A minimum wage is a means of monetary redistribution built into payroll. In my experience, proponents of the minimum wage are comfortable with some methods of legislated redistribution, whereas opponents are usually not. Often the arguments for and against minimum wage are actually arguments for and against legislated redistribution of wealth.

It is widely debated whether or not a minimum wage has a negative or positive effect upon employment to date, therefore I conclude that whatever effect it might have, it is difficult to measure.

An interesting aspect of the minimum wage is that it does not affect individuals that do not work. Thus, unlike the food stamp program, redistribution via a minimum wage requires that the beneficiaries are employed. If employment is the goal, then it seems to me that the minimum wage might be more attractive than employment-independent methods of wealth redistribution.

Currently, there are some employers in the US that do not pay a living wage, and as a result, their employees are qualifying for employment-independent government benefits. Given that the US government now requires that all residents have healthcare, the tax-based subsidies that employed people receive will likely increase over time.

As each government delivered subsidy comes with inefficiencies, including those related to delivery, auditing, and fraud prevention, it seems that the minimum wage may be a more efficient means to redistribute money from wealthier individuals to poorer ones. However, unlike the tax-based government subsidies, the minimum wage subsidy is exacted from an employer, before the employer is taxed. Yet, it should be considered that due to payroll taxes (which are 15.3% in the US), a minimum wage increase also increases the general tax burden for an employer.

The minimum wage might be considered to be an existing basic income that is tied to employment. Do I support an increase in the minimum wage? Yes, at the moment, it seems like an increase in the minimum wage could alleviate some ills of economic system whereby many individuals spend a full work week and still qualify for government subsidies traditionally meant for the under-employed or unemployed.

However, it seems to me that simply increasing a blanket minimum wage is a crude way to deliver a payroll-based redistribution of wealth. An alternative might be to tie the payroll of all employees at a company together in such a manner that the highest salaried employee’s income is limited if employees at the company are not paid the minimum wage. That is, if some employees do not earn a minimum wage, then the highest paid employees can only be paid a multiple of that wage (perhaps 10x that wage). If all employees made the minimum wage or higher, then that cap would be lifted. It seems absurd if a company that has the means to pay a minimum wage results in government subsidization of their employees when the means to pay a living wage is within the total payroll.