The People shall determine the lowest wage required to enable a standard (40-hour?) work week to provide sufficient income for a single person to live a secure and dignified life in each Locality. This income level shall be known as the Standard Income (SI), and the hourly rate the Standard Wage for that Locality.
All Credentialed employees will receive at least the Standard Wage. If market conditions do not result in an employer having to pay the Standard Wage for labor in a particular job classification, the Globality will provide supplement payments to them to make up the difference, the Standard Income Supplement (SIS).
Individuals who are self-employed or who lack a Credential for the job they are performing (including the Standard Adult Set, for unskilled jobs) will be compensated at market rates.
There shall be no minimum or maximum age restrictions on employment, but non-Credentialed individuals must maintain Standard Progress toward acquiring the required Credentials.
Note that the proposals for pensions and welfare depend on this one, and it will also apply to compensation for running The System. Setting the Standard Income will require all the People’s input, and they must each keep in mind that they themselves may be living on it at some point. It will definitely need to be higher than current poverty levels, where unexpected home or vehicle repairs can mean having to cut back on necessities like food. But a certain frugalness should be required: Standard Income earners shouldn’t be able to afford new luxury cars and 5 star hotels. They should, however be able to afford to drive a safe and reliable vehicle if that is a necessity in their Locality and to travel one or two weeks out of the year or engage in other recreational activities.
It should be assumed that technological progress and population reduction will gradually reduce the need for the SIS and eventually eliminate it entirely except as a temporary emergency measure when disaster (economic or otherwise) strikes. The Matchist emphasis on improving efficiency and generation will reduce energy costs, more efficient land-use policies will reduce costs of agricultural products, and reduced populations will lower the costs of living space by reducing competition for that resource.
Instead of imposing a minimum wage, the actual rate an employer will pay per hour for labor will depend on market conditions and the Goal unemployment rate. If the actual unemployment rate is below the Goal, the SIS for those jobs that pay less than the SI will decrease, and vice versa. In areas and industries with a high level of churn the resulting variable subsidy will not require any significant changes to current practice. In other areas, employers will need to learn to pay attention to the unemployment and subsidy rates because periodically (quarterly?) the subsidy, and therefore possibly their overhead, may change. There should also be some social engineering incentives provided to the individual to encourage changing jobs or relocating if the subsidy is lower in some other job they are qualified to do (e.g., by paying them a percentage of the difference as a signing bonus, or funding their relocation).
The SIS will apply to all jobs, full or part time, and makes no allowance for “tips” or “training wages” or other customs or practices that may affect a worker’s take home pay. If an individual believes that the training they are essentially paying for with a reduced income is worth that cost, or that they’ll be able to make up the difference in tips, they’ll accept a job that pays less what the SIS assumes as a baseline. But because SIS is managed such that it governs the unemployment rate, if they don’t believe they are being paid what they are worth, they will be inspired to take advantage of the low unemployment rate and change jobs. If there is full employment the SIS will decrease to zero, meaning there will be no government imposed cost on businesses or on The People through taxes to support this system.
To prevent widespread fraud that offering the SIS to the self-employed would allow, the SIS will only be available through public corporations. Smaller and newer companies, sole proprietors, and independent contractors will continue to operate much as they do now, with complete flexibility on wage rates, payment arrangements, and working hours. Although they will be freed from burdensome income taxes, withholding from wages, and other reporting, they will have more trouble attracting low-skill employees who will obviously gravitate towards larger companies that can provide them with increased wages via the SIS system. Note that this design also completely eliminates the “independent contractor” and “part time” loopholes that many corporations use to get around minimum wage and other benefit requirements (and the resulting enforcement bureaucracy attempting to prevent that): By offering a significant direct benefit to the wage earners, a benefit that doesn’t even actually cost the corporation anything to provide (other than paperwork that is less than what they do now to process income tax withholdings), there will be no need to even worry about the classification issue anymore.
The SI and SIS are in lieu of the FairTax “prebate”, the US’s Earned Income Tax Credits (EIC) and because it also factors in percentage disability, Supplemental Security Income (SSI). It is a vast simplification over these programs and a design that brings market forces (competition) to bear: If a Locality has a high unemployment rate, SIS will be higher and employers will therefore have an incentive to create work in that area. Conversely, individuals in high SIS Localities will have an incentive to relocate to a Locality with a lower unemployment rate because they would receive signing bonuses and moving assistance from the GRF when doing so. Together these two features will significantly reduce overall unemployment rates and the resulting SIS costs to The People.
The SI will therefore also affect Locality population which introduces an additional corrective influence on it: If the SI is set too low in a given Locality, individuals will find it preferable to live someplace less expensive. Vacancy rates for rentals and properties for sale will therefore increase, which will push down rents and property values, providing a correction to the too-low SI. But the migration out would also cause unemployment to decrease and so employers will start to have to pay more employees at rates above the SI to retain them. So employers and property owners have an incentive to set the SI value higher. But if it is set too high, population in a Locality will increase which will in turn increase unemployment and therefore the SIS which will lead to higher taxes on everyone. To prevent Localities from gaming the system, the ratio of SIS payments to revenue from sales taxes collected in each Locality should also be factored into the SI calculation. Collecting the cost of living information and setting the SI again will be a key part of living under Matchism, and a process that every individual has a high motivation to attend to in order to ensure that it is done right.