Living Wage.
This seems to be the new socialist bugaboo. I do call it socialist, even though its implementation may be more fascist in appearance. I have said this before: Fascism and Communism are two fingers on the same hand of Socialism, though one may be purer than the other. In the former, the government controls the people through the companies, while in the latter, the government forbids the companies and controls the people directly. There is very little difference; in Fascism, the government forbears the existence of the companies for the time being, while in a free market economy, the government is limited in the ways that it is allowed to control them.
Economics lesson aside, let's break into the actual thought. The usual suspects are now calling for a government-enforced "living wage", the ability of any job to support a spouse and family. They like to claim that this was quite possible and expected back "before all this deregulation", as if the 1950's may as well have been lived under the hammer and sickle or something. Frankly, I'm pretty sure they don't know what they're talking about. But let's take a moment and ask the question: Why are so many jobs no longer offering "a living wage"? There are a few reasons that we can note before stepping into this one. In the 1950's, a "living wage" supported a smaller home with fewer amenities, fewer electronic devices with monthly plans, fewer restaurant meals, and smaller wardrobes. If you were to study the time period and attempt to live only with the amount of stuff and amenities that they had, eating what they ate and owning the clothing that they owned, you might find that a minimum wage job would in fact provide your needs. But let's set that, also, aside for a moment and ask this question:
Are corporations not offering a "living wage" because they are already subsidizing it via government fiat?
A worker costs an employer a great deal. Government-required taxes and benefits alone may increase the cost of an employee a minimum of 25% and maximum (more common in larger businesses, which have additional mandates that small businesses do not) of 40% above the employee's base salary. Many of these 'benefits', like 'health insurance' (itself becoming increasingly expensive and useless), would have been paid by the worker back in the days of the Living Wage.
On the other side, we have corporate and personal income taxes. Why did I say "corporate and personal"? Many companies nowadays are taking advantage of the S-Corp filing status, and filing as if they are persons. That lowers the bewildering complexity of the process and may lower the tax rate. On the other hand, someone who makes $35K/year may be paying taxes on his company's $120K/year profits instead. When we talk about government income from employers, we need to include them. All in all, the top 1% of income earners pay nearly half of personal income taxes, the top 20% pay 85% (the bottom 60% pay 2%), and many, perhaps even most, of those are S-Corps rather than individuals like Elon Musk or Bill Gates. The average S-Corp tax rate is 31%, with a range of 19-35%. (Note: That information is pre-Trump and so is at least slightly out-of-date. But hopefully it gets some thoughts stirring.)
Including all Federal spending, over half goes to social welfare programs, and state spending further adds to the bundle. A cursory look 'round state budget pie charts shows that welfare spending seems to run about the 20-40% range in general. Where am I going with this?
The average low-paying job is indeed already paying a Living Wage.
How can this be? Well, in the 1950's, he would do it by giving you a paycheck with which you could purchase all that you need. Nowadays, he does it the same way the government does for nonworking families. He pays for your health insurance, pays for a fair bit of your tax burden (did you know he pays half your Social Security tax? Try to work for yourself and you'll quickly find that out!), and pays the government to give you food stamps, heating assistance, rent assistance, free school lunches for your children, possibly free medical care for your children as well (CHIP/SCHIP), and, as your salary, a small cash allowance with which to obtain that which he and the government through his taxes have not provided.
Indeed, we see that this provision is sufficient, as there are workers in California under an increased minimum wage who have asked for fewer hours in order to preserve the same Living Wage.
Now's the part where everyone starts accusing me of saying that the poor have it easy, that they are freeloaders, that I don't care if babies starve, yadda yadda. Let's see who can continue to keep an open mind and listen to what I have to say about that. This is not by any means an ideal situation, and the poor do struggle. The reason they struggle, however, is not due to lack of funding. It is because the method of that funding is almost the least efficient and least effective manner possible. I say "almost" only because full-on Communism exists in the world, and it is by far the least useful way to handle wealth.
Raising children has helped me to remember and think about what it was like to be a child. People look back to that time period fondly, thinking of it as being idyllic, because "the world was less complicated and more safe". Indeed, when an adult controls your life, you have less responsibility and you don't have to worry as much about the dangers that still surround you. You still have a chance of being hungry, of being homeless, but in that event the adult will tell you what to do. What people forget is the loss of freedom. Sure, there's a measure of it if you live in a suburban area and own a bicycle. Other than that, though... You still have to ask if you can go to a friend's house. You have to ask if you want to visit a museum. You have to accept the food they give you; your parents determine your diet. You are severely restricted in how you can earn income and how much money you will have. And, of course, your school takes up much more of your life than you would have ever remembered; your precious memories of freedom and fun were most likely snipped out of a plethora of weekends and holidays (the parts that don't involve mandatory visits and customs) and stitched together out of a pair of decades.
Well, the current method of providing a Living Wage is much like being a child. Someone else controls how often/much your house receives to heat, how much you spend on food, which doctors you see, and what your child eats for lunch every school day. This is great, if you live the exact lifestyle that these social programs were optimized for. The problem is that it does narrow you down into a specific form of lifestyle; a purely cash form of a Living Wage allows you to spend more on your housing and less on your cell phone, or more on your clothing and less on your groceries. It can be very, very frustrating to need money for one budget category and be blocked by the Government from simply doing what the middle class takes for granted and transferring it from another category.
What is the answer?
The obvious answer to me is to reduce and reform the welfare system, and with it the tax system. Every reduction in welfare spending must be paired with an equal reduction in employer taxes. I was hesitant to suggest this before, because there must be a time period, I thought, in which wages were still low and people would be hurting. However, the quick responses of businesses in handing out bonuses as they began to raise wages after Trump's tax cut surprised and emboldened me in saying this: As they spend less on the employees through the government, they will spend more on the employees through regular wages.
On top of that, market competition will come into play, this time with a strong emphasis on employee demands rather than employer offers. When you can get a job as a cashier at Walmart and have the government spend tens of thousands of dollars on welfare to make up your Living Wage, you will not have to insist that your employer pays you that wage or you will fight for one of the jobs that pays it. The employment market is indeed a market with customers and 'sellers', and companies that do not offer that wage will have difficult finding people qualified to do the work.
If we do this, I think we will find that the effect of "wages not rising with national wealth", an argument that Liberals tend to use to try to justify actions that depress wages further, will correct itself, and workers will receive their Living Wage as cash instead of an unholy mixture of cash, government-mandated employer spending, and government-mandated welfare spending.
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