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WAL-MART, TRICKLE DOWN AND MINIMUM WAGES

May 22, 2013

WAL-MART, TRICKLE DOWN AND MINIMUM WAGES

Corporate welfare is roundabout in its effect. The “always” cheaper prices one pays at Wal-Mart are not cheaper when you add up all the costs leading to pricing of the company’s goods and services offered for sale. The company’s refusal to pay a decent wage to its employees is well-known; what is not well-known is that patrons and the rest of us are (involuntarily) paying taxes to fund Wal-Mart’s underpaid employees’ attempts to escape from poverty.

Jordan Weissmann (The Atlantic.com) wrote late last year that “We all end up bearing the costs of big-box retail’s refusal to pay a decent wage. Chains like Wal-Mart and Best Buy pay so little – around $9 or $10 an hour – that their employees wind up disproportionately reliant on safety net programs like food stamps and Medicaid.” Guess who pays for food stamps and Medicaid? Look in the mirror; the price of that gadget you bought at Wal-Mart just went up. The sticker price you paid was not the real price you paid. Perhaps you should have bought your gadget at a store where enlightened management pays a living wage to its employees – the gadget might have been cheaper since such employees would not be on the dole – a dole you have no choice but to help fund, whether you shop Wal-Mart or not.

Weissmann continues: “Just to clear $19,090, the federal poverty line for a family of three, you’d have to work at Best Buy for forty hours a week, every week of the year, and it doesn’t have to be that way. These retailers could choose to pay a living wage with minimal impact on their bottom lines and the prices their customers pay. If workers were paid $25,000 a year, with half the cost passed on to consumers, the average big-box shopper would pay just $17.73 extra a year. I think most customers would gladly pay a bit more to know the person helping them find the detergent aisle doesn’t need help from the government to feed their child.”

Weissmann offers one alternative. There are others, like a substantial increase in the minimum wage. Perhaps surprisingly, an increase in the minimum wage (in addition to stimulating aggregate demand and thus reducing unemployment) might save us money. If Wal-Mart and other such wage earners had more money in their pockets, they would not be spending our tax money for food stamps and Medicaid. We are going to pay the final costs of the inequality of such slave wage regimens one way or another – take your choice.

But know this – with such economic trickle-down tactics in full view, we are seeing the consequences in broad daylight. We are seeing systemic impoverishment of the working class, and are ourselves paying for the pleasure out of a different pocket. Another result (Wall Street and Republicans call it “class envy”) is that the Wal-Mart heirs have more wealth among themselves than the bottom 100 MILLION Americans have.

Speaking of “roundabout,” why should you and I be called upon to finance their further acquisition of wealth on the backs of their underpaid employees by paying for their employees’ food and medical care? While I believe in both programs, Wal-Mart and others are directly responsible for the poverty status of their employees and should pay living wages instead of crediting the difference between poverty and non-poverty wages to the Wal-Mart heirs’ accounts in Switzerland, the Caymans or some other such tax-dodging venue while the rest of us pick up the tab for their employees’ food and medical care? “Always low prices?” Think again. In the real world such a slogan verges on false advertising.

The food stamp and Medicaid programs were designed to help the poor and sick, not serve as corporate welfare as additions to Swiss bank accounts. Not a big deal, you say? Wal-Mart is the biggest employer in the United States with 1.4 million employees. That is a big deal in my view, especially when you consider that many retail and other employers (other than just Best Buy) are emulating the Wal-Mart example and that millions of other such impoverished employees are involved as well, many if not all of whom must apply for food stamps and Medicaid, programs for which you and I pay.

So what is the final cost of the gadget you bought at Wal-Mart? I don’t know, but with billions of dollars you and I spend to keep big-box retailers’ employees’ bodies and souls together (while juicing up their corporate welfare accordingly), it certainly is not the cost the sticker suggests.

It is bad enough to have to put up with a systemic cycle of impoverishment of working Americans without having to fund it as well while watching the “trickle downers” stuff their pockets with our largesse, but it does help explain why these two federal programs have avoided large budget cuts by Republicans, even when they had legislative majorities and Republican presidents in office.

Do the math. The federal programs (in the sickest and most perverse fashion) by the billions are winding up in the coffers of the already rich and corporate class, a favorite donor group of the GOP. Their employees, sick and hungry, go to food stamps and Medicaid, you and I pay the bill, and Wal-Mart and others stuff the difference into their pockets by avoiding costs they should be paying with decent wages, going merrily on their way complaining  about “big government” while extolling the virtues of the “free market.” (As I often blog, “free for whom?”)

We can solve this problem with a one sentence amendment to the statute, stating a new federal minimum wage, one that takes poverty out of the picture.

Expect friction (fierce lobbying) in such a case from the heirs. How dare “big government” turn so dictatorial and those socialists be so opposed to private enterprise? Answer: Funny. Socialism if just fine when you are mining corporate welfare from the public coffers, but not when working people are trying to escape an eternity of poverty at the expense of the rest of us. Talk to me about consistency, Mr. Lobbyist.

“Always?” An intact social contract between equals? Not a chance. We are being had both in and out of the store in ways seen and unseen, known and unknown, and doing nothing about it.

It is time to end this greedy nonsense, so let’s get on with it.  GERALD  E

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