His proposal was to pay all low-wage earners a “living wage”, defined by enabling a person to pay for the basic necessities of life and not depend on any form of subsidy from the government. That would include food stamps, free or reduced-premium health insurance, or any other form of being on the dole. The way to pay for this “living wage” would be to give a tax credit to the business that was paying it that would cover the difference between the “standard” wage in their industry and the “living wage.” The tax deficit this would create would be more than made up for with the savings on the no-longer-needed public assistance programs many low wage workers previously needed to live.
The benefits to this approach would include stimulating the economy due to putting more money directly into the hands of low-wage workers which they in turn would spend varying portions of. So rather than simply raising the minimum wage to $15, for example, and the resultant reduction in the number of low-wage jobs this would likely cause, more jobs would ultimately be created, and government assistance programs would shrink to cover the truly needy.
Not being an economist, off the bat I can’t see the downside in this proposal. Please join the discussion and share your thoughts.