In a recent report, it was found that most recipients of welfare have jobs. But those jobs just don’t pay enough for people to survive:
The study found that 56% of federal and state dollars spent between 2009 and 2011 on welfare programs — including Medicaid, food stamps and the Earned Income Tax Credit — flowed to working families and individuals with jobs. In some industries, about half the workforce relies on welfare.
“When companies pay too little for workers to provide for their families, workers rely on public assistance programs to meet their basic needs,” said Ken Jacobs, chairman of the university’s Center for Labor Research and Education and one of the report’s authors.
So, of course, people are lobbying against the companies that provide low-income jobs for less-than-qualified individuals. This is the wrong tactic. It’s actually entirely backwards.
The civil government collected almost $19,000 per person (man, woman, and child) in 2014. That’s more than most low-wage earners get paid in a year. And the civil government also determines how much a low-wage earner’s money is worth. The civil government is responsible for making it impossible to live on a low wage.
Think about it. Sales tax, property tax, and inflation are regressive. They affect low-wage earners to a much greater degree than they affect the rich. Increasing the minimum wage by force will not make this better. It will make it worse. Food, housing, and clothing costs will simply increase in order to cover the extra wages.
One of the central ideas behind major minimum wage increases is that big companies are making exorbitant profits but aren’t sharing those profits with the low-wage workers who make that profit possible. But that idea is misguided. Let’s look at McDonald’s. In 2014, McDonald’s had a net income (income after expenses, also known as profit) of $4.76 billion worldwide. They employ 1.7 million people. Let’s say they were to take their entire profit and distribute it evenly to all of their employees. It would equal about $2,800 per person for 2014. That seems like a good bit, but it really isn’t that much.
If we look at what that would mean hourly, let’s assume every worker has thirty hours a week, 48 weeks a year. If those hours are reasonable, that means McDonald’s could give each of them about a $2/hour raise if it were to liquidate all of its profits. Every single cent. The average McDonald’s employee makes a little over $8 an hour. Two more dollars an hour is a decent raise, but it’s nowhere near the $15/hour that workers are calling for.
And, it’s important to remember that McDonald’s couldn’t possibly distribute all of its profits to its employees anyway. McDonald’s can employ people only because it is at all profitable to investors. If it ceased to be profitable, it would cease to have available jobs. By targeting McDonald’s as the source of low-wage woes, activists are completely overlooking the real culprit. In this case, they are actually enlisting the real culprit to help them further victimize their employer, and themselves. Sheesh.
Let’s put this blame where it needs to be: on the tyrannical and wasteful civil government. Anyone could live off a low-wage income if the cost of living weren’t artificially elevated by regulations, inflation, and taxes. Isn’t that obvious by now? Just because you don’t pay for taxes and debt directly doesn’t mean you aren’t paying for it indirectly. The civil government wastes most of your money. The minimum wage increase the people are looking for is hidden in government waste. It’s that simple.