The minimum wage is a sin tax on the practice of hiring low-skilled workers

Bet you didn’t know that hiring low-skilled workers to work for you was a sin. It isn’t, but you can think of it that way because the minimum wage works just like a sin tax, say on cigarettes. A sin tax is a tax that makes the sin more expensive to commit. Sin taxes are currently the largest component making up the price of a pack of cigarettes.

Mark Perry says raising the minimum wage from its current $7.25 an hour to $10.10 per hour can be thought of as a sin tax of $2.85 per hour worked by an unskilled worker you’ve hired. If the worker works 40 hours a week that’s $114 per week, or $5,700 a year per sin of hiring an unskilled worker.

Of course, you can escape the tax by not hiring any unskilled workers. I’d bet a lot of employers will be doing that after this new sin tax is enacted. It won’t have any effect at all, however, on the true believers who support the minimum wage. Making themselves feel good and buying votes from unskilled workers who will never make the connection that it was the minimum wage increase that cost them their job is the real impetus for the minimum wage and every increase in it.

Print Friendly, PDF & Email

Subscribe to Blog via Email


%d bloggers like this: