Republicans continue to insist that we can no longer afford the public safety net, that we must reduce the effectiveness of Social Security, Medicare, Medicaid, and unemployment insurance. What they refuse to see is how their sponsors contributed to the problem, which also contains a solution to the problems as they see them.
The problem is there are so many poor and working poor who need help. In 2010, the poverty level for one person under 65 years old was just over $11,000 per year. Assuming a work week of five days a week, 52 weeks per year (ignoring paid holidays as often these are not paid for not working), that works out to about $5.50 per hour. Obviously this is an average as many of these folks do not work full time. The federal minimum wage is $7.25 per hour, so also obviously this is not enough to live on. So, the working poor need food stamps, unemployment insurance, Medicaid.
The problem is not the costs of these safety net services, but the demand for them. Scumbag employers like Wal-Mart employ people to show their employees how to apply for these safety net services because Wal-Mart has no intention of paying their employees what they are worth. Wal-Mart could afford to double the wages paid to its employees and not affect their prices at all. What they would have to sacrifice is their obscene profits. Doubling their wages would drop their profits out of the obscene level into the extremely, extremely good level, that is the only people affected would be extremely rich people who would end up still extremely rich.
The minimum wage of $1.60 an hour in 1968 would be $10.59 today when adjusted for inflation, instead it is $7.25. The reason? The “business community” doesn’t want to pay people what they are worth. “Oh, but that would make us uncompetitive. More jobs would be shipped to China,” they exclaim! Bugabugboo!
This is nonsense. We collectively are paying for the greed of these people in the form of the extra demands on the safety net. The working poor receive money from all of us in the form of housing vouchers, food stamps, and Medicaid and pay little, if anything in the form of federal taxes. In other words, the American tax payer is subsidizing obscene profits for these businesses. If they were to pay people what their labor was worth, the demand for those social safety net services would shrink, and the taxes those people would pay would reduce the federal and state deficits.
“We collectively are paying for the greed of these people
in the form of the extra demands on the safety net.”
And the argument that “high labor costs,” what we call “fair labor costs” would price us out of the market is ridiculous. There is no foreign competition for American service jobs. One doesn’t send one’s car to China to get it washed. And, in Germany where their labor costs are higher and their labor productivity lower than here, they have the second highest level manufactured goods exports in the world. How is it that Germany can do it and we cannot?
This sanctioning and subsidy of corporate greed has extreme costs: 22% of children are living in poverty is just one. The loss of dignity to the working poor will cost even more dearly in the future.
And the demand to cut Social Security is ridiculous. Social Security is the most successful anti-poverty program ever created. Even so, the median income of Americans over 65 is less than $20,000 a year. Nearly 70 percent of them depend on Social Security for more than half of this. The average Social Security benefit is less than $15,000 a year. This is not exactly largess. And, Social Security benefits are paid for separately out of payroll taxes and do not contribute to either federal deficits or the national debt. Currently Social Security has $2,600,000,000,000 surplus! There is no problem with Social Security and solutions to future problems are relatively simple, like removing the cap on earnings upon which the payroll tax is paid.
The Republican’s masters have created the problem with their unbridled greed by attacking labor unions, changing federal laws protecting workers, and bribing our public officials to create tax and environmental laws that favor the rich and corporations. Then, after creating the problem, they offer to solve it by reducing services to the poor and the elderly. And these scum sucking politicians are willing to do this for enough money to remain in power. Is it because they like doing the bidding of the rich masters? Is it because they like grinding the poor under their heels? Is this the legacy they want to leave behind?
Pay the people and many of these artificial problems disappear. Instead, I imagine these assholes want their salaries to be doubled because they not only have to solve the problems but create them too.
I don’t mean to troll and comment on everything you like but two things,
1) Social safety nets are important, but administered from a federal level there is bound to be a lot of waste and, yes, they will be unaffordable. They need to be distributed by more local governments like states and large cities.
2)There’s actually a logical reason that wages don’t keep up with inflation. Because the U.S. is a capital intensive (i.e. technology and machines) country more than it is a labor intensive country, investment growth in capital would rise slightly above inflation, which it has, and labor wages would slightly underperform inflation, which they have. That’s not only very basic economics, but it’s logical and intuitive. In China, you’ll notice the income gap is narrowing. That makes sense because they are labor intensive. In the U.S. owners of the capital keep more money because they don’t have to pay people. Now, socially, that opens the door for more affordable redistribution. But, again, that has to be done efficiently and provided in forms that don’t disincentivise.
Comment by jonrmack — January 9, 2013 @ 4:38 pm |
I wasn’t talking about inflation. I was talking about productivity. If American workers produce more goods in less time, should they not benefit from that? They did until the 1970s and then … nothing. You say “In the U.S. owners of the capital keep more money because they don’t have to pay people.” They aren’t paying the people they have like they were before. The owners are making more and more money off of more and more productive workers but the workers aren’t benefit … and they were before. The saying was “a rising tide lifts all boats” but recently the money has been going into executives pockets and owners pockets but not in workers pockets. What changed? Why are the same workers being paid less for more work?
Comment by stephenpruis — January 9, 2013 @ 8:16 pm |
Because we rely more on technology. That decreases the need for as many workers, giving owners of capital and technology more power to “pick and choose” if you will, which lowers the price they need to pay people. They may have more output per worker, but that’s due to the technology which allows owners to rely less on workers. For instance, if I have the power to employ less people the guy that’s more concerned with keeping the job will offer to do it for less money. The increase in available labor essentially creates a downward wage bid for work. “i’ll do that job for 10 bucks an hour.” “i’ll do it for 9.75.” “I’ll do it for 9.50″ etc, until you reach a point where he says, “This isn’t enough for me to live on, so I might just as well not work at all.” This minimum breaking point is what employers absolutely have to offer, or else they won’t find any workers.
Comment by jonrmack — January 17, 2013 @ 12:54 pm |
Your comments indicate that you believe that there is such a thing as open markets or free enterprise or competition, when those things do not exsist. The power of unions has declined because powerful political forces creasted laws that under cut their power. Why were those laws created? By corporate money paid to bribe public officials. There was no hue and cry from ordinary people for this to be done. It was done to restrict the power of the marketplace for labor to the benefit of employers. And that is just part of the story.
Comment by stephenpruis — January 17, 2013 @ 1:35 pm |
I agree that the system is corrupt. However, as long as people are not forced to work, they can still make the rational decision to not work if the compensation is not enough to live on, thus corruption would have no effect on that particular area of the market. Furthermore, unions have had a hand in market manipulation as well. I don’t think it was “greedy” corporations that begged and pleaded for Washington to set a free market skewing price floor most people call the minimum wage. Minimum wage is interesting because it implies that people are stupid, and irrational and cannot decide for themselves weather or not a wage is substantial enough to live on. You see, if a wage wasn’t enough to provide means for survival, then people should be smart enough to just not work. I don’t think it was corporations that begged for affirmative action or legislation that makes it substantially harder to fire certain demographics, even if they are simply not performing to standard. Finally I’d end with this, anytime you are not forced to buy, sell, work, or set certain prices you are in a free market. No one is forcing you to work, however, there is a minimum wage, putting the consumer (employers) at a skewed disadvantage.
Comment by jonrmack — January 17, 2013 @ 2:35 pm |
No, you don’t have to work. You can just starve. This is a pay-as-you-go society. Nothing is really free. Only a brave few have decided to live off the land and not particpate in the labor market.
Comment by stephenpruis — January 17, 2013 @ 2:47 pm |
That’s exactly my point. Theoretically, rational people would decide to starve quicker than string it out by not being compensated enough. Although the reality is, they would simply live by self-provided subsistence, instead of working for someone else. Thus, if employers are not compensating enough to provide a slightly better life than the person could for themselves, they would find themselves without people willing to work and would have to raise their wages. That wage, in perfectly rational markets, would provide just a slightly better life for the person than they could provide on their own. Markets aren’t perfect, they’re full of guess work. So the wage typically ends up at a slightly higher premium to that, which sets a higher standard of living and a higher threshold for poverty. When wages correct, as irrational markets do, they fall slightly below that threshold, but are typically and historically still above the “is this providing a better life for me than i could on my own” threshold. However, because of the new and familiar standard of living, it does not FEEL this way to most people, and they thus consider themselves to be ABSOLUTELY impoverished, when the reality is they are RELATIVELY impoverished.
Comment by jonrmack — January 18, 2013 @ 10:27 am |