Minimum wage increase by other means
August 08, 2009
The employer mandate provision included in the House Democrats' bill requires employers to either provide health insurance (with upto 72.5% of the premiums) to all employees or pay an additional payroll tax. Based on the average employer-based family plans cost of $12,700 in 2008, it means additional $8,255 per employee per year. Dividing by the number of hours worked in a year (40 hours per week * 50 week), we get additional hourly wage increase of approximately $4 per hour. The current federal minimum wage is $7.25 per hour. Thus, the employer mandate effectively increases the minimum wage by more than 50%. Wonder what that will that do the already high unemployment ratio of more than 9%!