Jan. 18, 2014:
Is $12.50 a year too much to pay to bring over 300,000 Walmart employees out of poverty?
Should the US Government be paying out over $250 billion in welfare spending on workers whose employers shift their labor costs over to the US taxpayers?
Should the US Government be paying out $250 billion a year in hidden welfare subsidies to US employers and businesses who shift their costs over to US taxpayers?
This morning, the CPB hosted an interesting interview with Republican conservative Ron Unz, regarding the proposal to raise minimum wages to $12 an hour. Mr. Unz, multimillionaire, founded Wall Street Analytics, Inc. in 1987, as a financial services software company that was acquired by Moody’s Corp. in 2006. Between 2006-2013, Unz published the American Conservative magazine. In 1999, Unz ran briefly for U.S. Senate, and in 1994, challenged Gov. Pete Wilson in Republican primary election, receiving 34 percent of the vote. Anyone doubting Mr Unz’s conservative Republican credentials should note that in 1998, Unz spearheaded a California proposition that dismantled the state’s bilingual education system.
Ron Unz’s Explanations of why a $12 an hour mininum wage would be beneficial to America:
Here follows a rough transcript of the economic and financial reasons why a $12 an hour minimum wage would benefit America. http://www.opb.org/news/article/npr-a-wage-hike-campaign-from-an-unlikely-source/
Why push for a pay hike?
Right now $250 billion dollars of social welfare spending goes to workers who cannot survive on their paychecks. This “massive system of hidden government subsidies” for low wage employers of corporate business welfare, allows them to “shift the costs of their workforce over to the taxpayers.”
“I think businesses should stand on their own 2 feet, rather than forcing taxpayers to make up the difference.”
How much help is needed by a family of 4, with both parents working?
On $12 an hour minimum wage – a couple would make $50,000 a year, which is “doesn’t make you rich, but it is certainly enough to get by” in most American cities, dramatically reducing social welfare spending.
What workers and what jobs are we talking about?
Nearly all minimum wage jobs are “low-wage service sector” jobs that “are non-tradable jobs” that cannot be outsourced to foreign competition. This means that the extra costs of raising the minimum wage “are passed along to consumers through raising prices to keep their workers at a much higher paycheck“.
Sound ominous, right?
“Those price rises we are talking about, are very much smaller than most people realize.” Walmart is America’s largest low-wage employer. 300,000 Walmart workers average about $9.00 an hour. “All Walmart would have to do to cover a $12 an hour minimum wage is raise their prices by 1.1%, just one time.”
“The average Walmart shopper would pay only an extra $12.50 a year.”
~ Not much when compared to what the average Walmart consumer spends per year: $1,136 ~
Is raising minimum wages to $12 an hour really enough to make a difference?
“For every extra 3 or 4 dollars they earn in a paycheck, they lose $1 of Government assistance, so an increase to $12 minimum wage, nationwide, would boost the income of 40% all wage earners in the USA” and reduce welfare spending.
“The average rise for a full time worker would be $5,000 a year, which is “a life changing amount of money.”
“If their wages went up by $5,000, they would lose $1,000 to $1,500 of government benefits, leaving them far better off.”
This also means that “they earn that $5,000, rather than getting it as government welfare programs.”
“Most workers would rather earn their living, rather than getting government handouts or welfare programs.”
~ ~ ~ ~ ~ ~ ~
Shocking, Controversial stuff, eh?
Happy Trails,
steve
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This shouldn´t even come up for discussion. Anything to take the subject off the disaster in health care and what the Democrats have done. Livable wages, women´s rights and all the other nonsense is just diversions. I.R.S. scandals, Benghazi murders, “Fast & Furious” gun scandal, making appointments while Congress in session, the list goes on and on…both sides of the aisle…November is coming …. Don´t send a Republican or Democrat …. vote for a Constitutional Conservative…
and elect candidates who really will balance the budget – now.
I’m feeling dopey today… If the minimum wage issue is just a diversion, how are the proposed ~ I.R.S. scandals, Benghazi murders, “Fast & Furious” gun scandal, making appointments while Congress in session, the list goes on and on… ~ not also diversions?
Fortunately, studies show that the average Yucalandia reader can hold more than just one thought at-a-time in their heads. Further studies have shown that Yucalandia readers can even consider multiple ideas at the same time.
Glad at least someone is paying attention,
steve
ps: Is your RFC legit?
Post Script: ” … women´s rights and all the other nonsense is just diversions…”
Women’s rights are yet more nonsense, and just another diversion, eh?
I plan to continue getting some from time to time, so, I refuse to comment on that one.
Ever Sanguine,
steve
I am kinda tired of the Walmart bashing but I do get the point.
BUT, maybe an even better solution would be to provide basic benefits to all workers like Mexico does…
Hi Peter,
I think Mr. Unz uses Walmart as a tangible real-world example of how the $12 minimum wage would actually work versus the hypothetical, ethereal, theoretical hand-waving offered by some. ???
If the author had raised the issues of the Walton family piling up $20 billion in their family fortune, as their average worker is on welfare, then it could be considered Walmart bashing.
If the author had raised the issue of how if Walmart took $2 billion of their $16 billion of annual profits, and instead used it to pay their workers to get off welfare, public assistance, and public health care ~ our government deficits would be lower ~ then that might be considered Walmart bashing.
Pointing out how Walmart and other big US employers shift their costs to state, local, and federal governments through receiving corporate welfare spending from US taxpayers, is just reporting a fiscal reality.
steve
Nice post Steve.
To put an end to corporate welfare would eat into our nation’s corporate cash stash of over a trillion dollars sitting doing nothing. Can’t have that. I always liked Keynes’ tongue in cheek statement that government would be better taxing the wealthy and throwing the resulting money out of an airplane than letting them hoard its use.
My brother was always against long term unemployment payments to blue collar workers. He said it made it too easy to lay-off workers with the assurance that they would be there when things improved. He and I were steel men, it took at least a decade to learn the in and out of making quality steel: the economic cycle is never that long.
And as to the minimum wage: $12-$13 an hour is still less per hour in buying terms than what it was when I joined the work force in the 70s There is nothing radical in what you wrote, nothing at all.
Hi Norm,
With the buying power of the current minimum minimum wage at all-time historical lows, and with 40% of American workers being paid less than the 1968 full-time minimum wage (inflation adjusted), it does seem to be time to stop moving money from taxpayers to big corporations.
End trickle-up?
steve
I about starved to death under Reagan’s trickle down plan. I remember being laid off from three different jobs at once under his grand economic ideas.
Norm, Reagan gutted my GI Bill benefits which contributed to me dropping out of a grad program. I had no interest in going into debt to get a degree which might enable me to teach at college, or more likely might result in me driving a cab. Republicans in office seem so stingy. They always seem to take care of the rich at the expense of regular folks.
We’ve got all these college kids with debt, but no jobs. There may be some merit in a guaranteed basic income, such as the Swiss are proposing by referendum. A few years ago that nation tried a drug user registration to offset crime and addiction. People are able to register with the state to receive the drug of their choice for free. Surprise. Incarceration costs and crime plummeted. The nation adopted this program after a trial period. (Of course the corrections officers union doesn’t like it.)
Here’s a discussion of the guaranteed basic income between Milton Friedman and Wm F Buckley:
http://www.theatlantic.com/politics/archive/2013/11/icons-of-the-right-debate-a-guaranteed-minimum-income/281669/
Eric: I think the basic problem I have with the Republican party is their adherence to dogma paid for in think tanks funded by ultra rich individuals who are more than willing to feed koolaid to good people of a basic conservative nature who maybe don’t realty understand that the koolaid might not be good for their health and welfare. If the leadership of the Republican party would stand up to their paymasters, their funding sources for election campaigns and say, no that policy you want is bad for our nation, maybe I would consider giving them my vote-I’m not real happy with the Democrats. We have two choices in the US-who makes the better koolaid?
Good one, Norm – about which party makes better k00laid. When the crash came, and those R’s who where such loud proponents of “the invisible hand” of the marketplace stretched out that hand for a bailout from Washington, we should have recognized that all of the preaching was bunk. But many haven’t examined their faith because, if they did, they would have to vote for the Justice Party, or some such. Republicans are masterful at pushing people’s buttons. Democrats are masters of throwing money at problems. And third parties rarely win elections. But some day I have faith that we will wake up and stop voting for the least worst candidate. Door # 3 beckons.
I’m afraid we are stuck with the two current players, a conservative party and a liberal party, our Federal system is set up for just two. The names have changed over the years, the Whigs were an out growth of the Federalist party and they in turn became the current Republican party but the were all the American conservative party. It is not as simple as I portray as both of our nation’s parties have had liberal and conservative platforms in some form in their past years. They have always been at odds over policy. We have had many third parties but they have tended to be issue parties instead of philosophy parties and have always died when our nation resolved the issue. A third party is not the answer anymore today than it was in the days of the Bull Moose, the answer is reform within the two parties and that will take roll around on the floor type infighting of the most ear biting, groin kicking nature that one can think of but it has to happen. My advice on voting is to pick the meanest one who fits your politics, he/she will make the changes. O was a mistake, Bill’s wife is and was a lot meaner…
Delightful perspectives!
Hey, Pete, the corporate criminals out there are broader than the retail sector’s gorilla, Walmart. One-third of bank tellers are said to need some form of government aid, including SNAP (ex-food stamps), for their families to survive. (See: http://www.cbsnews.com/news/one-third-of-bank-tellers-rely-on-public-assistance/ .)
As for Norm’s optimistic look for “reform” within the two existing political oligarchies in the USA, there is no chance of it happening as long as 1) private money rules nominations and elections, and 2) the “average” American, including those struggling to keep their ship above water, do not really care about those economically beneath them or at their own level, as they try to identify with those at the peak of the pyramid. There are those in the USA who believe that the current Pope is drawing his inspirations for social justice from Karl Marx rather than from his actual source, namely the Good Book!
…US Taxpayers spend $899 million annually in state and federal benefits to support underpaid bank tellers and their families…
I am an optimist by my nature, guilty as charged and I believe that our political parties will change as much or more than they have in the past, I pray with less violence than the 1860s. The new Pope is a good start, a policy leader who has a foot in both American political parties, a man with a mandate, so to speak. The court decision holding that Corporations have the same rights to free speech as people will be viewed as something akin to Dread Scott in our life times, it was a political decision with little basis in constitutional law and time will prove this out.
Many of us have family that are in a dire struggle to survive, we see it everyday, I for one have never bought into the dog and pony show that high minimum wages cost jobs. I do not think people hire any more people than they need, they hire the number of workers needed to get the job done and no more; Steve’s policy is correct for our current economic climate.