Increasing the Minimum Wage at Zero Cost to Taxpayers or Corporate Shareholders
There is considerable debate right now about whether to pass an increase in the Federal minimum wage, from $7.25 to $10.10 an hour.
Supporters of the proposal say that boosting the minimum wage would bolster the earnings of about 16.5 million workers; provide $5 billion a year more for families living in poverty; and contribute $12 billion a year more for families earning from one to three times the poverty threshold.
Opponents of the proposal say that it would cost businesses too much and ultimately end up reducing total employment by 500,000 workers by the second half of 2016.
Yet, clearly, standing pat is not a zero-cost option to the economy.
As Mark Lieberman, Senior Economist and Managing Director at Economics Analytics Research, reminds us, this is a complex problem that impacts our entire society. Indeed, says Lieberman, at current wage levels, many hourly workers are compelled to use SNAP (food stamps) and other government subsidies, which are funded by taxpayers. At current wage levels, taxpayers are forced to subsidize corporate profits or public sectors inefficiencies.
So, what if we could help workers by increasing the minimum wage at zero cost to taxpayers or corporate shareholders?
That sounds like a true win-win outcome.
But, first, we have to understand that we don’t have a job crisis in the United States.
Instead, dated technologies, manual processes, socio-economic realities of workers and the surge of the mobile Web have created a job recruitment crisis that is costing corporate America at least $340 billion as a result of inefficiencies in recruiting and retaining hourly workers.
Approximately $30 billion of this total is spent by companies in inefficient ways as they devote over one billion hours to manual processes that pre-screen the more than 100 million hires every year in the hourly jobs segment, which represents nearly two-thirds of the U.S. workforce. The $30 billion also includes job-advertising inefficiencies and the corporate brand damage that occurs when hourly job candidates have bad experiences applying for positions with companies.
If companies addressed this $30 billion inefficiency, they would have more than enough money to offer the 3.6 million Americans who are at or under the Federal minimum wage a 50 percent salary increase.
A large portion of this $30 billion inefficiency can be eliminated through mobile-first technologies that integrate hourly job advertising, hourly job application processing, skill assessment, and training and certification that assure employers of high-quality hourly employees.
It’s critical that these technology solutions are mobile-first, because most hourly workers in our country access the Internet only through their mobile phones. Unfortunately, though, only 15 percent of the public- and private-sector employment sites are mobile-ready.
Looking at the fundamentals of the job recruitment market in America today, it’s clear that we’re still in the same inefficient place we were decades ago, when classified ads in printed media, plus resumes and cover letters, were the norm – even for hourly employment.
Today, we have powerful mobile technology that works 24x7 to remove these inefficiencies in the system.
By failing to take advantage of this technology, we’re short-changing millions of American workers who want and need hourly jobs; and we’re also holding back millions of American companies that are eager to have these productive workers on board.
But, just as significantly, we’re missing a rare opportunity to help American families earning minimum wage increase their incomes at no cost to taxpayers and corporate shareholders.
Image credit: Peshkova/Shutterstock
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