The idea of raising the minimum wage is a popular one, but not a very good one, writes John Aziz for The Week. His idea? Abolish the minimum wage, and replace it with a "basic income policy." There are two types: Either the government pays anyone whose income is below a certain threshold to get them to that threshold (this is known as a "negative income tax"), or the government pays everyone something, no matter what they earn. The second version "would obviously require more funds—meaning higher taxes—but in a future where corporations are making larger and larger profits while requiring fewer and fewer workers due to automation, such policies may become increasingly feasible," Aziz writes.
The problem with the minimum wage, he notes, is that if a company doesn't want to pay it because it doesn't think the job is worth, say, $9 an hour, the alternative is to make do without hiring—or to hire overseas instead. Indeed, "countries with no minimum wage tend to have much lower unemployment." With a basic income policy, low-skilled people (including the young) would find it much easier to get work, because companies would be more willing to hire them. Afraid such a policy would encourage laziness? Aziz isn't: A basic income wouldn't make anyone "rich or successful," meaning "people would still have many personal and financial incentives to work and to become entrepreneurs. If anything, the fact that there is no longer a minimum wage would probably create more employment, not less." Click for his full column.