earning $5.50 an hour, your employer pays thirty-five cents for every hour you work. If you worked 40 hours a week your employer would pay $14.00 to the Social Security account in your name. You would have the same amount deducted from your paycheck.
If the minimum wage increased to $7.15 an hour your employer would owe forty-five cents per hour / $18.00 per 40 hour work week.
