Forum Post: Require Businesses to Reduce Poverty Levels with their Hiring Practices

Suppose 90% of the population of a region is living above the poverty level. Suppose that there is a major business operating in that region that hires 80% of its workers at wages below the poverty line. This business is clearly a net detriment to this region, driving out fair competition.

The current method of trying to address this - minimum wage - has a primary effect of driving inflation. It has NOT achieved its intended effect of improving the quality of life for the working class.

The generally proposed alternative - a living wage - is nothing more than another way of saying "minimum wage", as it is generally applied to all workers.

There are some jobs that are NOT worth a living wage. There are some people - who have their needs met through other means - who are willing to work for less than a living wage. Teens who just need money for gas; mom and dad are paying for their subsistence. Retirees living off their savings, who are just trying to keep busy. Most of the living-wage suggestions I've seen would have required these people to compete for work with those who are trying to survive, driving wages lower.

What's needed is a strong pressure for businesses to hire employees at living wages, but not an absolute mandate that they do so.

I propose that all businesses that hire 10 or more employees be required to pay a percentage of their employees (equal to the percentage of people in the region living above the poverty line) at least a living wage (equal to the poverty line) and all others at least minimum wage.

So, if the poverty rate is 10%, an employer of 20 people may pay no more than 2 of those employees the statutory minimum wage; the rest must be paid at least a calculated living wage.

The advantage to business is that exploitative competitors will lose the unfair competitive advantage they gained from the unabashed wholesale exploitation of their workers. The advantage to impoverished regions is that their lower manpower costs serve as a major advantage to business investment. The advantage to taxpayers is less need for welfare programs. The advantage to workers is a fairer pay schedule.

The apparent disadvantage to SOME business owners will be increased labor costs. Frankly, if this is your main concern, you're one of the exploitative people that are part of the problem. Most people who find themselves in this situation will have done so by having been forced to compete with others who chose to do so. Still, you're part of the problem.

Some notes that have come up when I've presented this to other forums: Whether an employee works part time or full time, they count as a full employee. An employer hiring 200 man-hours of work/week could hire 5 full-time workers (including their benefits) and be exempt from this rule; if he hired 10 part-time workers to do it, he would be subject to this principle. The reason for this is to push small- and medium-sized businesses to favor full-time employees over part-time, push them to adopt business models that are not inherently exploitative.

Why not include small businesses? 1. Because they aren't typically the wage drivers - large businesses tend to drive the job market; 2. Because the granularity of the system would put them at a major disadvantage. Suppose a poverty rate of 12%. An employer of 1 to 8 people wouldn't be allowed to hire anyone under a living wage, not even a family member whose needs were met in other ways. The 10-employee limit may not be ideal; 20 may be a better number.

What do YOU think? How can this idea be improved upon?