The US government really has few new ideas when you hear what congress is proposing. Here is an idea from an economist to create a new form of currency to allow on the spot employment of workers at the minimum wage with all taxes and some health insurance premiums paid incrementally. Say the worker nets $8 an hour after taxes and the one hour labor currency units cost $12, a $4 mark up , The employer can then find immediate employees. The worker can take the units to any bank or to any grocery store and get $8 worth of goods and the taxes are prepaid. The insurance premium included would go directly to a real Medicare fund and not an imaginary one say $1.2 per hour out of the $4 collected. This way people who hire minimum wage workers pre pay the taxes due and buy a book of 10 or 100 or 10000 hours in advance. The advantage of a currency like this is to say to those who want to back the dollar with gold or some other commodity that there is a labor based alternative. Traded on an open market the US minimum wage could become something like an international currency.
The minimum wage notes could also be printed or coins and put in circulation but there would need to be recharged with the tax payment. That was not possible with specie coin or bills until now in the digital computer era. A used coin or bill would now have a scan able encrypted code saying when it needs recharging by deposit to a bank and the computer system would instantly recognize non tax paid encryption codes. The currency could also come in various types for employees that employees might like to hire like foreign guest worker which would have a different rate of taxation and a separate foreigners only social security and medical insurance premium added on. This currency would not be opposed to paying workers in ordinary currency except workers might prefer it because their taxes are prepaid and when they spend them on their account they get credit to be vested in the pre-paid benefits paid based on a minimum number of hours worked. Every time the notes or coins are scanned the worker would also scan his Id into the computer system to show how much he or she contributed as a worker to the system. Once scanned to buy things in stores or taken to a bank tor deposit the bank would recharge them to sell to employees or to employees if they decided they wanted to buy some work credits not worked for and pay the tax for points in the system.
One reason to do this would be to get enough credits to give the worker a 1000 dollar deductible medical insurance platform that might require 1000 hours of work. Those paid in higher wages than minimum wage could be paid in multiples and fractions of the same currency units up to say the $40 an hour level, Maybe higher. This $12 per hour rate for an $8 an hour tax free job is a 50% mark up which is too high for people working paying social security taxes and for their own health insurance so there probably has to be a cut off point and/ or a more reasonable rate of say 25% added on which would cause the 8 an hour minimum tax free wage to cost employers $10 an hour. The $12 an hour figure was just for illustration purposes and might be more than minimum wage employers can afford to pay. The idea is just to make hiring employees for small businesses easier and get the taxes, unemployment insurance and medical insurance payed automatically.
The system is not designed to cut taxes but it is designed to create a US dollar that starts to have an intrinsic underlying value without resorting to the nonsense of mining gold to do something almost similar. The problem with mining gold to back the dollar is it is a huge waste of diesel , coal and other energy resources. Instead of mining coal and drilling for oil to use as fuel these products are burned away to produce energy that is stored in the form of gold that never again can be used for heating homes or making electric. Co-generation is possible but probably impractical for the gold mining industry because most gold mining happens where the gold is and that is not where the electric grid is. The problem with the US government moving to devalue the dollar to save the American worker is very misguided because it would probably please gold bugs turning gold into a monumental waster of our fuel supplies to produce more gold, not just here but all over the world. That would cause energy prices to go up to higher multiples than anyone but Oil companies and OPEC would be pleased to see happen. There is a definite relationship of “horse power” and “man power” per unit of energy. Anyone really worried about carbon dioxide getting into the atmosphere would also be against pro union labor laws that will devalue the US dollar but as politics happens those two economic oppositions are members of the same side in party politics.
This proposal prevents the destruction of the US dollar but linking it to something national and foreign interests understand as an hour paid for of minimum wage unit of currency. The US treasury can print and coin as many of these as they want to and stockpile them but they are worth nothing till an employer goes to buy them in advance of hiring workers. It is not a substitute for the US dollar but it could go overseas and allow foreigners to recharge the notes with a different encrypted rate of labor prepayment or none at all which leaves the $8 residual tax free hour value . Eventually the $8 exchange becomes just an hour of labor. A movie theater could charge 1/3 hour or 1/2 hour or 1 full hour for a seat in the theater for a movie. Congress already controls the minimum wage level on the federal level but not the state level so they can set the base dollar value and it could be a lot lower than $8 an hour and states could add their added rates an included unit surtax and yielding a net tax free dollar rate per hour that might be more than the federal level. Computers make smart currencies possible. Already State governments payout benefits with debit cards. There are plenty of ways government can still abuse the currency if it wants to. That can be prevented initially by keeping the system simple with the rates limited by law to reasonable levels and the rules spelled out such that no units would have value until purchased at the higher rate.
How the system would work with government deficit spending that it should limit deficit spending. The best thing not yet included in this discussion is that the US government would create a sub currency system where the more people at the lowest level of economy work the most to create the most money of this sort in circulation. This sort of currency unit would allow those on welfare to work a few hours at a time and record their work upon purchase or deposit of funds to augment their welfare income and be paying taxes at the same time. It should not mater to the government that they are working and also getting welfare because getting welfare alone is not paying any tax. If ten hours worked nets $80 immediately there will be more people seeking minimum wage employment and maybe coming off welfare. There would need to be pocket scanners for workers to determine in advance that the currency they are taking is not worthless but fully charged because the encryption process makes it temporarily worthless after the money is deposited back into the national banking computer system. It might be possible for Visa, American Express and Master card to Issue these units in credit card form and take a reasonable (small percentage) for processing out of the government mark up.
Anything the government experiments with of this nature could be something out of Pandora’s box. Government can get confused by the idea of minimum wages and try to impose this as the maximum wage in a communist plot and that would be as bad in the long run as the worst of possible government schemes. Otherwise , It would be worth a try. Labor notes could be printed out with encryption online in a way that does not register the employer in any way. If the government starts registering employers who use it that may be a draw back. Employers could try cheating by paying them out for more than an hour of work per unit. The system is only as honest as the American People but at least here the Gold standard can be avoided and energy feed stocks will not be wasted generating idol gold stocks that do not act as a battery to later discharge energy for use in the rest of the economy. A separate more sophisticated calorie or BTU would equate the work that a unit of fuel could produce to run the economy and as a calorie that could be converted into a labor unit note because workers need so many calories of food to keep them working in theory. That could lead to a subsistence wage that nobody wants to see as minimum labor. The American way of doing business would thrive on having ready labor that automatically pays taxes. Having prepaid social security and employer liability premiums already added in would simply the lives of small businesses from the accounting nightmare that now requires a payroll company to hire long or short term. There has to be a trade off between employer and employee and here the rate would be set by congress and states, pre paid and simple to deal with. It might enable business development never seen to materialize. It could make for better faith in the US dollar and faith in the value of the US worker’s hour of labor.