Rasing Wage and Reconstructing the Economy

Many of my friends here know that I moved to Los Angeles just over a year ago. I moved to Southern California to pursue the completion of several projects including the construction of a lifestyle design store, the development of a multi-regional art magazine and my most passionate aspiration of sharing romantic idealism in the form of feature film. I have been incubating these projects along with several others since working in the custom and fine furniture industry in New York in 2002.

The reasons I chose So Cal above all other regions are its economy, social class and the simple fact that no where else in the country do you find such abundance of dynamic design. I had learned in 2005 shortly after I had arrived to La Jolla, San Diego that Southern California had the fifth highest economy in the world at the time. Where better of a place would you expect to be able to find the interest and capability of fueling such projects that are designed to appeal to the most specialized decorum?

Since my arrival to LA the economy has been continually declining and the only residents of California that seem to appreciate this decline are the prisoners that are being released due to limited funds and perhaps non-residents that are interested in purchasing property.

"As of June 30, the assessed value of all taxable property in California was $4.448 trillion, down $107.2 billion from a year earlier." (http://cfecon.blogspot.com/2009/08/california-property-values-drop-first...)

In the graph below you can see that housing prices doubled from 2002 to 2006 and have fallen more rapidly since 2006 than they had ascended.

(Graph sited at: http://mysite.verizon.net/vzeqrguz/housingbubble/los_angeles.html)

And as you can see in the graph below, the employment graph has a very similar pattern between 2004 and 2009 to that of the property value.

(Above graph sited at: http://valleyecon.blogspot.com/2009/02/california-employment-graph-updat...)

Below is a graph that shows gas prices from 2004-2009.

If a home owner purchased a home in 2004 and if they have not increased their credit spending habits since, according to the wage graph they should currently be in a fairly similar income to debt ratio now as they where when they purchased their home in 2004 (a little less because a 4% increase on $100 becomes $104, then from that point a 4% decrease becomes $99.84) The home owners who bought their homes near 2006 are having a much tighter budget and are often forced to depend on assets other than income to cover their debts and credit obligations. If they have limited assets, it often results in foreclosure. Foreclosure compromises the banking system and statistical expectations as well as the bank's taxable revenue resulting in an increased government deficit.

I have a plan that I am confident will help the economy, including American workers, banks and the Government. It does come at a cost, however this cost will only negatively affect the top of the capitalist system.

Its common knowledge that large business owners financially benefit the most out of all involved. From there the executives benefit second most and as we go down the line of responsibility, we decrease the scale of pay.

The government has a sliding scale of taxation to wage. A lower wage is taxed a smaller percent than the percent of tax taken from the higher wages. This seems fair seeing how we all have similar fundamental needs. I propose a mandated increase of minimum wage for employees of large companies. This employee wage increase is to only negatively affects the business owner, otherwise known as the employer. If this is to happen, not only will the employees benefit, the government will benefit by first experiencing and increase in income tax revenue and second by tax they receive from the increased volume of the banking business.

The banks will benefit because, one, the people that see this wage increase will be able to better cover their debts, two, more people will better qualify to take out a loan and three, the banks will experience an increase in interest revenue from the business owners who borrow, because their interest rates are directly related to the borrower's income/assets. In other words, the business owners have a lower income now because of this plan therefore pay a higher interest rate to the bank.

I only propose this for "big business", as many small business owners do not generate a much higher personal income than that of their employees as big business owners do. This proposal should be based on a sliding scale where by the wage increase is congruent to the net company return.

[Hierarchy good, Capitalism not so much]

Now I'm not out to get the very wealthy, i simply feel there are so many out there that need a little help and the few that have it all could certainly provide that help. I can understand a wealthy person wanting to protect the interest of their family's generations to come, however, most wealthy people get that way because they are intelligent, talented or otherwise gifted...or have inherited it from someone of the like. Chances are their gift/intelligence/talent is due to genetics, so why in the world would they think their generations to come would have any problem providing. (I'm referring to the individuals that have a net worth large enough to build an empire)

I love California, if I had the doe I'd fix it in a second. There are people in California that could pool their resources and fix it, it would only take 20 of them to fix it, but then they'd just be heros and no longer wealthy. I guess if 40 very wealthy people pooled their resources then each of them would become only moderately wealthy heros...and who would want that? Instead we all have to do our part. until then, people get kicked out of school b/c the financial aid dried up, people get sick and die because medi-cal can't afford it and...we'll still see 400 Bentleys w/in a 10 block radius of where Santa Monica crosses Wilshire.

God bless America

where did I put my wallet?

Views expressed on this page are those of the authors and not necessarily those of Campaign for America's Future or Institute for America's Future