Rebuilding the Middle Class

[WN1 Hit]

Good question.
The social security payment burden is now being taken entirely by the employer, so every employer has a legitimate reason to cut everyone's pay by 7.5% when this new system is implemented.

If the baker in question made $50k gross, then the employer could reasonably change that to $46,750 without affecting the take-home pay. The 50k + 7.5% cost of his pay now is $53,250. The new cost of his salary to the employer would be $46,750 + 12,588 = 59,338 under the new system.

If the baker in question made $50k take-home, then the employer could reasonably change from $53,250 without affecting the take-home pay. The 53,250 + 7.5% cost of his pay now is $57,244. The new cost of his salary to the employer would be $50k + 12,750 = 62,750 under the new system.

In my youth I actually worked at a bagel shop. We made them the old fashioned way, no par-baked garbage that you just need to heat up. Every morning our baker showed up at 3am to start making the bagels. If the salary of the baker cost an extra $5,500 or 6,000 it would not have affected the cost of food. If the owner had to live with $100 less profit per week, he would still be able to afford his 5 bedroom house.

The new system would not affect anyone else in the shop, since the rest of the staff was part-time service employees that all qualify as "registered students" for the rebate.

Will the new cost structure take some adjustments? Yes. The whole point is to change behavior to fully utilize employees. If we tweak the new system to have the same costs as the current one, then nothing will change. I would hope that the new system would prompt changes like the one that actually occurred in that bagel shop.

Here is what happened...
The baker who had some sort of food-type associate's degree got hired by a local nursing home to be their nutritionist. She plans and organizes all the menus and prepares special meals for special needs like diabetics. She also got a healthy raise. The new system rewards this nursing home for fully utilizing her.

The owner took over baking 2 days a week and hired a part-time baker for the other 4 days. She was a single mom, so she would qualify for the "rebate" as well. It was nice for her to spend the wee hours working and have the whole day free to be with her kid.


Will adjustments have to be made? Yes
Can adjustments be made? Yes


As for your tax comment, I am totally in support of some tax increases on the upper class and some reductions to the lower/middle class tax burden. But that's a subject for another thread. I think this plan in conjunction with some income tax changes could do wonders for the economy.

The last time i argued with Rota about how to solve poverty... he gave me this.... ^