There is a simpler way to compute the minimum wage while also guaranteeing full employment. Let the federal government become the employer of last resort and leave participation to the will of the employee. The management of the program would be best left to local leaders who know best how to deploy the labor that the federal government would pay with its power of the purse and mandate that the wage is set with consideration given to the local cost of living variables, but high enough to provide basic needs and dignity. There is a logic that states the federal government is responsible for doing so, which I will explain.
Taxes create unemployment. In fact, it is their primary purpose for any sovereign currency-issuing government, not “funding” anything. To drive the acceptance of the currency that only the federal government can create it first imposes a tax on the people and enforces payment in its currency. Before it can collect the tax it must spend/create its currency into the economy in sufficient quantity to pay the tax and provide enough residual currency left over to store value from commerce or the people figure out the government is simply using the tax to steal resources and labor without compensation.
Bingo!! The currency-issuing government can now provision itself without needing a revenue stream and becomes the price setter for anything it purchases. At that point, the currency becomes a no-cost commodity that can be used to control/manage the private sector economy, but that comes with a responsibility to do so, using taxation as inflation control, to provide full employment at a livable wage in the economy. This responsibility is clearly defined in Article 1: Section 8 where Congress is mandated to create the currency “for the common welfare”.
The founders realized that economic freedom was key to all of the other guarantees the Constitution provides, which is why it mandated that spending appropriations originate in the “people’s house” where representatives are most sensitive to the democratic process that makes them answerable to the voters. They fully realized the conflict between capital and labor and did their best to provide labor with the controls it needs to assure its freedoms. With the system they put in place the government is never beholding to capital to “obtain” spending power so it is free to maintain full employment.
The perversion/illusion of taxes “funding” government’s spending at the federal level has been a well-executed propaganda campaign that capital has executed to the great detriment of labor. It is also largely responsible for much of the social strife that is tearing our society apart currently. The balance of employment has been shifted to provide a stable of desperate unemployed to give capital a constant advantage in setting wages, and the simple dynamics of “first fired/last hired” in its preferences have resulted in the race and gender issues we now see as taxpayers falsely view the population as divided between “makers and takers”.
This is exactly what the founders meant to avoid as it provides the illusion that we “need” wealthy people to fund our government and economy, which is the direct opposite of reality. If unemployment exists in the economy it is directly due to the government’s failure, either in taxing too much or allowing extreme wealth accumulation without countering it with injections of its currency. The best way to deal with wealth in this economy is to make it irrelevant and for Congress to utilize any slack in the labor supply by deploying money and resources to provide for the common welfare and full employment separate from the whims of capital.
