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October 23, 2014


David Cooper, economic policy analyst with the Economic Policy Institute, has published a report as of October 16, 2014, in which he dissects the numbers and shows how we can save billions of tax dollars with enactment of the proposed federal minimum wage increase to $10.10 an hour. I personally think it should be increased to $12 an hour and indexed for inflation so we can save more, not raised in increments, and applicable to all workers, including wait staff and teen-age burger flippers – but I will take what I can get. In all events, it is long past time for an end to taxpayer payment of wages on behalf of multinational corporations worth billions of dollars with ample resources to pay a living wage to their employees. These are the same people who sing the praises of “free enterprise” propaganda for public perception while dining at the trough of corporate welfare we taxpayers fund for them.

I have written before about how Wal-Mart’s shameful and poverty-matching wage scale brings forth claims from their employees for food stamps and other social services payments from the rest of us in order to keep body and soul together (and profit margins intact to Sam Walton’s heirs and others). To recap, this bizarre transfer of tax monies to Wal-Mart’s underpaid employees is nothing more than an outright subsidy to Wal-Mart pure and simple. We the taxpayers are essentially paying for Wal-Mart’s self-exemption from paying its employees a living wage. We are rewarding the company by our largesse, guaranteeing it a profit and approving its payment of slave labor wages to its employees when if anybody in this sorry equation needs welfare, it is Wal-Mart’s employees, not Wal-Mart.

There is no clearer example of corporate welfare than this, and to a company with the biggest number of employees in America (1.3 million) which publicly champions “free enterprise,” “free trade” and other such fantasies, our tax giveaway to its underpaid employees runs into billions annually. Thus, and contrary to appearances, when all costs are factored into Wal-Mart’s seemingly low prices, their goods are far more expensive than those in dollar stores and may be as expensive as those in mom and pop stores as well. There is no free lunch, and there are no free or even cheap toys from Wal-Mart when all corporate welfare and trade deficit costs are factored into its pricing regime.

Even taxpayers who boycott Wal-Mart (and I am one of them) are helping pay Wal-Mart’s employees with their tax money, and I, for one, strenuously object. I object not to the payment of such social costs per se to Wal-Mart’s underpaid and poverty-stricken employees; I object to paying costs of its business that Wal-Mart should be paying.

Wal-Mart’s greed in gaming the system is breathtaking and we taxpayers (along with their employees) are the victims. Twelve dollars an hour would help remedy this travesty both for Wal-Mart’s employees and us taxpayers as well, and that is twelve dollars an hour effective today and not spread out over three years as contemplated in pending legislation. Why not stop Wal-Mart’s gravy train and our billions of dollars down the drain immediately? Why honor momentum? Why not stop the financial bloodletting of taxpayers ASAP? We need a tourniquet, not managed care.

Cooper’s research fleshes out what it is costing us not to have a minimum wage increase. He notes that we have not had a raise in the federal minimum wage of $7.25 in over five years, and that during that time price inflation has reduced that wage value by nearly ten percent, noting further that the value of the federal minimum wage has been raised so inadequately and so infrequently since the late 1960s that today’s minimum wage workers are making twenty-five percent less than they were 45 years ago.

Other than the increase in poverty that comes with advancing price inflation for minimum wage workers caused by our failure to increase the minimum wage in timely fashion, such failure also causes wage stagnation at the bottom of wage distribution, which in turn drops such workers below the poverty line.

If dumping more working families into poverty and subsidizing the wages of huge corporations can be called “policy,” then what’s next? Shall we adopt as policy further corporate welfare in the form of taxpayer-funded bonuses for the CEO and executives of, for instance,  Apple (whose gadgetry is assembled by what amounts to slave labor in Southeast Asia and whose accounting is spread out over tax free venues to beat its tax liability owed to our country)?

When does corporate America step up to do its part in what we used to call the “social contract,” like paying taxes and employing American labor? When does corporate America pay its fair share of the tax load so that our country can balance its budget, reduce its debt and move forward to a more prosperous destiny for all and not just a few of us? Ever?

I will write more on the specifics of Cooper’s findings and how we can save billions of dollars in taxpayer monies while simultaneously either removing minimum wage workers from poverty levels or preventing them from falling into the poverty trap in Part II of this essay. Stay tuned.   GERALD   E


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