Subsidizing the CEOs

There are many things wrong with the US these days, but one of the most serious social problems is the inability of millions of workers to earn an adequate living working full time. In the richest country in history, they are not paid for the true value of their labor. There is much discussion of minimum wage, with the federal government talking about raising it from $7.25 to $10.25 or so. If minimum wage had kept pace with productivity it would be $22 an hour.

Big corporations like Walmart and MacDonald’s pay so poorly that workers routinely apply for and receive federal assistance as a matter of necessity. Our taxes provide the difference between what they earn and what they need to earn in order to survive. In so doing, taxpayers in effect subsidize the multi-million-dollar incomes of these corporations’ executives. Frankly, I’m not happy that my taxes pay for executive pay, and the experience of Costco and several others shows that it is not necessary to pay inadequate wages to have a healthy company. It is perfectly possible to pay workers a decent wage and provide good benefits, as well as paying handsome salaries to executives. Handsome, not obscene.

Workers routinely receive federal assistance.
This tax money subsidizes executive salaries.

Minimum wage should be set at a level high enough to disqualify a full time worker from receiving public assistance. This would end corporate freeloading on tax money to pay executives. The effect on the national budget and the economy in general would be positive, and I doubt that a single executive would come remotely close to actual suffering because of possible reduction of income. Neither corporations nor cities that provide decent pay have suffered because of it.

The problem for the calculation of an optimal minimum wage is that Federal poverty levels are unrealistic. The 2014 level for a family of two is $15,730 per year, or $1,311 per month. That comes out to $7.56 an hour, only slightly above the current federal minimum wage of $7.25. 

Consider rent alone. The current national median rent is $766. At that rate, our minimum wage worker would spend 58% of her income on rent, leaving $545 for all other expenses, including food, clothing, heat and utilities, transportation, and health care for two people. Obviously this will not work, and that doesn’t even count higher costs in urban areas, where rent is more typically $2,000 or more for a small apartment. Workers at common jobs in US cities are having a hard time living where they work.

Minimum wage should
disqualify a full time worker
from receiving public assistance.

The result is that the calculations for federal assistance allow virtually all workers in the giant cheapskate corporations to qualify for assistance from tax money, thus subsidizing the executives. Is there any question why corporate executives are against it?

The other cute trick that cheap-o corporations have utilized for many decades is to never allow a worker enough hours that they would be required to provide decent benefits like health care insurance. This not only prevents workers from receiving essential benefits they deserve, putting their very lives in jeopardy, but it also reduces their earnings to a point where they must have two or even three part-time jobs just to get by. And none of them provide health care. Obviously, this is morally repugnant, a calculated and cynical denial of the right of workers to a decent life.

The other cheap-o trick
is to never allow a worker
enough hours to get benefits.

A blanket law requiring that part-time work be only temporary would have the desirable effect of making involuntary part-timers into full-timers. The difficulty is that some workers want or need to work part-time for various legitimate reasons. The answer is to make health care insurance mandatory for all workers. Hell, if Starbuck’s can do it, anyone can do it.

Big corporations employ whole squadrons of lawyers whose duty it is to avoid satisfying the spirit of laws designed to be beneficial to workers, and congressional Republicans and their corporate masters work relentlessly to weaken or repeal good laws that are already in place.

It always comes back to the question of the purpose of government. Is it to provide for the welfare of the citizens, or is it to make the rich always richer?

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One CommentLeave a comment

  1. Reblogged this on Citizens, not serfs.

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