How do you reform the federal government? Anyone remember Al Gore and Bill Clinton trying to reduce the footprint of federal agencies through Reinventing Government? Peter Drucker liked the effort but knew it was going to fail:
The first reaction in a situation of disarray is always to do what Vice President Gore and his associates are now doing–patching. It always fails. The next step is to rush into downsizing. Management picks up a meat-ax and lays about itself indiscriminately. This is what the Republicans and (as of last December) President Clinton now promise. In the past fifteen years one big American company after another has done this–among them IBM, Sears, and GM. Each first announced that laying off 10,000 or 20,000 or even 50,000 people would lead to an immediate turnaround. A year later there had, of course, been no turnaround, and the company laid off another 10,000 or 20,000 or 50,000–again without results. In many if not most cases, downsizing has turned out to be something that surgeons for centuries have warned against: “amputation before diagnosis.” The result is always a casualty.
But there have been a few organizations–some large companies (GE, for instance) and a few large hospitals (Beth Israel in Boston, for instance)–that, without fanfare, did turn themselves around, by rethinking themselves. They did not start out by downsizing. In fact, they knew that the way to get control of costs is not to start by reducing expenditures but to identify the activities that are productive, that should be strengthened, promoted, and expanded. Every agency, every policy, every program, every activity, should be confronted with these questions: “What is your mission?” “Is it still the right mission?” “Is it still worth doing?” “If we were not already doing this, would we now go into it?” This questioning has been done often enough in all kinds of organizations–businesses, hospitals, churches, and even local governments–that we know it works.
Does Pope Francis need Mr. Drucker?
The news that the Vatican has suspended an external audit might appear to be only a minor administrative matter, interesting only to accountants. But as an indicator of the trends in Rome today, it is as significant of Amoris Laetitia. It is, in my view (and I am by no means a financial analyst!), a sign of crisis in this pontificate.
Pope Francis was elected by the College of Cardinals to bring reform to the Vatican, after the “Vatileaks” scandal and revelations of financial corruption had marred the pontificate of Benedict XVI. Three years later, the “Vatileaks II” trial is providing new drama fit for the tabloids, and the most critical step in a sweeping plan for financial reform has been put on hold. Has anything really changed?
There has been no explanation for the decision to suspend the audit by PricewaterhouseCoopers, which was to have been the first external audit ever conducted of Vatican financial affairs. For that matter there has not been any official announcement of the decision, which only came to light when the National Catholic Register reported on a memorandum issued to offices of the Roman Curia by the Secretariat of State. Even Cardinal George Pell, who is (at least theoretically) the Vatican’s top official for financial matters, told the Register that he was “a bit surprised” by the decision.
This is the way the Vatican has worked for ages—and, apparently, the way it still works. A vitally important decision is made quietly: without public announcement, without explanation, without accountability. The Secretariat of State, which supervises the work of all other agencies, countermands an order from other Vatican offices, even if those offices have (on paper) the proper authority in their own particular spheres. . . .
For generations, the top officials of the Curia have answered to no one but the Pope– and even the Sovereign Pontiff, respecting their dignity as Princes of the Church, would rarely ask detailed questions about how they handled their work. Each Vatican office operated by its own rules. So when Cardinal Pell finally conducted a systemic review of Vatican finances, he uncovered a rat’s nest of unsupervised fundraising and spending, separate accounts, no-bid contracts, undervalued properties, and sweetheart deals: the sort of routine corruption that saps the strength of an institution. He prescribed strong medicine, and not surprisingly, some of the patients resisted the treatment.
So now the treatment has been suspended. The old guard has won at least a partial victory; the impetus for Vatican reform has been stalled.
All that social teaching and subsidiarity. Maybe some ecclesial teaching is in order.
106 thoughts on “Downsizing Government”
On a roll. Also, from Drucker, you can’t turn around a loser(loss center) you can only kill it. Any attempt to reform it will merely result in passing the inefficiencies and costs to another department. Now, if Drucker had just steered clear of evangelicalism.
The trouble with downsizing s what is assumed with it; that smaller government is better than bigger government. For it is one thing to eliminate parts of a business or government because of need or the inability to produce, it is another to assume that the net effect of cutting and adding to the government will be negative and thus a smaller gov’t.
So we can’t mindlessly downsize government. But how big does gov’t need to be? Doesn’t that depend on the size of those entities that threaten us? If the threat is external, we of think of having a big enough military to meet foreign challenges–though the size of our military is set for the needs of our empire rather than for defense.
But what if the threat is internal either by private sector organizations or conditions, such as the failure or vulnerabliity of one or more sectors of our economy? Doesn’t our gov’t need to be big enough to handle the worse threat? And so the necessary size of our gov’t should be determined by both internal and external threats, not a mantra forever calling for a smaller government.
Finally, it isn’t government’s size that gets the rest of us in trouble. Here, government is like love in that size doesn’t matter, fidelity does. An unfaithful, small government is a greater threat to its people than a large faithful government.
Curt, government is there to protect you? What’s wrong with taking responsibility for your own affairs?
Ok, so the next time Islamist terrorists attack our land or when corporations exploit me, I will take matters into my own hands. That is the Christian answer from the one who believes that the Church should support any particular political point of view?
Curt, describe this corporate exploitation of your person.
Curt, the problem is that a terrorist attack is easy to see, but the way the left flabbily uses “exploit”, I’m not going to concede the equivalence.
CW, the software corporation that gives Curt access to the Internet is exploiting him.
Who’s exploited more — Curt or the Chinese workers who assembled his electronical devices? Boycott!
The world screams “Kiss Me, Sun of God” to the big bad corporations.
So there is no expolitation in sweatshop labor, poverty wages where workers must also live on gov’t assistance to survive and destruction of the environment are not valid cases of exploitation?
There can be exploitation in any realm – even socialist utopias – so we have to be careful with broad brushes. Sweatshop labor does not necessitate exploitation and some consider it a necessary step along the path to economic development:
Click to access egl_36.pdf
nor does a corporation’s prosperity necessitate destruction of the environment.
As to “poverty wages”, I’m sure you’re also familiar with arguments against minimum wage laws and the government’s mandate regarding that actually contributes to, rather than alleviates, poverty.
Clete, I hate to foster any sort of solidarity with you or the chinese, but it reminds me of the reporter questioning the working conditions of the Congolese(maybe Kenyan) working for a Chinese smelting company and the Congolese official/foreman/super looking at the white westerner and responding(paraphrase-you had to see the expression on his face), “you understand this is a third world country?”
Yeah we prolly need the government to make sure everyone has air conditioning and isn’t allowed to work for less money than Curt says is okay or before they hit puberty. Cause kids are much better off spending their time in public schools than learning a marketable skill.
Curt, but I thought we were all exploited by the 1 %.
I only gave a partial list, but its length was not the issue. You stated that the Left ‘flabbily’ uses exploit. So tell me from the partial list, what exploitation there was not real exploitation and then we can get on to the 1%
Curt, the flabbiness is right there in your list. Code: “sweatshop”; code: “poverty wages.”
This isn’t an open question for you. Flabbily intolerant.
“poverty wages where workers must also live on gov’t assistance to survive”
No. This is not exploitation. The wages should be based on the value of the labor performed, not on the needs of the laborer. The state has an interest in ensuring the welfare of her citizens, so if someone lacks the skill to produce sufficiently valuable labor – there is a place for government support.
A far more effective means of doing this is via wage subsidies rather than by regulations that artificially inflate wages. The real minimum wage is always zero. As we see the push to greater automation, exorbitant wage mandates ($15/hr minimum wage?) will cause jobs to dry up – we already have increasing self-checkout at supermarkets, fast-food restaurants are experimenting with self-serve meals as well as drink fountains, AI is replacing human customer support in everything from IT help to travel agencies. When was the last time you saw even an option for full service at a gas station (outside of NJ and OR anyway)? It is fine to sneer at these jobs – particularly when they are dominated by minors looking to earn a few extra bucks in gas money, but they also provide a valuable first step in getting (back) into the workforce.
So no, wages too low to live on that leave a worker dependent on gov’t assistance to make ends meet is not exploitive – it is entirely just. Wreaking havoc on the job market via excessive regulation, high benefit burdens, and wage mandates is unjust. What we see is that the labor force participation rate by men aged 25-64 (i.e., excluding those in school and eligible to retire) has dropped from about 95% in 1948 to about 85% today. That’s striking. Of course, the labor force participation rate of women has increased dramatically until about 1990 when it leveled off. What I find curious is the drop in the overall labor force participation rate by working age men and women from 2008-2016. It is only 3points or so, but those pts are a lot of able bodied people not working.
A lot of people like to assign the blame to trade, but I don’t think that works. The LFPR stayed pretty flat post-NAFTA (~80% overall) – we don’t see a sustained drop until about 2008 or so, and there is no sign of it turning around. That is curious isn’t it? Perhaps some of it is older people staying in the job market longer due to the lousy state of their retirement portfolio (the over 65 crowd seems to be increasing the LFPR!), but another significant contribution is the increased compensation cost for employees resulting in slower growth, less capital investment, and increased incentives to automate.
But naive buzzwords about labor exploitation from folks like you increase misery when politicians put them in practice. The dramatic drop in worldwide poverty has largely been driven by the adoption of neoliberal-capitalism. The acceleration of that drop in ~1980 was largely the result of the demise of marxism as a significant force in the political economy of nations. As nations have rejected socialism, the world has gotten richer, healthier, and happier. Total exploitation…
First, utopias have no exploitation.
Second, I don’t believe that, this side of Christ’s 2nd coming,, there can any utopias.
Third, yes, sweatshop labor is an example of exploitation. Can’t rule out exploitation by the theory of relativity. That theory is jus another balm used to sooth the consciences of those who exploit such labor.
Fourth, you are right in saying that corporations don’t necessitate destruction of the environment. By far too many do as does our way of life here.
Finally, corporations that pay poverty wages are felying on gov’t assistance programs to subsidize their payrolls. And what youshould look at is how such corporations work to avoid paying taxes.
And who is determining the value of the labor? Are you saying that the Free Market is inerrant and thus to embrace the Free Market is to grab on to a piece of utopia? Do you realize where you are putting your faith? And, btw, who is paying for those subsidies when at least some of the same corporations that rely on subsidies to pay their workers do what they can to avoid paying taxes. And the fact that you need subsidies should give us a big enough hint that the Free Market is not working.
Francis effect? Meh:
Francis Effect II: If Pope can’t govern 5,000 staff (federal government has 2.5 million), what’s the big deal?
But there is no free market. There are freer and less-freer markets. We haven’t had a free market in this country since at least WW2, and it actually goes back longer than that.
And businesses don’t pay taxes. Their customers pay their taxes in terms of increased product costs.
Burnouts reeking of patchouli?
Yes. That is exactly what I was saying…or not. Perhaps you would do well to engage the best arguments you oppose rather than straw man construals in the Nation? Markets aren’t perfect and they can certainly be distorted, but they contain a lot of information. This information is the best we have access to, and it does a good job of setting values. Good, not perfect. Freer markets with wage subsidies for workers is a much more efficient way of doing a better job of helping ensure that the widest swath of the populace has a sufficient resources to meet their basic needs.
I’m pretty sure my faith is in Christ alone, but perhaps you know better? I have to say its a pretty rough crowd around here. Evidently, recognizing that it is possible that I could be wrong makes me a post-modern pagan, thinking that lying in attempt to embarrass Planned Parenthood is a bad idea makes me a baby murderer, rejecting the notion that watching an R-rated movie is inherently sinful means I’m just wanting to get off on softporn, and now suggesting that wage mandates are less effective than wage subsidies means I’m a free market idolator. Like I said, a tough crowd. Not a very bright one, but certainly tough.
I’m pretty sure the EITC comes from general revenue. I’m pretty sure all corporations do what they can to avoid paying taxes – I took the mortgage interest deduction and dependent tax credit, so I guess I’m guilty too. Of course, corporations never really pay taxes – those are just another cost that gets passed through and they are terribly inefficient. As far as whether the Free Market is working or not, I think it depends on what you mean by working. If you mean it is not finding the optimal price, I think you’re wrong. If you mean that finding the optimal price is not the end of the story, saying the Free Market is not working is like saying that the theory of evolution isn’t working because it can’t explain the origin of life.
The fact of the matter is that a lot of skills just aren’t sufficiently valuable to demand sufficient remuneration to live off of. My skill at managing a fantasy baseball team maybe tops, but I can’t make a living at it…very unjust to be sure. Sometimes that is OK. A low value skill may not garner much money, but that can be OK for a kid looking for a bit of extra gas money or a student looking for experience. In the real world, a lot of skills are made obsolete and making the transition is really tough. One way to do that is by allowing the wages to shrivel while providing wage subsidies. This isn’t a market failure, it is a way of humanizing the creative destruction of the market. artificially propping up employment sectors by mandating minimum wages is decidedly unhelpful. It sends just as much money to a kid looking for a few extra bucks as it does to a new worker trying to support himself. Things like the EITC fix this. The kid doesn’t get it, the adult does. The employer isn’t biased toward the kid to save money.
We can also help workers by shifting to Pigovian energy taxes and away from payroll taxes. This would make it cheaper to compensate workers and make automation and outsourced labor more expensive (shipping!). This is a place where left and right could collaborate, but evidently emotional attachment to FICA taxes is just too strong I guess. Nostalgia dies hard.
Everybody agrees that there are no Free Markets, there are forced markets. But they are called Free Markets by many and so that is the terminology I use.
Your faith is in the economic system you support. And the kind of system you support says let businesses pay their workers what they will regardless of the value that the workers produce for the businesses. And if the state has interest in preserving their welfare, the state will chip in. Of course, who is the state? That includes us taxpayers and the tax burden has been shifting for a quite a while from corporations and individuals with wealth to the rest of us.
Tell me how biblical it is to demand full time hours from an employee but to only pay him/her poverty wages letting their survival depend on the benevolence or even capability of the state to chip in? Do you understand why people who want social justice have the attitudes they have toward conservative churches? You simply use a man-made machine, the market, to try to cover a multitude of sins by acting like that machine is inerrant.
Your faith is in the economic system you support.
That’s a huge statement. SDB could just as well say your faith is in socialism, not Christ.
And the kind of system you support says let businesses pay their workers what they will regardless of the value that the workers produce for the businesses.
Who determines the value that the workers produce for a business? The business or an elected body of bureaucrats who have never run a business in their life? Have you run a business?
And if the state has interest in preserving their welfare, the state will chip in. Of course, who is the state? That includes us taxpayers and the tax burden has been shifting for a quite a while from corporations and individuals with wealth to the rest of us.
Corporations don’t pay taxes except on paper. Raise taxes on corporations, the price of goods and services goes up, so there’s a wash. Corporate tax burdens are the burdens of the people you are advocating for. In fact, they fall the heaviest on the poorest among us.
But the problem is the complicated tax code, which is a direct result of increasing government intervention in the economy. Get enough money to create a special interest and you can create a tax break where you can hide your money if you can afford the right CPA. Raising tax rates doesn’t solve this. The wealthiest will always have recourse to hide their money. The only solution is to simplify the tax code so that there is less incentive to hide money. And of course, complicated taxes mean that the people you are so concerned about have to spend some of the little money they have trying to max out their gains and deductions.
Tell me how biblical it is to demand full time hours from an employee but to only pay him/her poverty wages letting their survival depend on the benevolence or even capability of the state to chip in?
Who is “demanding” full-time hours? In this country at least, you enter into an agreement with your employer that you are free to terminate at any time. You are off on a leftist diatribe that doesn’t have much in the way of actual economic realities but a whole lot of emotion.
Do you understand why people who want social justice have the attitudes they have toward conservative churches?
Depends on the person who wants justice, what justice means, and the particular conservative church. My conservative church has an active diaconate who has paid mortgage payments for members who have lost jobs, bought vehicles for struggling single mothers, etc. The members are exceedingly generous and help one another in many ways apart from the diaconate. What more does my conservative church need to do?
Social justice? I don’t know how much money you make, but how much of it are you giving to equalize the wages of other employees or others you know. Are you paying more in taxes than you are required. If you make 50K, are you giving 25K to the guy next door who has no income so that you can have a more “just” society?
You simply use a man-made machine, the market, to try to cover a multitude of sins by acting like that machine is inerrant.
How are government minimum wage laws any less manmade or errant? I don’t know what solution you propose, and I’m not trying to be cruel, but it’s real easy to complain about problems and yet offer no solutions privately or publicly.
The market, provided you leave it alone, does what it is supposed to do. It allows employers and employees to bargain with one another for wages and benefits. The highest demand jobs will always command the highest wages. Always. It’ll either happen in the open or under the table. See America for the first and any number of socialist systems for the second. People figure out a way to get around laws. It’s human nature.
Look, I get the concern and I share it. But railing against the free market isn’t doing any good. It’s a system with problems because it’s made up of sinners. But where’s the recognition that those who tend to be the strongest advocates of such systems generally seem to be the most generous. How many times do we hear about liberals who gave very little to charity but conservatives who give vast sums. It’s a generalization to be sure, but every stat I’ve seen point to conservative religious people as being the most generous givers to churches, non-profits, etc.
I have no faith in economic systems. Sorry to disappoint.
Businesses should be able to pay their workers what the business and workers agree to. If the workers want to organize and demand higher wages, they should be able to do that too. If businesses don’t want to pay it, it’s their business (literally!).
Curious. That wouldn’t be because a lot of business are now S-type rather than C-type so that their taxes are counted as individual rather than corporate taxes would it? Now that 2/3rd’s of corporate profits are reported as individual income, one might imagine that this is going to swamp things. So I guess wage earners, capital gain recipients, and S-types are going to fund this. Perhaps we should eliminate corporate taxes altogether?
Very? Mathew 20:1-16? Though my impression is that almost no one making minimum wage is working full time (something like 1%). But such a person would be making $15,000/yr. The income limit for poverty rate is just under $12,000. So a person working full time at minimum wage would be making 25% over the poverty rate. Of course, As far as your rhetoric about survival depending on the benevolence of the state – how is the state mandating a wage minimum different from providing direct wage subsidies? Loaded words like “benevolence” aren’t an argument against wage subsidies like the EITC – expanding that and phasing it out gradually to reduce the marginal hit (making sure every additional dollar earned results in greater total income – which is not now the case unfortunately), could then be used to replace a bevy of social welfare programs that would be much cheaper to administer, encourage work, and make work pay.
I’m pretty sure my support for an expanded EITC instead of higher wage mandates is not why SJWs have the attitudes they do toward conservative churches. Perhaps it might have something to do with an unfortunate legacy of support for segregation in the past and ongoing opposition to SSM today.
I wrote, “Markets aren’t perfect and they can certainly be distorted, but they contain a lot of information. This information is the best we have access to, and it does a good job of setting values. Good, not perfect.” Pretty sure “good, not perfect” is not the same as inerrant.
Of course markets contain information, but that isn’t the point when we are talking about poverty wages, the need for minimum wage, and unfair wages. To simply defend poverty wages by relying on how they are set by the market is to imply that the market is inerrant. But not only can the market be inerrant, it can be unjust. And what determines whether pay is just or unjust is not necessarily detected by the market.
BTW, yes, you have already expressed faith in the market. When you wrote:
The wages should be based on the value of the labor performed, not on the needs of the laborer.
you stated that the market determines what just wages are. BTW, your statement was very shortsighted anyway since determining compensation for work does include what allows the workforce to be replenished. It does that unless workers are disposable objects like any raw material would be.
Also, Matthew 20:1-16 doesn’t address the issue of how justice of paying poverty and letting the state pay the rest since Matthew 20:1-16 doesn’t address the issue of just wages paid by man. Rather, the parable Jesus uses is directed at what the Father regards as fair payment to those who work for Him. There is no impliation from the text that says all wages, regardless of how low, are just. Such a view does not recognize the instrinsic value of man as being made in the image of God.
Finally, relying solely on the EITC to help workers who are not paid enough basically says that taxpayers, not businesses, have total responsibility for providing fair compensation to employees. As you wrote, the minimum wage is $0. Of course, relying solely on the EITC seems to contradict the conservative belief in small government because here government is doing something for people that businesses could or should be doing. What you are advocating is welfare for business in their payment for work. And again, do you understand why SJW and others have the attitudes toward conservative churches that they do? As with the times prior to the French, Russian, and Spanish Revolutions, the Conservative Church is siding with wealth and power–note that power does not equal government aurhotiery. Power is measured by degree of influence even over those with authority.
Yes, your faith is in the market regardless of how much you deny it.
Why don’t you tell us what a just and fair wage is. $15 an hour? $1,000 an hour? What?
As with the times prior to the French, Russian, and Spanish Revolutions, the Conservative Church is siding with wealth and power–note that power does not equal government aurhotiery.
Really? You mean all those evangelicals who are on the side of wealthy liberals who are in the pocket of the Democrats? What are you talking about?
Actually, my faith is not the issue as SDB’s is. SDB’s assumes that the market is always fair in how it pays workers. He continues to say that the taxpayers, represented by the state, are there to pick the slack between what the employer pays and what the employee needs to live. And according to SDB, there are no justice issues in the state’s decision to provide assistance programs to workers being paid poverty wages. The state’s decision to help workers depends on whether it is n the state’s interest to do so.
Socialism is not having the state legally mandate that the minimum wage should be a living wage. That is because Socialism is not a necessary condition to the state mandating that minimum wage should be a living wage. Nor is socialism a necessary condition for having the gov’t provide assistance to those who are paid poverty wages. Other groups of people and ideologies promote those ideas.
The issue here from my perspective is justice. Is the government doing what is just when it allows businesses to pay workers poverty wages? Why that isn’t a faith issue is much like saying that believing that the government should provide police and military services to protect its people from wrongdoers is not necessarily the same as putting our faith in the police or military to save us. The issue isn’t whether my faith is in the government, the issue is whether the government is doing what it has been charged by God to do.
BTW, who better determines the value of workers, is it businesses or bureaucrats? You’re missing a point with this kind of question. The value that workers provide for businesses is the sum that includes what owners want to keep and what they will relinguish to their employees. The more that owners want to keep, the less they will relinquish. So, especially in a Capitalist model whose fuel is greed and whose lubricant is competition, determining what workers are worth creates conflict of interests issues for the business owner. And as much as you ask whether I have owned a business, you might want to ask yourself what kind of quality of life is provided by and how long have you lived on poverty wage? Owners are not the only stakeholders in a business. And in a system where businesses, especially publicly owned ones, let employees go so they can go elsewhere for employees so that the shareholders’ profit increase, what is the system saying about the intrinsic value of those workers? By making those workers so easily disposable, is that system treating the workers unjustly?
And who are the bureaucrats? Aren’t they there to provide information for our elected officials and aren’t they there to provide as much information as possible about all of the stakeholders involved in our economic system? So their value depends on them doing the proper research. But unlike business owners, they have no inherent conflict of interests in doing that research and providing that information.
Actually, you gave an incomplete picture of corporations and taxes. Taxes are there to pay for government services all of society enjoys, including the corporations themselves. For corporations not to pay their share of taxes is to force either the workers to pay for government services consumed by corporations or to continue to increase the federal debt. And whether higher taxes will result in higher prices depends paritally on the ROI expected by owners and shareholders. Here, we might want to look at a Martin Luther King Jr quote:
A true revolution of values will soon look uneasily on the glaring contrast of poverty and wealth. With righteous indignation, it will look across the seas and see individual capitalists of the West investing huge sums of money in Asia, Africa and South America, only to take the profits out with no concern for the social betterment of the countries, and say: “This is not just.” It will look at our alliance with the landed gentry of Latin America and say: “This is not just.”
See, corproations benefit not just from government services provided, but by the qualify of society its stakeholders enjoy. Those corporations that merely investment money without paying for government services or investing in societies are simple parasites the the aliens from the movie Independence Day were.
So your tax code needs to account for many things. Thus, in some ways it should be simplified. But in other ways it can’t. And so we have to address why the wealthy can hide from their societal responsibilities. But we can’t do that under our current system. For from the beginning of our nation, our government has been designed to keep those with wealth in control. This is what James Madison successfully promoted. The key here goes beyond the tax code. The key here is what socialism is trying to address: the distribution, rather than the consolidation, of power to workers. Now Socialism is wrong when it excludes business owners from the mix of people who have power. In our system, that would constitute a partial democracy. But currently, we have an oligarchy, not a democracy or democratic republic (see http://www.bbc.com/news/blogs-echochambers-27074746 ).
So what is needed is a change in the structure of our political-economic systems so that power is shared equally by all and we need a revolution in values because no political-economic system can survive regardless of the values held by the majority of people. Such will never produce a utopia, but it could very well improve the quality of life and society both here and now and in the future.
Because I have made this note too long already, let me know what I didn’t address but you want me to.
Curt, “Is the government doing what is just when it allows businesses to pay workers poverty wages?”
You’re so un-American. The Constitution doesn’t give American govt. power to fix wages of a private business.
The Constitution didn’t do a lot of things at first and some have been rectified and some have not. But remember the source, The Constitution was written in response to dissent and Shays rebellion. It was written to preserve the status quo and the place of the American elites who replaced the British elites.
If you want to stick strictly by The Constitution, we’ll have to get rid of agencies like the FAA, our standing army, the Air Force, and such. Also, you will have to interpret the right to bear arms only in the context of need for a militia. The militia is to armed and trained by funds from Congress and their commander and chief is the President. And rather than being stationed in other parts of the world, they must be here to repel invasions and put down insurrections. Thus, more gun control laws would be perfectly Constitutional than what some Conservatives prefer. That is if you want to stay striictly by The Constitution.
Now if you want to go by history, we see that, in America, it is the Protestant Church’s turn to support those with wealth and power. The Roman Church did that in France and Spain while the Orthodox Church did that in Russia.
” To simply defend poverty wages by relying on how they are set by the market is to imply that the market is inerrant. ”
Your thinking is utterly muddled here. To suggest that x is the best does not entail that x is inerrant. The market is the best source of information we have for setting value. It is not inerrant. To declare by fiat that some activity should be worth more does not make it so.
” you stated that the market determines what just wages are.”
No I didn’t. I reject the assertion that justice applies to an agreed upon wage. It is unjust to violate an agreement.
” BTW, your statement was very shortsighted anyway since determining compensation for work does include what allows the workforce to be replenished. It does that unless workers are disposable objects like any raw material would be.”
Like I said markets aren’t perfect, but properly setting wages that will continue to attract workers is the kind if information markets are veey good at providing.
” Finally, relying solely on the EITC to help workers who are not paid enough basically says that taxpayers, not businesses, have total responsibility for providing fair compensation to employees. ”
EITC was an example of the kind of program that is much more effective at lifting workers out of poverty than wage mandates. There is no such thing as a “fair” rate. It is the role of government to provide for the welfare of her citizens not businesses.
” As you wrote, the minimum wage is $0. Of course, relying solely on the EITC seems to contradict the conservative belief in small government because here government is doing something for people that businesses could or should be doing.”
Yes. No mattee what the wage mandate is a business can always find a way to get work done with out hiring workers. There is a reason the lfpr is falling…we have made compensation more expensive. Wage subsidies are a good way to reduce the intrusiveness if the state.
” What you are advocating is welfare for business in their payment for work. And again, do you understand why SJW and others have the attitudes toward conservative churches that they do?”
Yes, because worker hell holes like Germany two years ago had folks in the street with pitchforks there.
” Actually, my faith is not the issue as SDB’s is. SDB’s assumes that the market is always fair in how it pays workers”
No. I claim the market is the best source of information for determining the value of labor. Unless you want to ban AI and automation, arbitrary wage mandates will either be too low to matter or high enough to put folks out of work. Neither the bureaucrat nor the mob has sufficient information to out optimize the market. Better to let the market do irs job and determine value and the state do its job and provide for thewelfare of the people.
“He continues to say that the taxpayers, represented by the state, are there to pick the slack between what the employer pays and what the employee needs to live.”
“And according to SDB, there are no justice issues in the state’s decision to provide assistance programs to workers being paid poverty wages.”
I don’t recall saying that. No justice issue with an employer and employee agreeing in a wage is not the same as no justice issue with assistance programs (that I would like to replaced with a sliding wage subsidy).
“The state’s decision to help workers depends on whether it is in the state’s interest to do so.”
BTW, who better determines the value of workers, is it businesses or bureaucrats? You’re missing a point with this kind of question. The value that workers provide for businesses is the sum that includes what owners want to keep and what they will relinguish to their employees. ”
How simplistic. This explains why such a huge fraction if employees make the minimum wage…so Scrooge can keep more. Or not. As far as corporations not paying taxes… you still have not demonstrated that you understand the difference between s&c corps.
Vacuous platitudes and specious accusations may help your cred with cool kids at the occupy rally, but they aren’t compelling to the unconvinced.
Curt, “it is the Protestant Church’s turn to support those with wealth and power.”
As long as you are pure, it’s okay.
But remember, when you come to power and start paying middle-class wages, you won’t have any more blessed (poor) people.
You’re obviously not a student of history.
Regarding x, to say it is the best this time certainly doesn’t imply it is inerrant. To say it is the best every time is different. Especially when so much effort is put into not changing and so little effort is put into looking for alternatives or even questioning. At that point x has become a tradition blessed by the Pope
And no, about allowing the workforce to be replenished, that is for it reproduced itself. But to do that, the workers would have to be paid enough to support families without gov’t assistance. But that is not what replenish means to those who continually offshore work. That means find another country where workers can be exploited because they have no other choice. The real issue behind paying the lowest wages possible is greed by the owner and by those who ride on their coattails.
Regarding the EITC, effectiveness is not the issue, responsibility. To rely on the EITC is to say someone else will pay for my benefits. And to include demands for gov’t to living by a balanced budget is to say that gov’t must be responsible, but businesses do not have to be. The someone who pays, especially when the business does all it can to avoid paying taxes, are workers. If businesses paid full-time workers a living wage, then letting businesses pay would be more effective in the long run for everyone. But that we allow businesses to rely on gov’t assistance to subsidize payrolls is wholly inconsistent with any belief in personal responsibility. It is totally consistent, however, with the bellief that gov’t is there to service business. All you are talking about here is another corporate welfare expense when the EITC is used to supplement businesses paying poverty wages. And it shows how addicted we are to a system that benefits fewer and fewer people. The market is a religion to you at this point regardless of what you say. That businesses relying on gov’t assistance programs to subsidize their payrolls says that businesses can pay employees below what their worth and thus someone else is picking up tab. This shows how the market has failed. But you keep relying on it. It is like Israel’s neighbors who worshipped idols that could never speak, see, or hear.
Your view of using the EITC to supplement poverty wages is just another piece of evidence that says that our economic system is not workable. For it was workable, then it could run independently of gov’t. But the only independence that business wants from gov’t is from regulations. At that point businesses believe in separation of business and state. But when it comes to getting gov’t aid, your view shows businesses butting in line in front of those without jobs to get their handouts.
Curt, I’ll be darned.
Just because x is the best every time does not at all entail inerrancy. Like I said, your thinking is really muddled here.
1. There are a lot of proposals floating around that involve changes to the current system. The fact that they are not grounded in a discredited 19th century economic ideology does not entail that there is no effort into changing anything .
2. Lots of people are looking for alternative – a higher minimum wage isn’t a new idea. It is an old idea and a pretty bad one if your goal is to increase the labor participation rate and get people out of poverty.
3. I’m pretty sure that no matter how wedded I may be to x, there is little chance of my weddedness playing any role in turning x into a tradition blessed by the Pope.
I see no reason that all workers have to be paid enough to support families without gov’t assistance. The 19yr old doing a summer internship in my lab doesn’t need to support a family. The choice is between getting paid $8/hr to gain experience doing research or seeing the minimum wage go up to $15hr and finding out that he will no longer get paid – if he wants the experience, he’ll have to do it as a volunteer.
You should be careful imputing motives to people you don’t know. The fact of the matter is that global poverty has plummeted with freer trade. You call it exploited, they call it liberation.
Or perhaps maximizing the ROI for investors – like nurses, teachers, and college professors who rely on that ROI to pay for their kid’s college and their retirement.
To be responsible is to be effective. There is no platonic ideal income. The responsible question is what is the most effective way to decrease poverty and increase labor participation.
Um, if they are benefits, of course someone is paying for them. If your labor is not sufficiently valuable, it will be replaced. You still haven’t dealt with the drop in the LFPR and the impact that increased compensation costs have on that. Raising the cost of compensation at the bottom increases the barrier to entry for work and makes it much more difficult for people who made mistakes to start over, young people to gain experience, and workers with poor skills/aptitude to find something to do. Wage subsidies fix this by targeting the subsidy to people who need it (not my 16 yr old son working at a car wash, but the 28yr old ex con with a kid working as a busboy). Keep in mind that 1% of full time workers are making minimum wage. Another 2% of workers are part-time and making minimum wage. Most of those are dependents, not head of households. Wage subsidies that guarantee no worker would be in poverty are a more effective means of poverty reduction. Note that this will have virtually no effect on outsourcing as it is not minimum wage jobs getting shipped out – you don’t save enough. It is the more expensive manufacturing jobs going. Of course, most of the loss in this sector has been to automation rather than outsourcing.
I don’t think the government should have a balanced budget myself (or at least it shouldn’t be hamstrung thusly), but I don’t see what that has to do with businesses. Lots of businesses lose money. Are you proposing a law that says a business can’t lose money?
As I’m sure you are aware, most businesses (the overwhelming majority) pay taxes as individuals. I’m sure most of those business owners take advantage of various deductions available to them – it would be irresponsible not to. I’m sure they also only pay taxes on profits which means that they have to account for costs.
Not if the labor provided by the employee is not as valuable as the living wage.
Only if you believe that businesses are responsible for alleviating poverty. I don’t believe that.
I always thought that government was there to (among other things) provide for the general welfare of the people. Silly me.
Well that would be an interesting empirical question to ask. Where are the non-dependent workers employed who earn a small enough wage to qualify for a wage subsidy. A single person making minimum wage and working full time (~2000hrs/yr) would be well above the poverty line. A head of household with three dependents would need about $11/hr. I would guess that single people are going to be concentrated in jobs like bartenders, baristas, couriers, and mom and pop retail. Personally, I think $15,000 is a bit low. $20,000 is probably more reasonable – so I would start the wage subsidy at $2.50/hr and decline from there as wages went up (not one for one in order to minimize the marginal hit). I suppose that you could consider this a welfare expense to these small businesses, but another possibility is that it would expand employment opportunities – jacking up the minimum wage to $10/hr right off might result in fewer employees – of course, it depends on the margins in the business, the current prevailing wage, etc…
I suspect that head of households making minimum wage are likely working retail. Again, it might work out as a subsidy that allows the big box stores to increase profits by decreasing wages (though wages are sticky, so the more likely outcome is that wages just wouldn’t grow as fast). On the other hand, as people build experience, they improve their marketability which gives them stronger bargaining power. It also means that the marginal cost of improving customer service will drop creating a new equilibrium that will result in a higher LFPR.
Wow. You’re ignorance is embarrassing. The market is a tool – a very efficient one at determining value. Businesses do not rely on gov’t assistance to subsidize payrolls – they would do just fine if the 1% of workers making minimum wage stayed in poverty – they sure aren’t buying iMacs! If a business was not paying a worker what she is worth, it is likely that another business would scoop that worker away. But here’s the thing. There are a lot of people who just don’t have very valuable skills. Lots of jobs have ceased to exist because the work just wasn’t very valuable. Wage subsidies are not about subsidizing the business to cover what employees are worth – it is about making sure that people without sufficient skills to command a decent standard of living can have access to it nonetheless.
Do you really believe that? If our interstate system were truly workable, it could run independently of gov’t. If our educational system were truly workable, it could run independently of gov’t. If our labor markets were truly workable, then people without valuable skills could still command an arbitrary wage set by activists.
I suspect that if we subsidized wages, eliminated minimum wages, and replaced payroll taxes with pigovian taxes on energy, we would see the LFPR increase. I know it might help a few businesses, so obviously I am just a greedy market worshiper or something.
You need to come up with a better argument (or really just come up with an argument) that justifies any of your claims if you want to be taken seriously. So far your still just trading in platitudes and insults.
I’ll believe you can be darned when you tell me how you can be saved from being darned.
On a practical level, when there are valid multiple options, bellieving that x is the best way all of the time does imply a belief that it is inerrant. That is how it is. Let me ask, when was the last time you believed that y was the best option? Never?
Here is the short of our issue here, it is whether the market works when the market needs so much supplemental help from the government to be feasible while the market’s main participants, corporations and financial institutions, do all they can to avoid paying for that help.
Um, no. It means that it is the best of all the alternatives. Think democracy – certainly not perfect, but always better than all the other valid multiple options.
You mean an alternative to the market was better than a market? That’s easy…utilities and roads should not be run by markets. There is a major collective action problem, high barriers to entry, and major negative externalities that the market cannot address. This is generally true for issues related to pollution as well. So yeah, I don’t want three different kinds of power grids with houses that have incompatible outlets. I want standardization there and markets don’t do that well. Pollution and efficiency are probably best dealt with via Pigovian taxes rather than emission/efficiency regulations as we’ve seen from the utter failure of CAFE standards, but the market alone isn’t going to solve that kind of collective action problem. Making sure that people who are willing to work can make a living is better handled by wage subsidies rather than artificially propping up wages. As we’ve seen with PPACA, bureaucrats can never anticipate all the ways that people find to get around regulations (now companies are shifting to almost all freelancers to avoid health insurance entirely, grad students have gotten the shaft -from liberal public universities no less! by having hours capped, etc…).
No. The short of the issue is that you’ve gone all moralistic on a technocratic issue – it isn’t fair that a corporation might benefit, so we are going with mandated wages – yet your moralistic crusade would make workers worse off by incentivizing corporation to eliminate jobs. Those retail clerks may not like $9/hr, but if we go to $15/hr you can bet that you’re going to see a lot more of those self checkout stations and longer lines. Guess who gets hurt? The most vulnerable. But you reduce that wage to $5/hr, eliminate payroll taxes (replaced with carbon taxes that make shipping more expensive),and guess what? More people can get entry level jobs, more people are working, and those people who work and need a living wage will get it (a sixteen year old bagger doesn’t need a wage subsidy…either does the spouse putting a few hours at the florist for pocket money and an excuse to get out when the household income is $100k/yr…the single mom might though – wage subsidies do that).
Furthermore those hell holes of inequality like Iceland, Sweden, Norway, Finland, Austria, Singapore, and Switzerland seem to have found ways to make things work without a minimum wage either. Curious no?
Yes, markets work even if the information it provides is that a certain activity requires a subsidy to make it happen. The fact that corporations (both those subject to corporate taxes and those that file as individuals – the overwhelming majority of corporations) take advantage of tax breaks that incentivize behavior, avoid doing business in the US because of our absurdly high corporate tax rate, or don’t pay taxes on losses is not a sign that the system is broken. To be sure there are problems (and always will be), but tweaking the margins by expanding the EITC and smoothing out the phaseout and replacing payroll taxes with an energy tax would help a lot of people (even if it would allow those greedy rich people to prosper too).
Curt, when Jesus is my judge instead of you.
I never pretended to be your judge. BTW, is Jesus the judge of the NeoCalvinists?
you didn’t address my point. Are the markets working, and by that I mean self-sustaining, when they receive substantial subsidies from an outside source?
As for democracy, is it th best system? Depends on best for what? I’ve always maintained that democracy is the best system for distributing power The question becomes this: Do people want power to be distributed? The answer to that question is on a case by case basis. My contention is thatwhen the leading candidates for the two parties have authoritarian personalities, then the answer in our case ‘no.’ And so if one is going to complain about the centralization of power, one has to deal with the reasons why we want candidates with authoritarian personality types.
As I wrote above, “Yes, markets work even if the information it provides is that a certain activity requires a subsidy to make it happen.” The market is a tool for setting prices. Markets are not and can never be self-sustaining. Who would suggest such a thing (I mean besides the nutty anarcho-capitalist who wants to start his own country on a boat in the middle of the pacific)? Markets depend on functional institutions such as the rule of law. When the rule of law breaks down, so do markets (witness what happens to the exchange of goods during a riot – I’m pretty sure the market isn’t setting the price for the TV the guy carrying it out of the smashed in store front paid). Markets set prices – the result of a functioning market may be to tell us that a certain activity can only be sustained by subsidies.
Maybe, maybe not. But one’s conclusion that democracy is the best (even if that is always one’s conclusion) does not entail that one believes that democracy is inerrant or that it is their religion.
Who would request a system that is self-sustaining? Those who want to cut the federal budget want the budget to be self-sustaining. And one of the reasons we have a non self-sustaining federal budget is the amount of subsidies that the gov’t puts into the market. These subsidies range from tax credits for gthose who receive poverty wages to gov’t assistance programs for the same group to net tax refunds for corporations to tax loopholes to subsidies and finally to foreign policies that favor certain corporations. I also forgot our unnecessary spending on the pharmaceuttical, prison, and military industrial complexes. And that doesn’t even include the loans that the fed gives to our financial institutions at below market interest rates so that these same institutions can profit by applying market interest rates to some of their customers.
With that much government support for the market, questions come to mind. Firse, since you agreed that the market is not self-sustaining, how much in gov’t subsidies indicate that the market is not working?
Second, if the market needs that much government interventoin, at what point then does the purpose of our gov’t become to represent business, especially big business who are the primary recipients of gov’t subsidies, leaving us to rely on business for our daily bread while leaving us under represented or even unrepresented when there is a dispute between the gov’t citizens and business?
Finally, if at what point does the government’s role as a stakeholder in the market make it a part of the system itself. Thus justifying government involvement other than transferring public wealth to private elites?
As for democracy, it is the best structure for distributing power. The question regarding whether it being the best makes it inerrant is this: Is distributing power always the best option to take. Note that the more democracy and elite-centered rule are inversely related.
Idiots who do not understand conservation laws?
A budget is just what you plan to spend. Wanting to plan to spend less does not make a budget “self-sustaining”. Your sentence has no meaning in the English language.
You mean we run deficits because we spend more than we collect in taxes? Ok. Deficits are sustainable, and as a function of GDP, ours are quite sustainable.
A market is tool to determine value and thus set prices. One way for a market to work is to tell us that the value of an activity is too low for someone to make a living doing it. Society may still want people doing that work, so we may decide to subsidize it – we may even subsidize it at 100%. That could be a perfectly rational and (dare I say) just outcome.
I don’t see why the dependence of businesses on government leaves us under represented or even unrepresented. Seems to me that this could give people quite a bit of power over businesses – do what we like or we will vote away your subsidies. That doesn’t really reflect reality, which suggests that perhaps the subsidizing flows the other direction? No doubt that crony capitalism is a problem. None of this is in the least bit relevant to the utility of the market for determining prices and the superiority of wage subsidies for the working poor rather than arbitrarily defined minimums that will displace workers. You still haven’t explained what happens to all those people who do work that isn’t worth $15/hr. Are you going to pass laws against productivity gains? Surely you don’t believe that just because someone needs to make $15/hr and work 2000hrs/yr to make ends meet that their skill set is necessarily valuable enough to command that wage.
Read what I wrote above. Markets are dependent on a number of things to function – including the rule of law. Of course government is part of the system. Stop reciting bumper stickers and actually think about the conversation at hand.
Inerrant means with out error (i.e., perfect). You can be the best and always be the best and never be perfect. If you aren’t perfect, then you are inerrant. If your command of political theory is as weak as your understanding of economics, then I doubt that a conversation about the relative merits of democracy and elite driven representative republicanism would be all that enlightening.
You don’t see how we are under represented when government takes care of business so that business can take care of the rest? Let me ask you something. Is it business’s job to take care of us or to make a profit? Because according to some, we lost our democracy and that leaves us under represented and at the mercy of those for whom business exists (see http://www.bbc.com/news/blogs-echochambers-27074746 ). So who has the power, elected officials or business?
So if trade agreements and organizations favor business and those trade agreements limit what kind of legislation our gov’t can pass, we are not under represented? If officials are elected because specific individuals or corporations contributed enough to make their election possible, and those officials votes are solely based on what benefits those who contributed the most to the election, we are not going to be under represented? When elected officials support bloated military budgets, laws that reduce more business for private prisons, regualations that prohibit medicare from negoitiating for lower drug prices, cutting social security benefits claiming that the fund is in trouble while not telling us that Social Security is the biggest holder of the federal debt, the elimination of regulations that protect the safety of our food, the elimination of regulations and laws that control irresponsible behavior in our financial sector, and military aid to nations knowing that the money actually goes directly to arms manufacturers and you are going to tell me that we are not under represented? And I forgot, when our elected officials don’t push the criminal prosecution of those responsible for the economic collapse of 2008, you are telling that we are not under represented?
That the campaigns of Sanders and Trump are anti-establishment campaigns, though Trump is really part of the establishment, doesn’t tell you that more and more peoplle believe that their gov’t officials do not represent them?
You’re satisfied with the status quo so you support it. And it is like those from the Hunger Games movie who live in the Capitol. They live banal escapist lives and thus can’t or refuse to see what life is like in the districts. How our support for dictators who favor our business operations or buy our products or our control over who will be the leaders of certain countries or our forcing of free trade on nations that cause them to lose a significant portion of their agriculture sector or just the environmental damage our way of life cause for the world should give you an idea of unsustainable our current system is.
Now we can discuss $15/hr if you want. It appears that you made some assumptions about what I support. And since the value of work is subjective, you seem to act as if people’s work isn’t worth $15/hr, we’ll have plenty to discuss. But address the above first.
” If officials are elected because specific individuals or corporations contributed enough to make their election possible…”
Ask Jeb Bush about that (or Hillary last cycle).
Forgot to mention something else. Do you think those who work for minimum wage and see how the businesses they work for continue to increase their profits and the amount they pay in shareholder returns feel under represented when their gov’t opposes raising the minimum wage? Or do think taxpayers like whose taxes go to subsidize corporate payrolls so that they can increase their profits and store their money in offshore accounts to avoid paying taxes feel under represented? The list goes on.
You seem unaware of those who aren’t benefiting from the system like you are. In addition, it seems that you are more unaware of economics than I am. After all, you know a part of a speicific system you favor. You might know a bit more about twaking hat system than I do. But you don’t seem to have a clue as to how to criticize that system from the outside. And your logic that says my knowledge of economiics what that would imply about my knowledge of politics is simply authoritarian move.
Yes, my position of replacing most of our safety net with wage subsidies and a guaranteed minimum income, and cjr following Stuntz is nothing more than support for the status quo.
Nothing is sustainable. What I see is that the rise and hegemony of neoliberal capitalism has made the world richer, reduced hunger, war, disease, poverty, and mortality. Virtually every country is better off today than in 1970. There is a reason that most socialist economies have under gone market based reforms…capitalism is better. It isn’t perfect and there are losers in the system, so safety nets are necessary. Wage mandates are not helpful…wage subsidies are.
The point was the relative merits of a living wage mandate vs. wage subsidies. The value of work is not subective. The market tells us what it is. Some work is worth ~$0. Other work is worth orders of magnitude more. Some people are incapable of doing work that is enough to live on. A lot of them could develop skills that would enable them to do so if they gained experience. Allowing them to work and providing a smooth wage subsidy rewards effort and provides incentive to advance. Further it would be cheaper to administer than the patch work of means tested programs we have today that create huge marginal hits for workers.
Buy whatever. I see above that you are stuck in a rut reciting platitudes that would have resonated in the McGovern campaign. Very reactionary….
” . Do you think those who work for minimum wage and see how the businesses they work for continue to increase their profits and the amount they pay in shareholder returns feel under represented when their gov’t opposes raising the minimum wage? ”
No most of them can’t vote seeing as how they are 16yr old kids flinging burgers and fries. The undergrads in my lab are quite happy to make minimum wage and they can vote. They know they wouldn’t be working if the money minimum wage shot up to $15/hr. Indeed, several ask to work for free. I doubt the companies hiring excons and paying them minimum wage would fare so well at a “living wage”. A risk at half that might be worth it. Then there are the stay-at-home mom’s looking for a few extra bucks and something to do while Jr is in school. A low minimum wage helps there too. These people I listed who comprise most of minimum wage earners would not benefit from a wage subsidy. The working poor would. It provides targeted relief without distorting the labor market as much. Eliminate the minimum wage entirely and replace it with a smoothly varying guaranteed income.
” And your logic that says my knowledge of economiics what that would imply about my knowledge of politics is simply authoritarian move.”
Yep. I’m with Plato on this. If you don’t know what you are talking about you should shut up until you do. Given my wife’s social work and our involvement in foster care and prison ministry I have some idea how the poor struggle, but anecdote is not the singular for of the word data.
Why should I shut up when you seem to equate knowledge with your opinion of things. And no, you don’t know how the poor struggle. For one thing, the poor are not a monolith. Second, it isn’t until you live as a poor person that you begin to understand how they struggle. You get vicarious glimpses. To use an analogy provided by an economist, you can study love and ask people about love, but until you fall in love, you really don’t understand it. So the economist I am referring taught at Cal Berkley. And so to study poverty, he lived with those who poor for a while. And his conclusion, until you are poor, you don’t understand it.
And so you’re with Plato, are you bragging or complaining? If you are with Plato, how can you make a valid judgment on when people are represented by their government and when they aren’t? You’re initial statement didn’t take into account specific groups of people. You jusst surmised, yes people are represented.
BTW, do you know the demographics of those working for minimum wage? Do you know the demographics of those working fast food jobs? According to the 2014 BLS Report, the vast majority of minimum wage workers are 25 and older (see table 1 from: http://www.bls.gov/opub/reports/minimum-wage/archive/characteristics-of-minimum-wage-workers-2014.pdf ). BTW, the average age of fast food workers is 29 with 40% of the workers being 25 or older. In addition, 31% of fast food workers have attended college while 26% are parents raising children (see http://www.nytimes.com/2013/12/01/nyregion/older-workers-are-increasingly-entering-fast-food-industry.html?_r=0 ).
Have to do some work now but will address the rest of your note later. Perhaps before you so flippantly categorize people who work for minimum wage, perhaps you should update your knowledge.
First, if you are with Plato, what do you know about democracy?
Second, do you really know what it is like to be poor from the sources you have? According to one former economist from Cal Berkley, one has to be poor in order to understand poverty. This person encountered that fact when he was trying to explain economics to a poor person. He realized that he had no language that could explain to this person how economics works. So he lived for a while in poverty with other poor people.
Third, you need to update your knowledge regarding minimum wage and fast food workers. Regarding minimum wage workers who are 16 or older, 43.8% are 25 and older. 27% are between the ages of 20 to 24, while the remaining are between the ages of 16-19 (see http://www.bls.gov/opub/reports/minimum-wage/archive/characteristics-of-minimum-wage-workers-2014.pdf ). Regarding fast food workers, the average age of a fast food worker is 29. 40% of fast food workers are 25 or older. 31% of fast food workers have attended college. And 26% of fast food workers are parents (see http://www.nytimes.com/2013/12/01/nyregion/older-workers-are-increasingly-entering-fast-food-industry.html ).
Fourth, your suggestion about EITC simply transfers public funds into business profits by having the government makeup the difference between what business is willing to pay its low-wage workers and what they need to live on. At the same time, some of these businesses whose employees would rely on the EITC do all they can to avoid paying taxes.
You seem not to understand the value of the worker. The value of the worker is not what the business owner determines it to be. The value of the worker is the amount of income the worker brings to the business. With the current system, the owner takes what he/she can/wants and says that the worker is worth the remaining amount. So how is it that you can categorically say, as you did in an earlier note, that some workers are not worth $15/hr? In addition, how could you pretend to know what my views on the minimum wage are?
It seems that maybe you need to revisit your economic studies.
curt, “If officials are elected because specific individuals or corporations contributed enough to make their election possible, and those officials votes are solely based on what benefits those who contributed the most to the election, we are not going to be under represented?”
Why would someone who believes in the fall be as outraged as you appear to be?
Life sucks. You die. Christians hope for the resurrection.
Just wanted to note that in my first response for today, I made an error in reading the BLS table. I corrected that error in my second note.
Yes, life does suck andy yes we have our hope, and we could add our freedom as well, in the Resurrection. But as Paul warned the Galatians to not let their freedom be used as an opportunity for the flesh. the question becomes this: should we let our hope in the Resurrection be used as an opportunity to withdraw from the unpleasant situations in the world and thus not love our neighbor or serve one another in love or not let our faith work love (Galatians 4). In other words, does that hope give us license to live in the bubble of our choice?
Not saying that we should all have the same stewardships in this world. But our stewardships should involve challenging injustice to varying degrees and standing with those who are oppressed while not becoming like the soil that was full of thorns that choked the seed. Why challenge the injustices? Because those committing them need to be admonished to repent.
Curt, let him without injustice challenge the injustices.
Curt: “You seem not to understand the value of the worker. The value of the worker is not what the business owner determines it to be. The value of the worker is the amount of income the worker brings to the business.”
Employee value is based on multiple inputs – education, knowledge, skill, experience, and the market availability of the same to name a few. Did all the temple designers and builders earn the same wage? Where in the Bible do you find a foundation for this definition of employee value?
Curt, you have no idea who I am or what my background is. Nor do you know whether I have ever been poor. It is true that the poor are not a monolith, so that would suggest that if one must walk in shoes to understand the tradeoffs involved in lifting one out of poverty, your experiences aren’t very helpful either.
You’re just sputtering now. This is utterly incoherent – even for you. Recognizing the dangers of giving the masses what they want entails that I don’t know anything about democracy? Curious line of reasoning there.
Why is his experience dispositive? Yeah, I think my on the ground experience with the poor gives me some insight. Given my life experiences, which are frankly none of your business, I think I have a pretty good handle on rural poverty.
2.8\% of workers earned the minimum wage (or less) in 2013.1/4 of these are under the age of 19. So something like 2% of independent adults make the minimum wage. 1.4% of them are over the age of 24. I don’t know why you selected fast food work. That is just one of many sectors where people can make minimum wage. My earlier point is that a 16yr old flipping burgers or cleaning pools doesn’t need a particularly high wage. The 24yr old parent of two does. That doesn’t mean that the value of the work provided by the 24yr parent is necessarily more valuable than that of the 16yr old. To correct for the fact that the 24yr old needs more than she can earn given her skill set, wage subsidies are much more helpful than mandating an artificially high wage.
Pretty sure it is a transfer to the working poor. I would assume that all businesses do all they can to limit how much they pay in taxes. Don’t you? I fail to see why that is relevant to this discussion.
Is it really categorical to say that there are workers not worth $15/hr? I have two of them in my lab. They aren’t worth $15/hr. If I had to pay them that much, I would eliminate their positions and hire a postdoc to do the work.
Your view on the current system strikes me as remarkably jaded. If the company offered wages that were too low, it is likely the worker would go elsewhere. My contractor friend has run into this issue – at $16/hr he could not keep his framers. He is now paying $18/hr. He is afraid to go much higher as it is already putting serious financial pressure on him. On the other hand, he can’t stay in business if he is always hiring and retraining. How much are the framers worth? Well $18 is pretty close to the mark. If the state mandated that he had to pay $20, he would likely go under and that would be that. If he went back to $16, he would lose his workers. Now those workers could have a much easier job (in air conditioning no less!) working at the QT. But they only start at $9/hr. Their ability to do all the things they do to put up a house wouldn’t be valued by a place that just wants you to mop floors, stock shelves, and sell lotto tickets. Now the guy who works at /QT may not be capable of doing the work the framers do, so he is less valuable. That doesn’t mean his needs are less. Wage subsidies would mean that he could enjoy a decent standard of living anyway. artificially inflate wages, and you will likely see that person simply leave the labor force. This is a big reason that the LFPR for 19-64 yrs has been steadily declining for the past 20yrs. It cost too much to employ workers, so their jobs go away.
You said you opposed wage subsidies, but wanted a living wage. The living wage proposals I’ve see all hover around $15/hr. This would displace a lot of people…it is a terrible idea.
In other words, we are to change Amos’s admonition to: Let injustice roll down like waters in a mighty stream. Did you know that Concordat made between the Pope Pius XI and the Roman Church with Hitler’s Nazi government followed 2KT. The Nazis promised the Roman Church full freedom in theology so long as the Church said not a word about politics.
Why is it that we don’t learn from history? The Church’s siding with wealth and power preceding the French, Russian, and Spanish Revolutions meant not only the persecution of the Church, but it included people having public disdain for the Gospel. And to say nothing in the face of evil is to side with evil.
Certainly I bring up social injustice as a sinner who has visited injustice on others. And what allows you to judge Keller and the NeoCalvinists the way you do? Are you, like Tim Keller and the NeoCalvinists all sinners? If so, why can you judge them while you give hints that I should not challenge injustices?
My point is that employee value can also reside just in the results that the employee produces. Again, to defend the right of the owner to be the onluy person who determines employee value is to ignore the obvious conflict of interests the owner has when the wealth he/she wants from the business must compete with what the owner will pay the workers. Thus, regardless of any rubric, the value of the worker is subjective in the mind of the owner. And it doesn’t fully recognize that the value of the worker can measured in the income the worker brings into the business.
And what do you know about me? I know what you have revealed. And what you have revealed is that you prefer hieracrhical relationships and you also prefer to be un the upper end of those relationships looking down on 16-year-olds flipping burgers. And here, please note the collateral damage your looking down on those 16-year-old burger flippers. And remember you said that being represented in a democracy didn’t matter when speaking about minimum wage workers because most of them were 16-year-old kids flipping burgers. The problem is that you were statistically off by quite a bit with 43.8% being over 25 and 27% being between the ages of 20-24. Please note that I was not referring to fast food workers when I mentioned those stats. I added fast food workers because you brought up the subject by claiming that most minimum wage workers were 16-year-old kids flipping burgers. You should also note that poverty wages includes the minimum wage, it does not equal it. You should also know that if you raise the minimum wage, you raise the wages of all above them. So why are so focussed on the minimum wage here?
And our discussions show that whether you’ve been poor or not, doesn’t matter. Why? Becuase I know a number of people who came out poverty who are cold to those from their old neighborhood.
And no, I waan’t sputtering. If you side with Plato, you are an antagonist to democracy. You know it more from the outside than the inside. You should know that you aren’t the only one who is aware of weaknesses of democracy. But democracy is the only isntitution that, structurally speaking, can prevent the consolidation of power. And those who are really concerned about the abuse of power, you would recongize that. And what I just said applies to the workplace as well as
I’ll address one more point. The EITC, when used to supplement, or really compensate, for employers paying poverty wages is a transfer of wealth from the public treasury to those with wealth and you know that. Why? Because if employers paid those employees utilizing the EITC enough money so that these employees would not need the tax credit, the owners’ profit would be smaller. SO the EITC is implemented to increase the profits of business owners at the taxparyers’ expencse.
Curt, the only person who can establish employee value is the employer. The one who actually pays the wages. In Matthew 20, the parable of the workers in the vineyard, Jesus seems to be perfectly fine with this. No owner, no employees. I don’t see why it should be a focus for Christians to lead a charge for change.
Curt, I’m not on the side of power and wealth (like someone in the OPC needs to explain that). But I’m not your side.
Keller is wrong. That’s different from sin. But for you, sin pervades everything, hence your constantly coming across as self-righteous.
Francis Effect can’t dent Vatican effect:
Silence can mean support. If we see a brother and are silent, what is the end effect. Unless you feel that the state can never sin, then silence when it does sin, especially when it especiailly sins, is support for the sin. That is why General Eisenhower made German citizens tour the Nazi death camps that were adjacent to their towns. Their silence made them complicit in the sins of their nation.
As for Keller, like you and me, he is right on somethings and wrong on others. And noting that we all have merits and faults, that should contol how we note the faults in others.
As for saying I am self-righteous, seeing that is a subjective judgement the only thing I can say is that the subject here is not me nor is it you. The issue I brought up is that the 1933 Concordat made between the Nazi Government and the Roman Church promised complete theological freedom for the Church provided, and this provision was extended to the Protestant churches, that they don’t interfere politically with the state. Now 2KT has good points that Transfomationalists should learn from outside of what Keller lists in his book Center Church. But here, the provision made in the Concordat that prohibited the Church from speaking politically fits in with 2KT. And it also fits in with the behavior of the NeoCalvinists when one realizes how it is that they want to change the state and society. The similarity with the mentioned provision of the Concordat should give some people cause for alarm while the rest of us have struggles to deal with.
Says who? On a practical leve that is true. But is it true on a moral level?
Besides, you have not addressed the conflict interest issue I raised.
Curt, I don’t see where there is a moral element to this question about who establishes worker value. The worker can take steps to make himself more valuable, but his value is to the employer who pays the wage. The only conflict I can see is whose greed prevails.
Read Ecclesiastes, thank God for the blessings you have. Be content in all things. No one, not the government, not your employer, owes you anything. This has always struck me as clear Biblical counsel.
” And what you have revealed is that you prefer hieracrhical relationships…”
True…don’t you? I like having a king.
“… and you also prefer to be un the upper end of those relationships looking down on 16-year-olds flipping burgers. And here, please note the collateral damage your looking down on those 16-year-old burger flippers. ”
Why would you say I look down on 16yr old burger flippers? Their worth as individuals is not tied to the economic value of their labor.
” You should also note that poverty wages includes the minimum wage, it does not equal it. ”
Maybe, but a single person making minimum wage 2000hr/yr is over the poverty line. Every discussion of wages I’ve seen of late is looking at the minimum wage.
“You should also know that if you raise the minimum wage, you raise the wages of all above them. So why are so focussed on the minimum wage here?”
I doubt that is true. More likely you see the elimination of positions and the higher productivity positions survive. The more expensive compensation costs are, the more competitive displacement technologies become. As I noted earlier, the real minimum wage is zero. You seem to be suffering under the delusion that everyone has the skills to perform labor that is economically valuable enough to support some arbitrarily set minimum. Not everyone can, and as tech advances and compensation costs rise, we will see the decline in the lfpr continue. Yet working has value for the worker beyond the paycheck. It imparts skills that enable some workers to advance, a sense of ownership/civic engagementioned in society, and a social network, among other things. We should strive to have as many people working as possible. But as I noted, not everyone can command a “living wage”. Thus the elimination of anew arbitrarily set minimum with a replacement of wage subsidies designed to phase out in a way to minimize the marginal hit of increasing salary can accomplish that.
” And our discussions show that whether you’ve been poor or not, doesn’t matter. Why? Becuase I know a number of people who came out poverty who are cold to those from their old neighborhood.”
Then why make the accusation you did? You have been quite free with your accusations about my motives and experiences. That’s quite uncharitable. You know nothing about what I do or don’t do for the poor, my current or prior socioeconomic status, or contentment of the status quo. But you have called me an idolator, asserted I don’t know what it is to be poor, and claimed I just want to maintain the status quo. Insofar as you fancy yourself a prophet in the mold of the OT, you are a false prophet.
” And no, I waan’t sputtering. If you side with Plato, you are an antagonist to democracy. You know it more from the outside than the inside. You should know that you aren’t the only one who is aware of weaknesses of democracy. But democracy is the only isntitution that, structurally speaking, can prevent the consolidation of power. And those who are really concerned about the abuse of power, you would recongize that. And what I just said applies to the workplace as well as”
Huh? My point was narrow. One can think democracy is the best alternative for our society without thinking it inerrant. I am deeply suspicious of democracy, though why you think my suspicion makes me an outsider is strange. I prefer “elite” rule, but not monarchies. That is why, in part, I am a Presbyterian rather than Baptist or Anglican. I also think it is a pretty good model for state governance as well.
” I’ll address one more point. ”
Your generosity is inspirational.
“The EITC, when used to supplement, or really compensate, for employers paying poverty wages is a transfer of wealth from the public treasury to those with wealth and you know that.”
Who pays for most of that public treasury? Something like 85% of the public treasury is funded by people and corporations making about 100k or more /yr. The bottom 20% pay almost nothing in taxes, so the EITC is simply a transfer from the wealthy to the poor.
” Why? Because if employers paid those employees utilizing the EITC enough money so that these employees would not need the tax credit, the owners’ profit would be smaller. SO the EITC is implemented to increase the profits of business owners at the taxparyers’ expencse.”
Your reasoning is faulty. If their profits were smaller, they would pay less in taxes that fund the EITC (again most of the minimum wage workers are getting paid by s-corps that file as individuals – think your independently owned and operated franchise, retail shop, carwash, etc…). But the money would go to wealthy people making minimum wage as well as those that depend on the wage for a living. But raising the wage thus would displace the poor (perhaps disproportionately). Whatever the case, your assertion that “SO the EITC is implemented to increase the profits of business owners at the taxparyers’ expencse.”
does not follow from the preceding sentence even if it were true.
Basic economics tells us that some people/positions contribute more value to a company than others. Apple’s iPhone programmers contribute more value to the bottom line than the janitor who works at the company office. That doesn’t mean that the janitor is less worthy or valuable as a person; it means that his skills are more widely available and not as highly in demand as the iPhone programmer. It really is that simple.
That some people contribute more the sales a company makes is not the issue. The issue is whether a business should pay poverty wages to the lower-skilled employees since they still are instrumental in bringing moving a business’s merchandise or services. When businesses treat their employees as disposable, as many businesses do not just to lower skilled employees, but to well-edcuated ones as well, or they pay them poverty wages, then those businesses are saying what they think the value of the employee is as a person. It really is that simple except for those who neglect to mention that many business decisions regarding the pay and treatment of employees are made exclusively with the shareholders’ interests in mind.
First, there is an inconsistency between paying poverty wages to employees and saying that a business values those employees as people. It doesn’t have to do with how much is in their bank account as much as how much a business cares about the welfare of their employees. There is a contradiction when a business says that they care about human worth of their employees when they pay those poverty wages so that they increase the ROI to shareholders. So why the verbal gymnastics here?
BTW, the poverty line for where? For a major city? And specifically, what does that poverty line mean? Does it mean that when one is paid above that level, they have no need for any gov’t assistance programs? Or does it mean, as I have found out from talking to people on minimum wage that adults are forced to live withtheir parents or they are forced to live in food deserts or they are forced to live in substandard housing? The Federal poverty line deals with certain assistance programs, it doesn’t give the complete picture. That you would define poverty strictly by those numbers shows the impersonal nature of your view of the subject. Did you know that many homeless people are employed full-time? Note that NYC has over 300 full-time employees who are homeless (see http://nypost.com/2015/09/21/hundreds-of-full-time-city-workers-are-homeless/ ).
BTW, when you respond to my statement that raising the minimum wage will raise the wages of the employees above them by saying:
I doubt that is true. More likely you see the elimination of positions and the higher productivity positions survive.
you are showing that your reasoning is speculative at best. And it certainly doesn’t match the views of my one friends who owns his own business. Yes, job losses can occur too though the Seattle experiment has shown that those job losses can be recovered. But to believe that those making more than minimum wage would not expect to also see an increase is a bit unrealistic.
Also, don’t even say that the real minimum wage is $0. That shows how much a machine you are becoming and how little people really matter when business is on your mind. If I was a nonChristian and heard you say that, I would never consider even listening to your religious views.
As I wrote before, one doesn’t understand poverty unless one has been poor. I lived on minimum wage when minimum wage was affordable back in the 80s and I found a room for a real cheap price. I could not do the same today. So I don’t understand what it means to be poor today. And judging from your views expressed here, neither do you.
As for the shifting tax burdern, you seemed to have missed the point. The point was that the burden shifting from corporations to individuals. If compare the income paid by individuals vs corporations over the years, we find that during the 1960s, you’ll find that the percentage of total income tax revenue paid by individuals ranged from 64% to 70%. But since 1980, that percentage has ranged between the mid 70s% to the high 80s%. This is what I am talking about when referring to the shifting tax burden (see https://www.whitehouse.gov/sites/default/files/omb/budget/fy2017/assets/hist02z2.xls). One would expect those who are more wealthy to contribute more because 1) they are better able to; 2) wealth disparity is significant and has either statnated or is growing; and 3) they use more of society’s resources. But when we are talking about deficit and debt problems and the realistic possibility that the dollar will be replaced as the world’s reserve currency, something that can have a drastic effect on our economy.
Quite frankly, when businesses pay such low wages so that gov’t assistance programs must fill in the gap, it shows that business either will not pay its fair share or cannot. And if cannot, then we are living in an economy that isn’t self-sustaining. Your arguments defending the state filling in the gap are utilitarian, not moral or practical in the long-term. They fit a need that is not sustainable, nor is it moral. When the gov’t fills in the gaps so that businesses can enjoy higher profits and increase payouts to stockholders, we see a transfer of the public wealth to the wealthy. Yes, their taxes might increase, but that is only because their income has increased more. And such shows how skewed your argument is. You are very select with the variables you include in your argument.
But how you state that the minimum wage is $0 is the most morally offensive statement you can make. What you have said is that business is under no obligation to reconize any intrinsic value of the employee. But I guess that is the only way business can work, and you have no qualms with it. As I wrote before, if I was a nonChristian and I read these comments of yours, I would have no interest in hearing your religious views.
The issue is whether a business should pay poverty wages to the lower-skilled employees since they still are instrumental in bringing moving a business’s merchandise or services.
Two responses: 1) Lower-skilled employees really aren’t as instrumental as you think, or more likely 2) it’s impossibly easy to find other lower-skilled workers, so there’s no competition to drive wages higher.
But the deeper question is: Why is a business responsible to make sure its workers aren’t living in poverty? The only interest a business has in that is in order to retain the employees it needs to continue providing goods and services and make a profit. Businesses aren’t charities.
When businesses treat their employees as disposable, as many businesses do not just to lower skilled employees, but to well-edcuated ones as well, or they pay them poverty wages, then those businesses are saying what they think the value of the employee is as a person.
I don’t think it is a business’ best interest to “treat their employees as disposable.” Income isn’t everything, but the businesses that pay the highest wages and provide the best working environment will attract the best of the workers they need. But they still have to do this and make a profit or they don’t exist and there go the jobs.
Paying a lower skilled employee a “poverty wage,” whatever that means, says nothing about the individual’s worth as a person. It says everything about what the company says the worth of a person’s skills are. People shouldn’t be looking to their employers to measure their dignity as a human being. All the employer can measure is the value of a person’s talents and skills as a contributing factor to the profit of the company. And the employer will either do that correctly and thrive or it will do so incorrectly and eventually cease to thrive.
It really is that simple except for those who neglect to mention that many business decisions regarding the pay and treatment of employees are made exclusively with the shareholders’ interests in mind.
But the question is why should it be otherwise? Profit is the animating factor, and whatever increases profit long-term should be the goal. Smart shareholders realize that their interest is tied to a company’s well-treatment of its employees, but you can’t force shareholders to be smart.
So we’re left with trying to find a solution to the problem of “poverty wages.” Artificially mandating a minimum wage lowers workforce participation and increases automation, which deprives people of both income and the dignity they can find in a job. And the fact is that many of our social safety net programs (which I am not in favor of eliminating by the way) end up benefitting people who actually may not need them. I can’t tell you how many times, when I was working as a cashier in a grocery store many years ago, people came in and bought steamed crab legs and lobsters with food stamps while talking on the latest cell phone and driving away in their cadillacs. Something is wrong with our definition of “poverty wages” when such things happen.
I don’t necessarily have the right solution. All I know is that artificial wage mandates don’t work, even though they sound really nice. I also know that raising taxes on corporations only increases the costs of goods and services. Something like the EITC with features to incentivize people to improve their skills and finally come off of it because they are making a better income is more promising, and it seems to require a less comprehensively totalitarian governance.
Massive regulations and a complex tax structure, fueled by an ever-increasing government actually end up hurting the very people you want to help. The solutions I think you favor make the problem worse and actually allow corporations more lobbying power to retain the ability to pay poverty wages. I suppose one solution would be to have the government just take over everything, but we’ve seen how well that works, as in not very.
I think you need to check your theories with reality. Yes, low skilled jobs can be instrumental to a business. Consider those who deal with customers and who flip burgers at a fast food restaurant. Also janitorial skills are instrumental to any business since the cleanliness of any establishment is important. In addition, whether there is a glut of low skilled workers depends on multiple variables and from my friend who owns his own business, he’s seen times when it is difficult to find low skilled workers and times when there is an abundance.
In addition, you say that it is not in a business’ interest to treat employees as disposable though you think it is ok to pay them poverty wages. And yet, workers of various skill levels have lost their jobs due to a company’s seeking to increase shareholder profits. I saw plenty of that when I taught because people would come back to college seeking to be retrained. Those lost jobs come because of downsizing or offshoring. But the very nature of our Capitalist economy says that workers are disposable. Anything that qualifies as a commodity can become disposable if a cheaper price for that same item can be found elsewhere. And, in a Capitalist economy, labor power is a commodity.
IN addition, are you being honest when you write
Paying a lower skilled employee a “poverty wage,” whatever that means, says nothing about the individual’s worth as a person. It says everything about what the company says the worth of a person’s skills are.
The issue here is that when a business pays poverty wages so that a set of its employees must depend on gov’t assistance to avoid severe deprivation of some of life’s essentials, it says a lot about what the business thinks of both the employees as people and their skill sets. If a business values a person, they won’t pay them poverty wages because they will want to keep them and contribute to their welfare. Of course when there is a glut of workers for given positions, the business doesn’t have to worry about keeping their current employees who work at those positions.
But your whole mentality of business being this machine and living in poverty as not diminishing a person’s sense of worth is sad. That however a business treats empooyees is ok because business is a machine communicates to employees that they are merely cogs, not people. And then living poverty knowing that neither your business nor the system cares while seeing how some want to cut the safety net programs that sustain you tells you that you are not worth much if anything. Such people easily find themselves feeling alienated and marginalized because of how responsive the system is to you depends on how much money you have.
See, we can easily say that a person never loses their intrinsic value, but that is not the issue. The issue is whether our intrinsic value is being recognized where we go. When businesses think nothing of it to pay poverty wages because that is what the machine of commerce allows for, that is business’ way of not recognizing the intrinsic value of their employee. And many employees are smart enough to recognize that our system and society values wealth over work. They see that when the concern for maximizing shareholder profits, shareholders who do nothing for the business and unless they bought originally issued stock have contributed no actual money to the business while the same business pays the employees the minimum required. Did you ever hear or read Chris Rock’s description of being paid minimum wage. He says it is like his employer comes up to tell him that the employer would pay him even less if he could get away with it. Such is not valuing the employee as a person.
We’ve grown up with this belief that our economic system is right and thus must work. But such a belief blinds us to our system’s unfairness, injustice, and how it dehumanizes many of its stakeholders. And how any Christian can support any system that is unjust and dehumanizing is beyond the Scriptures and makes our faith quite questionable to many an unbeliever.
Again, treating a business as a machine so that requiring them to pay decent living wages can be considered artificial says that one has not refected much on the system itself. And just as much as MASSIVE gov’t regulations can hurt the people we want to help, the absence of gov’t regulations can hurt them just as much if not worse.
Speaking of which…
$0/hr is definitely a poverty wage and always the true minimum.
Here is where you go off the rails. You assume the motivation behind the action. Maybe the business pays poverty wages so that a set of employees must depend on gov’t. Or maybe not. Maybe the business pays poverty wages because that is all they can afford. Maybe paying higher wages at the bottom requires higher wages throughout the organization to keep up morale and that would send the company under. Maybe they pay low wages to employees on a probationary period – the ones who prove themselves can move up. Rather than simply firing the ones who don’t move up, they can at least keep their low paying job until something better comes along. Maybe, those making that very low wage lack the skills to perform sufficiently valuable labor to earn more – so he hires his lay about nephew to help his brother out by getting Jr. out of the basement. There are 1001 reasons one might pay a “poverty wage” that have nothing to do with ensuring that employees must depend on gov’t assistance.
I value the undergrads in my lab and I pay them “poverty” wages. They are pretty grateful for those poverty wages. If I had to pay them a “living wage”, they would be out of work.
What fraction of minimum wage employees work for publicly traded companies? I don’t have time to look it up now, but my guess is that a substantial fraction of them are working for non-profits (churches, private schools, daycares), mom & pop retail (the florist, the bookstore, the coffee shop, etc…), and independently owned and operated franchises (McDs).
By the way, since when do shareholders contribute nothing to a business? Where do they get their capital? The fact that the original investors can sell their shares is what enables to the business to sell the share they do in the first place. Speaking of reality….
Because how much I am willing to pay for a service has nothing to do with how much I value the individual.
NYC is your standard? Really? I don’t think that the goal should be that one have no need of gov’t assistance programs. That strikes me as stupid frankly. The reality is that in different stages of life, you ability to contribute to your own care and that of others varies.
What is not speculative is that the LFPR has dropped with the increasing cost of compensation. Secondly, many jobs have been (and are being) eliminated by automation. Creative destruction has always been a thing, but historically, it had progressed gradually over generations. Now we are seeing occupations emerge and vanish on decadal timescales. Not everyone can keep up and contribute labor that is sufficiently valuable to command a “living wage”.
Tell that to the wide swaths of the permanently unemployed. The real minimum is and always will be $0. No amount of welfare can make up for the kick in the pants that comes from not being able to find any work period. By arbitrarily jacking up the cost of hiring someone because of fanciful delusions about the gobs of money just laying around is deeply irresponsible.
That’s dumb. You can understand what it means to be poor without being poor. In 2004 I was making supporting a family of four on $17,000/yr. Don’t tell me I don’t know what it means to be poor – I know about WIC, medicaid, and waiting in line for free shots at the public clinic. And yes, you can find housing cheap – last year I had a student living in a 2bdrm duplex for $300/mo. You can work minimum wage job and afford that.
But not all poverty is created equal. My situation was very different from the ex-con looking for work, the single mom trying to balance jobs and childcare, etc… You don’t help these people by requiring that high school kids and housewives looking for a bit pocket money get paid $15/hr. You make them unemployable. This is why wage subsidies are much better ways of ensuring the poor have a livable income.
This is because of a shift in how corporations can file. Now most corporations file as individuals – the S-corp. That created the discontinuity around 1980.
Or maybe individual businesses fluctuate on short timescales and cannot ride out multiple quarters of bad returns without going bankrupt. On the other hand, the government is much larger and average out the ups an downs of various sectors – in doing so, they can afford to skim a bit off the top of those doing well in any given year and redistribute that excess to those in need. An individual business has good quarters and bad ones. A business that pays too much in wages in good quarters will find itself out of business after a bad one or two.
That’s right. If a person can not do work that is sufficiently valuable to the business to justify the cost of compensation they must pay, the business can choose not to hire that person. That person is now making $0/hr. Again, you’ll notice that the LFPR for working age adults has declined steadily over the past 25yrs. The reason is that it cost too much to employ them relative to the skills they have to offer. So they don’t work. Better to pay them less so that they have a job and can develop skills and have the state subsidize their wage.
Perhaps then you should reconsider your ill-formed, naive, irresponsible economic/political views. When aiming for full employment via wage subsidies is “offensive”, you have a problem.
“if I was a nonChristian and I read these comments of yours, I would have no interest in hearing your religious views.”
Curt, the same could be said about a non-Christian reading your comments. Or anyone’s comments. That’s because faith comes by hearing the Word, not through discussions of economic theory.
Is that because I show concern for those being paid poverty wages? Do you realize how those outside the faith view us and why?
“Is that because I show concern for those being paid poverty wages?”
Why do you think that a mandated minimum living wage is the only way to show concern for those being paid poverty wages?
“Do you realize how those outside the faith view us and why?”
Which persons outside the faith? Most Muslims around the world aren’t objecting to Christianity because a large subset of evangelical Protestants in the United States object to socialists and believe free-market capitalism is the best economic system for the greatest number of people yet devised by human beings. The radical left in this country has shown how much it cares about how much we do for poor people by disinviting ministers to various events even though they preside over huge social welfare charities and ministries when it was discovered that the same ministers don’t believe two men can get married. And I could go on.
Again, when a business pays employees poverty wages, it says a lot about how the business regards those employees as people and their skill set. You reply that maybe that is all they can afford. But if businesses can’t afford to pay market price for the goods they consume, then they shouldn’t be in business. So why should we accept the fact that businesses pay poverty wages because that is all they can afford? You could answer that businesses pay market price for employees’ work but that would cause a business to regard employees as they do the commodities that they consume while operating. And that is a denial of the intrinsic value of the employee who is paid poverty wages. IN addition, we know that many corporations and banks pay poverty wages. And we know that it is tied to producing higher shareholder profits. In fact, increasing shareholder profits is a driving force for policy decisions in many corporations. One only needs to listen to employees of publicly owned companies to see what and who is sacrificed to produce higher shareholder profits.
As for the undergrads at your lab, you illustrate one of the dilemmas that exists with our current form of Capitalism: THat we are often forced to choose between being paid poverty wages or having no job at all. That is similarity between your undergrads and people out of school. But there are differences too and the people I talk to who are paid poverty wages aren’t as happy as your undergrads. When you write about your undergrads and imply that theirs is the rule for tall others who are paid poverty wages, it sounds like either you do not really know what you portray yourself as knowing or you are not really serious in this discussion. And that is further illustrated by your guess that the majority of them work for nonprofits, mom and pop stores, or franchises. Now I would agree with the last item however anyone who is aware of such franchises work knows that the corporations pass the expenses to the franchise owners who are put in the middle. And one way to raise the pay of those who work in franchises is simply tax the corporations to pay for those increasd pay. In the end, when you have people who are working full-time hours, who are homeless even when they are paid above minimum wage, then the system has failed. And this problem of full-time employees being homeless is across the country, not just in NYC.
And the same applies to how they pay taxes with whether they store capital in offshore accounts or they use states like Delaware and shell corporations to reduce their taxes. Now when you say that the amount of corporate income tax paid is due to the ability of corporations to file as individuals, were you referring to S Corporations or C Corporations? And when did this ability occur? You address these points so glibly without providing any documentation. And all of your answers simply defend how business operates without any reflection. And when you so easily brush off a documented example and because the example comes from NYC, you call my position that we should not need gov’t assitance programs for full-time employee ‘stupid,’ you sound like a mindless defender of the system. No matter what stage in life one is at, if one is working full-time, they shouldn’t have tobe homeless. And if they are, that, again, reflects on a failed system.
Prior to the French, Russian, and Spanish Revolutions, the Church sided with wealth and power. And that is what you are doing here as well as what the Church is doing here with its mindless defense of our current form of Capitalism, which I doubt if you could name. For the French and Spanish Revolutions, it was the Catholic Church that stood with wealth and power. With the Russian Revolution, it was the Orthodox Church that stood with wealth and power. Here in America, it is the conservative Protestant Church that stands with wealth and power. The result of those revolutions was suffering for those in the Church as well as the dishonoring of the Gospel as the Gospel was associated with wealth and power.
And here, the conservative Protestant Church sides with wealth and power by either remaining complicitly silent or, as in your case, a defender of a system that passes business expenses on to taxpayers while corporations do all they can to reduce the taxes they pay some of which help assist the people, some of whom are their employees, to live. You call my idea that businesses should pay employees so that they don’t need such assistance programs ‘stupid.’ Others would look at business’s role here say that it is a matter of businesses being responsible. In any case, your concern for the working poor is horrific. And when the conservative Protestant Church shares your concern, or lack thereof, it is one the reasons why we’ve lost the ability to evangelize outside of politically conservative circles.
See, you might know how businesses operate, though I don’t know as much as portray yourself as knowing. But you seem unable to look at our current system from the outside. At least that is what you demostrate here.
“Is that because I show concern for those being paid poverty wages? Do you realize how those outside the faith view us and why?”
So more people would come to Christ if more Christians were Socialists? You give yourself too much credit. Scripture is clear about how people outside the faith view us and why. It has nothing to do with economic theory. Do yourself a favor and read more Bible, less Marx. Detox, brother, you need to detox.
No it doesn’t.
That’s true. Some people do not have a very valuable skill set. The only things they can do can be done better by a robot or AI. Working has other value though even if that value isn’t fiscal. Companies can’t pay for non-fiscal value, but they can provide jobs. Governments can provide subsidies that can help people without marketable skills find employment.
Agreed. But you aren’t arguing for market wages for employees. You are arguing for above market wages. The question is why a business should be willing to pay above market rates for services. Do you do that?
Because reality has a funny way of imposing itself.
Paying exchanging money for service at a market rate (i.e., pay that matches the value of the service) does not entail that the one providing the service be treated like a commodity. Wage subsidies sever the link between skill set and ability to get by.
No it isn’t. When I pay my son $10 for mowing the lawn, I am not saying anything about his intrinsic value.
No. We don’t “know” that. You have asserted it. Which banks pay “poverty wages”. What is a “poverty wage” if it isn’t a wage that leaves you under the poverty level (which you disputed above)? How about we go with minimum wage which you asserted is not sufficient for a person to get out of their parent’s basement (unlike you in the 1980’s evidently). That is a small fraction of workers, and most of those are not head of households. Do you really know that “corporations” (S or C?) and banks (many of which are corporation right?) pay “poverty wages”? I’m dubious given what Wells Fargo pays their tellers.
Given that shareholders hand over their money to corporations in order to get more money back, those companies better be producing a profit! I do want to retire some day.
Pretty sure that people in non-capitalist countries have the same choice…particularly those without skills in high demand.
No. You assumed that. That’s on you. My point is that a one-sized fits all solution is going to hurt a lot of people. A lot of people working minimum wage jobs aren’t in poverty, don’t “need” more, and lack the skills to get more. That’s OK. It says nothing about their value as people. Raising the minimum wage would hurt these people by putting them out of work (as we see with the drop in the LFPR). Wage subsidies are a way to make sure the money flows to the people who need it regardless of the value of their skill set.
And yet you don’t present any evidence to the contrary. It should be fairly straightforward for you to show what sectors minimum wage workers are in. I bet a lot of them are the minimum wage church secretaries, clerk at Jim Bob’s Boutique, or working as a lifeguard at the neighborhood pool. I’m going to take a flyer and guess that most of them aren’t working for “Banks”. But I could be wrong, and if you have evidence to the contrary I would love to see it.
Virtually all franchises (the individually owned and operated ones) are corporations and they are taxed. Of course they file as individuals, so they show up in your stats as individual earnings rather than corporate earnings as they file as S rather than C. I agree though that the state should guarantee workers a minimum standard of living. I’m glad to see you are coming around. Something along the lines of an expanded EITC or a negative tax rate that gradually goes positive so as to diminish the marginal rate would be very welcome. I would pay for this with an energy tax. It is much better than a demanding companies pay a “living wage”. How would this work – you’re single, so you get 20k/yr; You have six kids, so you get 45k/yr… seriously?
Yes, when a NYC worker makes 36k/yr and can’t find a place to live, there is a problem. Not sure it is with the wage though. Maybe it is with the arcane rent stabilization and zoning rules that makes it harder to build affordable housing? Maybe it is the intransigence of workers making $36k/yr and refusing to commute from NJ? Maybe it is the greedy rich gobbling up all the housing even when they don’t live there. Maybe it is some combination of all of it. But whatever the case, this includes unionized city workers making a wage that puts them well above the poverty line. Maybe the problem isn’t greedy corporations holding on to profits. I am very skeptical that this is a problem “across” the country. Given that only about half of the homeless have any reportable income and the median annual income for the other half is something like $9k/yr, I doubt that there are that many full time workers among this group. A higher minimum wage would likely make it harder for these folks to transition from shelters to independent living and a job. Making jobs easier to get (and to offer) and coupling that with a wage subsidy would do wonders for the homeless who aren’t there as a result of mental illness or addiction (most likely by keeping them from becoming homeless in the first place).
Your ability to divine the extent of my reflection on these issues is truly remarkable. Corporate taxes fell sharply (notice the discontinuity in the chart of the share of taxes that come from the corporate tax rate) because corporations started reporting their income as personal. I believe the law changed around 1980 and the trend really took off around 1985. There were significant changes in the law that led to the explosion of the LLC as well.
Your reading comprehension skills are poor. I wrote, “NYC is your standard? Really? I don’t think that the goal should be that one have no need of gov’t assistance programs. That strikes me as stupid frankly. The reality is that in different stages of life, you ability to contribute to your own care and that of others varies.”
You inferred from that I think it is OK for full-time workers to be homeless? Really? That implies I’m a defender of the system (mindless or not)? The “system” really provides a guaranteed minimum income for all families? What system are you part of? That certainly isn’t the case in the US. Instead we have a patchwork of mandates and benefit programs that often work against each other and make it harder to climb out of poverty. Elimination of minimum wage laws coupled with wage subsidies would reduce poverty and make advancement easier. The fact that someone is willing to work full time does not entail that the work that person can do is sufficiently valuable to earn a wage that guarantees sufficient income to afford basic food and shelter.
Supporting wage subsidies instead of wage mandates is totally like siding with the Tsars. Right.
Yes, because when people think of corporate america, they think PCA. For better or worse, the conservative protestant church is irrelevant to the broader culture.
Yes. Because support for a negative income tax or other form of wage subsidy that guarantees a minimum standard of living is totally the status quo, and when people think of conservative protestants their first thought is “support for wage subsidies – what a jerk!”. Obviously my support for wage subsidies shows no support whatsoever for the working poor, reducing barriers of entry to the workplace, or making sure that work “pays”. Take off the ideological blinders. The fact I disagree with you and know that your irresponsible rants would do more harm than good does not imply that I don’t care for the poor. As usual, you have no idea what you’re talking about.
You say that pay represents how the business values only the skill set of the employee. But doesn’t that prove my point. For by only recognizing the skill set of a person, the intrcinsic value of the person is either denied or does not count—there is no difference between the two especially for the person living in poverty. How much more mechanistic can you get? How can your economic system be just when it doesn’t recognize the intrinsic value of stakeholders such as workers while whitewashing the consciences of the owners whose payrolls reflect how much they want to share with others.
Realize that economics is not a natural science, it is a behaviorial science Thus, we shouldn’t reduce economic decisions to being that of a machine. Such is only flawed attempt to cover a multitude of sins. When full-time workers are paid poverty wages so that business needs help from the gov’t in sustaining these workers, it is because we have shown more affection and loyalty to the economic system that allows for that than for people. And that is all you have said. And, as I documented, minimum wage isn’t the highest level of the poverty wages as demonstrated by one full-time employee who earns over 30K and is homeless. Do you really think that similar situations don’tt elsewhere? That is not according to my friends whose churches work with the homeless and I don’t live in NYC.
All of this is about how we share wealth in its distribution. And our system revolves around consolidating wealth than sharing it. Our system is based on valuing wealth more than work. So despite the fact that owners can pay more if they are willing to receive less from the business, your economic system works against that. Paying accordinbg to market value in a fixed system is no excuse for not paying employees more.
So so what if I am arguing for above market wages. If your market wages allow for employees to live in poverty and even be homeless, then why should I value your market? Is the market inerrant in terms of setting value? If it is, then is it is either a machine or is based on omniscience? But seeing that the market is part of economics and economics is a bahaviorial science and seeing that only God is omniscient, it is time to question the economic system that creates such a market rather than assume that it is without flaw.
Those who can so coldly say that wages are just part of an economic machine are not those who are living in poverty. Nor do they think that the voices of those who live in poverty count. All that counts to you is maintaining your non self-sustainable system. For it isn’t that having gov’t assist on payrolls will destroy our system. It is the basic philosophy that enables acceptance of such a practice that makes our economic system self-destructive. It is the idea that to make our economic system succeed, gov’t’s job is to be business’s safety net while, which you haven’ really answered the question about corporate taxes, corporations seek to avoid paying taxes and so money is held in offshore accounts as well as corporations use shell corporations to reduce the amount of taxes owned.
BTW, you never distinguished how tax are paid by S and C Corporations. Nor did your explanation account for steady decrease in taxes paid by corporations during the 1970s. So you’re still responding glibly.
Payrolls may reflect what they can share with others and the value of the service being rendered. Wage subsidies would effectively ameliorate the problem of the working poor without distorting the market.
Your first sentence does not entail the second.
Or maybe it is that some of us really care about the poor and recognize that (1) there is dignity to work and (2) not everyone can do work that is adequate to support them.
You haven’t documented that $30k is a poverty wage just because someone in NYC can’t afford rent there. As I noted, their inability to afford rent could be due to a number of factors that have nothing to do with the union wage he was getting from the city (not a corporation!). Why doesn’t the uber progressive NYC pay him a higher wage? They are greedy and just want to hold onto the profits? Maybe the problem isn’t with wages but with the cost of housing? I am very doubtful that there are large numbers of full time workers outside of NYC and San Francisco that cannot afford a room to rent. I do think that homelessness is a problem – particularly for single moms who have a hard time of holding onto a full-time job with the responsibilities that come with being a parent. Again, wage subsidies are helpful here.
Minimum wage is a terrible way of redistributing wealth. First, not all of the benefits go to the poor in the first place. A lot of (most?) minimum wage earners are not head of households. Second, they require that the person get a job. As the wage goes higher so does the competition. Wage subsidies fix that. Note, that significant wage subsides are not our current economic system. I have repeated this many times. Your repeated assertions that I am just defending the current system (for whatever reason) is wrong (like nearly everything else you’ve written). My proposal again is that we eliminate the minimum wage and replace it with a smoothly varying negative income tax that guarantees that everyone willing to work full time is able to maintain a decent standard of living. The motivation to earn more by working hard and moving up the ranks comes from the fact that there is no sharp cut-off (a major problem the poor have now in that earning too much can lead them to losing money). A smoothly varying rate is simple to put into practice in the computer age and would do a lot to lift the working poor out of poverty, increase labor force participation, and ensure that benefits flow to those who need them.
Because paying above market wages will drive people out of work. Businesses fluctuate – profits are not a given from quarter to quarter, but wages are sticky. If your wage takes up too much of your income you are likely to exhaust your cash flow and go under. Further, if one has to pay a person $30000 for what a robot will do for $20000, guess what? That person will be out of a job. That’s a bad thing.
No, but it is better than any other valuation tool we have.
No one assumes markets are perfect. They are however superior and the rise of market economies has coincided with unprecedented prosperity expanding for most people -hunger is down, wars are down, infant mortality is up, life expectancy is up, wealth (worldwide) is up. The fraction of the world living in abject poverty is down. Freer trade and markets and the neoliberal capitalist consensus has a lot to do with that. Countries like Venezuela and Zimbabwe that have tried to buck the market have payed a very heavy price.
Since when is support for a hefty safety net “cold”. Again, you have no idea what you are talking about. I suspect that if given the choice between a $15/hr minimum wage and a guaranteed minimum salary supplement, most would want the guaranteed minimum salary support. I think most realize they wouldn’t be getting the job at $15/hr.
You’re still confused here. It doesn’t necessarily hurt business to increase wages (especially big business). You could define a minimum wage of $1M/hr, and they would pay it and prices would reflect that. You would also see automation kick a lot of people out of work and small businesses wouldn’t survive the transition. High minimum wages created a high barrier to entry.
You are confused. Money earned by corporations in other countries is taxed there and the money is left there because the US charges such a high rate to bring it home. They aren’t putting money earned here abroad. But that is irrelevant. Even if we taxed money earned abroad and held abroad, it wouldn’t shift our needle that far.
As I noted, corporations that file as S Corps (and LLCs) pay taxes as individuals – this has been possible since the 1950’s but changes in the law in I think it is ’72, ’78, and ’83 resulted in a dramatic shift in the number of companies paying individual income taxes rather corporate income taxes (the number I recall was something like 400% increase from 1975 to 1985). Anyway, when you look at charts that show what fraction of taxes are paid by corporations, they are counting corporate taxes. These taxes do not include non-corporate income taxes that corporations pay. This is especially relevant for S corporations because they don’t pay any taxes at the corporate rate. They pay all of their taxes as individual income taxes. The shift you see is driven by how taxes are labeled, not a shift in the total amount of taxes paid.
I would much prefer to see us shift away from taxing labor (payroll taxes/FICA) to taxing energy usage. This has a few advantages. First it makes it cheaper to compensate employees making the motivation to automate or send jobs abroad weaker. Second, it makes energy more expensive discouraging shipping and automation as well. Third, it encourages innovation in how we use energy – making us more efficient. Coupled with a negative income tax and elimination of the minimum wage, we would see a marked decrease in poverty and increase in labor force participation. Not utopia, not perfect, and certainly not inerrant. But probably better than the status quo you defend of high barriers to employment entry, byzantine aid programs, and steep marginal hits for the working poor. Obviously you just hate poor people.
And right on cue, Wendy’s is adding self serve kiosks as they prep to downsize their workforce in response to minimum wage hikes. Low skilled workers are going to find it even harder to break into the labor force and develop the skills they need to command a living wage. I guess moral posturing is more important than actually helping people.
Here’s a progressive case for minimum wage laws:
“It is much better to enact a minimum-wage law even if it deprives these unfortunates of work. Better that the state should support the inefficient wholly and prevent the multiplication of the breed than subsidize incompetence and unthrift, enabling them to bring forth more of their kind.”
-Royal Meeker, Woodrow Wilson’s commissioner of labor.
But those of us who support wage subsidies instead are the cold ones…right.
First, why speak in such generalities as if every business really cares about every employee? You did that when I documented how corporations are paying less of the tax burden. Without any documentation, you stated that it was because more filing as individuals. That might have been true of S corporations, but the real money is in C corporations and they didn’t file as individuals. In addition, you didn’t mention how corproations create and use shell corporations in states like Delaware to legally wipe off profits from their books to reduce taxes or how corporations put money in offshore accounts to save on taxes. Thus, some of your answers are simply glib apologetic statements that beg the question of the integrity of the system and its participants.
So you add that paying the poor more would hurt the market like the ecosystem that runs on a delicate balance. Thus, according to you, poverty wages are mandated. Not only is this another glib argument, a hypothesis worthy of testing as well, it is another argument against our market. After all, for our market to work, low skill workers must choose between poverty wages and unemployment. And for them to live off of poverty wages, taxpayers are required to chip in even when some businesses in that market do all they can to avoid paying their fair share in taxes. Thus, I, as a taxpayer, am required to pay taxes so that businesses can give low skill workers that option.
Don’t you see that you are agruing against your own case? Why should taxpayers and low skill workers tolerate the demands of the market which you provide?
If there is a dignity to work, as you claim to have, then the system that benefits from that work will recognize it. But as it stands now, the market does not recognize the dignity to work by the poverty wages it pays and the disposable status workers have. When business passes the payroll buck onto the government, they are not recognizing the dignity of the worker. Again, another glib answer that begs the question of the integrity of the market and its business participants. What we have here with your market is situation where many of the same businesses that protest government regulations and wage requirements in the name of the “market” are also proudly “recognizing” the dignity or work when they pay poverty wages that require the government’s help in fairly compensating those workers. All you are doing is to make me associate the word ‘racket’ with the word ‘market.’ Because that is what you are defending. You are defending the ‘free racket.’
Finally, we already had this dicsussion abouve minimum workers. The majority of them are not 16-year-old burger flippers. The majority are 20 and over with a substantial percentage going to those over 25. And it isn’t just minimum wage workers who are being paid poverty wages. I’ve already documented some of the problems with this claim about who minimum wage earners are. If you are not going to respond in any other way than giving glib answers, why are you writing back? While you assume that the system is fine, what you propose only shifts the financial responsibilities that business has for certain groups of their own employees away from business and to the general public–for that is what your negative income tax proposal does. Shift the payroll responsibility from business to the general public while business does what it can to shift the tax burdern to the general public as well. It seems that you really don’t know what you are talking about. You really don’t know how to criticize the system and understand its faults. You seem to only know how to repeat some of the systems mantras. Please respond when you learn more about what you claim to know about.
Which form of socialism are you referring to? LIke Capitalism, Socialism has various forms. And, btw, Romans 2 is quite clear about how the actions of the religious can cause unbelievers to curse God. The scriptures give multiple answers as to why people respond to God the way they do. And considering how economics is a behavioral science and thus deals with human actions, when we defend unjust actions while claiming to be Christians, we will dishonor the Gospel by causing people to curse it.
“Which form of socialism are you referring to? LIke Capitalism, Socialism has various forms. ”
Ok, I readily admit I am not aware of all the nuanced views that justify using the force of law to redistribute wealth within a society. I’m speaking of socialism generally as an antithesis to capitalism. My point is that your (or my) economic views have little to no bearing on the power of the Gospel.
“And, btw, Romans 2 is quite clear about how the actions of the religious can cause unbelievers to curse God. ”
Encouragement for you: talk to your elder and/or pastor about what Paul is communicating in Romans 1 and 2.
“The scriptures give multiple answers as to why people respond to God the way they do.”
I submit to you there is one answer expressed in different ways by fallen humanity. It is that man puts himself above God and fueled by this he looks for any other way possible to enjoy life without bowing a knee. To be his own god. See the first four commandments and the first question of the WCF shorter catechism. Also Romans.
” And considering how economics is a behavioral science and thus deals with human actions, when we defend unjust actions while claiming to be Christians, we will dishonor the Gospel by causing people to curse it.”
The burden is on you to demonstrate where Christians have a Biblical mandate to work with government to ensure the redistribution of wealth. After all, this is what you are advocating for in your posts. You are just as wrong in your views on government and Christians together as any right-wing social engineer you decry. Go ahead, be a Socialist. Stop trying to burden other Christian’s consciences with your views by attempting to wrap them in Scripture.
Let me ask this, did the old South’s practice of slavery or the abolition movement that opposed it have no bearing on the power of the Gospel?
Let ma also ask this: Morally speaking did all Jame Madison’s wealth belong to him though he relied heavily on slavery to obtain a good measure of that wealth?
Another question I have is this: Did the Roman Empire have programs that helped the poor when Jesus said ‘give unto Caesar what is Caesar’s’?
My last question is this: Does the regulative principle apply to what government can do?
Let me ask this, did the old South’s practice of slavery or the abolition movement that opposed it have no bearing on the power of the Gospel?
This question doesn’t make sense. The only thing that has bearing on the power of the gospel is the gospel itself. If you are asking whether, from a human perspective, certain practices might possibly make certain people more willing to hear the gospel, that’s another issue.
Let ma also ask this: Morally speaking did all Jame Madison’s wealth belong to him though he relied heavily on slavery to obtain a good measure of that wealth?
To the extent that southern slavery was based on kidnapping, racism, and offered no possibility for the slave to escape slavery, it was an unjust and immoral system. The extent to which James Madison’s wealth “belonged” to him, I don’t know. I am unaware of where the Bible says that in its system of slavery, the wealth belonged to the slave, but I could be wrong. Texts?
Another question I have is this: Did the Roman Empire have programs that helped the poor when Jesus said ‘give unto Caesar what is Caesar’s’?
There were social programs in the ancient Roman Empire, but if Jesus’ command to give to Caesar is an endorsement of those, then his command also endorses infanticide, military conquest of all kinds, idolatry, and a host of other things the Roman Empire paid for.
My last question is this: Does the regulative principle apply to what government can do?
The regulative principle addresses worship and the government to the extent that if the government imposes something not in Scripture on worship, the church is to ignore it. It doesn’t say anything about the redistribution of wealth.
If there is a dignity to work, as you claim to have, then the system that benefits from that work will recognize it. But as it stands now, the market does not recognize the dignity to work by the poverty wages it pays and the disposable status workers have.
You know, for someone who rails against capitalism, you are awfully quick to equate the dignity of work with capital. There are other ways to recognize the dignity of work.
I do not assume, nor do I think it is relevant that every business cares about every employee. You asserted that corporations are paying less of the tax burden. I’ve seen that claim floating around on certain progressive blogs recently as Sanders has included it in his stump speech. The reason for the discontinuity is due to changes in law that allow the majority of corporations to file as individuals – the LLCs and S corporations. The overwhelming majority of corporations are S corporations. If you have evidence that the sum of taxes paid by LLCs, S corporations, and C corporations is less today (as a percentage of the tax burden) than in say 1960, I’m all ears.
I do not assume the integrity of the system or its participants. I’m simply pointing out that if your position ( support for a higher minimum wage rather than wage subsidies) were enacted the poor would be worse off. You don’t seem to understand why incorporation in Delaware is attractive to companies (it isn’t about hiding profits – it is about federalism), but it is a red herring. You assertion that corporations “put” money in offshore accounts to save on taxes is also false. Insofar as they move money from the US to accounts abroad to keep from paying taxes, they are violating the law and will face serious jail time if caught. The latest release of the Panama papers indicates that isn’t happening among US corporations. You have confused international companies that make money in other countries and choose not to bring that money back to the US because of the insane taxes we charge on that. These are products and service produced and sold abroad. It is not the shipping of US profits abroad.
That is not at all what I argued. The market is just a tool for assigning value to goods and services. If you mandate prices higher than the market assigns, you will get a shortage. Not everyone has valuable skills – subsidizing the gap between the value of their skills and their cost of living strikes me as just.
Speaking of glib – your understanding of tax law is pretty naive. But really beside the point. If companies paid higher taxes, would that make a difference? Or is it just that they try to take advantage of tax breaks that offends you. Am I acting immorally by taking advantage of the mortgage interest deduction, dependent tax credit, and charitable giving deduction to reduce my tax burden? Besides, the “taxpayers” who fund this are overwhelmingly from the top-20% (a fair share of which are corporations).
That’s simply not true. Dignity is not the same as fiscal value.
Right. The market assigns prices to goods and services.
This is just incoherent babbling. Try again.
I never said they were. What I said was that many (most?) were not head of households.
Like I said, most of these minimum wage earners are not heads of households.
In the hope that you will set aside your priors and address what I actually write. I’ve not claimed that most minimum wage earners are burger flippers, I’ve claimed that a substantial fraction are not head of households. In other words, raising the minimum wage is not a very targeted way to help the poor. In addition, it raises the barrier to entry and leads to a shift to companies using fewer workers (who do you think Wendy’s kiosks are displacing?).
I’ve never said that and it is irrelevant to the case I’ve made for wage subsidies in place of a minimum wage.
Curt, is this one of those conversations where you will never concede, regardless of how effective interlocutors are at disassembling your line of argument (sdb and Robert)? Because it sure seems that way. Rather than go down a twisting path of more and more questions asked and answered, please let me just come back to this one. Where is the Scriptural mandate for Christians to tinker with the economy in the name of God? Can you at least point me to a published source?
Are you pointing out an inconsistency in your argument? After all, am I talking about the consolidation of capital by workers or am I recognizing that workers deserve more than to live in poverty?
But the majority of the richest corporations are C Corporations. And so with these corporations using shell corporations in states like Delaware and Nevada to artificailly lower what they owe in taxes, all of that becomes one of the reasons why corporations are sharing less of the tax burden. The same can be said when corporate assets are stored tax havens. See, that with the ability of S Corporations to file as individuals are 3 reasons why the corporate tax burden is what it is. There isn’t just one reason. And yet, you glibly stated the S corproations ability to file as individuals as the only reason why corporations are paying less in taxes.
BTW, your statement about assuming the integrity of the participants is not just lame, it is disingenuous. To say that some corporations use these tax loopholes is a safe statement especially over 285,000 shell corporations used share the same address in Delaware (see http://freebeacon.com/issues/delaware-address-home-200000-shell-companies-including-hillary-clintons/ ). Likewise, your claim that corporations would not store money in offshore accounts because it is illegal and people could risk jail time is simply meaningless. You literally wrote:
You assertion that corporations “put” money in offshore accounts to save on taxes is also false. Insofar as they move money from the US to accounts abroad to keep from paying taxes, they are violating the law and will face serious jail time if caught. The latest release of the Panama papers indicates that isn’t happening among US corporations. You have confused international companies that make money in other countries and choose not to bring that money back to the US because of the insane taxes we charge on that.
Are saying that none of our corporations would break the law because of the fear of jail? Then why do US corproations store money in offshore accounts to avoid paying taxes (see Or more directly, why did Bloomberg press say just the opposite of your claim to the tune of $2.1 Trillion (see http://www.bloomberg.com/news/articles/2015-03-04/u-s-companies-are-stashing-2-1-trillion-overseas-to-avoid-taxes )? In addition, why have our financial institutions been found guilty of fraud and moneylaundering (see https://www.rt.com/business/181724-bank-of-america-17-billion/ and http://www.theguardian.com/world/2011/apr/03/us-bank-mexico-drug-gangs )? Note that the government has not persued criminal penalties for the heads of these financial institutions.
There is no reason to further discuss this with you since you seem bent on denying reality. It is bad enough that what you espouse is that government should be business’ handmaiden. But when deny what has been well-known and has been clearly documented, you give too much evidence of not wanting to have a serious discussion.
How does incorporating in Delaware affect one’s federal tax burden?
Corporate taxes aren’t paid on assets are they? I’m pretty sure they are only paid on profits. There are other taxes that may apply to assets, but the corporate taxes you see in those charts are only on profits.
Your three reasons that the federal corporate taxes as a fraction of the revenue to the federal government has declined are that:
1) corporations can file in Delaware
2) assets are stored in tax havens
3) many corporations pay the individual rate instead of the corporate rate.
You inferred that #3 is the only reasons that corporations are paying less in taxes. I made no such claim. My claim is that a significant part of the drop you saw in the 70’s and 80’s was due to relabeling where the money was coming from.
As are your reading comprehension skills. I wrote, “I do not assume the integrity of the system or its participants.”
1) If by tax loopholes you mean taking advantage of tax breaks, then you need to explain why this process is unethical or why it is wrong to legally seek to minimize your tax liabilities. How is it different in other words from taking advantages of the mortgage deduction or child tax credit?
2) The incorporation in Delaware is not to avoid federal taxes. It is to avoid state taxes. State tax law varies dramatically from state to state. A NY resident setting up shop in Delaware so that money made and spend outside of NY isn’t taxes at NY rates may or may not be a nefarious thing to do, but it has absolutely nothing to do with federal corporate tax revenue. This is a red herring.
I didn’t claim that corporations would not store more in offshore accounts. I claimed that they wouldn’t move profit generated in the US to accounts abroad to avoid taxes. The Bloomberg link is not referring to money made in the US being moved to offshore accounts to avoid taxes. Microsoft, Apple, and IBM are not making money in the US and hiding it abroad. What they do is make money in the EU, China, and India, pay taxes on it there, and then leave it abroad because of the cost of bringing it back here.
Neither of the cases you pointed to were connected to tax avoidance. So my point stands. The drop in corporate taxes is not due to moving profits generated in the US abroad to avoid paying taxes. The bulk of the drop in corporate taxes relative to individual taxes is largely driven by the huge shift of small companies paying at the individual rate rather than corporate rate. Your claim about Delaware is wrong and your claim about offshore accounts is wrong. If you think that an American who sets up a company in another country, turns a profit there, and leaves the profit there has an obligation to repatriate that money here, you need to make that case. It isn’t obvious why that should be to me, nor is it clear what bearing that has on a discussion of the relative merits of wage mandates versus wage subsidies.
So far every objection you have raised has been false and/or a red herring. The idea that a more progressive income tax that ensure that even those who lack valuable skills can make a living is somehow wanting to be business’ handmaiden is absurd. If you want to engage the arguments I make for this instead of your ideologically driven reading of what you think I mean by what I write, I’m happy to continue.
You can ignore the documentation that I have provided if you want even though it would answer your questions as wellas your accusations. Again, you are content with glib defenses of the system and their abusers. That is fine. But you are living in an ideological world when you do so. The real world is different. And as I wrote, there is nothing to gain in further dicussion when you view the government as being the handmaiden of business.
I read each article and pointed out why they are red herrings. Delaware has nothing to do with the federal corporate tax take. The money laundering case for drug cartels has nothing to do with US companies shipping US profits abroad to avoid tax liability – my point isn’t that big companies never do anything wrong, but rather that such activities are impossible to do without getting caught. Countrywide’s loan shenanigans (transferred to BoA when they purchased CW) also are irrelevant to the question of whether US corporations unethically avoid taxes by moving funds abroad. You are confusing the $2.1T in profits generated abroad and not brought back to the US with fanciful notions of evil, greedy corporations sneaking US profits to sheltered accounts. I’ve already gone over this. If you think I’ve misrepresented the articles, explain how. Describe how setting up a shell corporation in Delaware to avoid taxes in one’s home state has any affect at all on one’s federal income tax liability. Further, document the fraction of people living below the poverty level that are working full time and would be lifted out of poverty by a higher minimum wage (assuming they didn’t lose that job or see their hours cut. Then document the integrated tax revenue from S-corporations and combine that with the C-corporation tax revenue in your plot to demonstrate that the fraction of the tax burden paid by corporations has actually dropped. This isn’t glib, it is a sincere request that you back up your assertion that corporations don’t pay as much in taxes as they used to. You made the assertion, the burden is on you to back it up. So far, I’ve gotten bluster and accusations of glibness.
I’ve proposed a rather radical overhaul of the system because I actually care about helping people gain employment and have sufficient income to live well. I dissent from our current system of relying on wage mandates with a complicated patchwork of benefits with high marginal costs for those trying to climb out of poverty. A smoothly varying wage subsidy funded by an energy tax (in lieu of FICA) would help ameliorate the growing gap between the value of the skills of many abled bodied people and the cost of automation. Tweaking wage mandates is a century old solution that shows very little evidence of working. The reason is that it is not directed (people who don’t need it get it – the proverbial middle class high school kid/college student earning gas/beer money or the housewife looking for something to do) and when it is raised too much, it displaces workers – as evidenced by the drop in the LFPR.
That’s your false characterization. Wage subsidies are not a benefit to business. The business will be fine regardless of how the poorest 10% do. I suspect that businesses will be fine even with a draconian $15/hr minimum wage…at least big businesses. Startups and small businesses that are service heavy will suffer and certain classes of jobs will become extinct. Wage subsidies would be a huge benefit for the poor though as it would guarantee a minimum standard of living regardless of one’s skills. Much better than your rather cruel ideologically driven crusade for a system that keeps the poor locked in place.
I’m curious though, what ideology is it that supports a guaranteed minimum income for all people and wants to see everyone who is able work? I’d like to know which ideology I’m blinded by? An addiction to reason perhaps?
No, you didn’t show them to be red herrings. Rather, you use your limited knowledge to deduce. There is plenty of other documentation that points out this well-known problem and the only person it seems not to be well-known to is you. You use deduction to assert that corporate leaders would not store money in offshore accounts and such but the fact is, they do and it is for tax purposes. And you’ve done this before. When I first mentioned minimum wage workers being repreented by the government, your first response was why should that be an issue when they are mostly 16-year-old burger flippers. That was just the beginning of your flippant answers
And your overhaul simply involves a transfer of public wealth to business.
In short, you claim to have an expertise that you really don’t have. What. Do you think that I have no friends in business whose own experiences contradict some of what you’ve written here? For me the conversation is over because you won’t look at the facts on the ground and you claim to have more knowledge than you actually have.
Well obviously I’m too dense to get it. Explain to me how incorporation in Delaware lowers a corporation’so Federal Corporate tax liability.
I didn’t say the don’t store money abroad. I said they don’t send profit generated in the US abroad. The 2.1T you referenced is money earned abroad and left there.
Ok, how about this. Most minimum wage earners are not head of household or in poverty, thus raising minimum wage is not a targeted way of helping the poor.
No. It is a way to make our tax system more progressive and transfer wealth from the richest 20% and corporations to the poorest 20% (for the most part – folks from 20-40% would get some to reduce the marginal hit).
I have made no claim about expertise. I’ve simply pointed out your understanding of the difference between state and federal tax, s&c, and foreign profits not repatriated and hiding domestic profits abroad.
Given your penchant for drawing the worst possible motivations for all I write, I find the fact you have friends curious. Why would their experience bear on the total tax take from a and c corps in 2016 compared to plain corporate tax in 1966? Why would the fact that incorporation in DE be to (among other reasons) limit state rather than federal taxes be relevant to your friendships?
I make no claims about my knowledge or expertise as you falsely asserted above. That is very uncharitable. Nor have backed up the facts you asserted with evidence. Try again.
sdb said, “Yes, when a NYC worker makes 36k/yr and can’t find a place to live, there is a problem. Not sure it is with the wage though. Maybe it is with the arcane rent stabilization and zoning rules that makes it harder to build affordable housing?”
How timely – http://www.nytimes.com/interactive/2016/05/19/upshot/forty-percent-of-manhattans-buildings-could-not-be-built-today.html?_r=0
“New York’s zoning rules were intended to create less cramped quarters, but they also have consequences for the number of aggregate apartments in the city. Such limitations can quickly decrease the supply of housing, and most likely drive up rents. If every tenement in the city were reconfigured in these ways, they would be less crowded, but there would also be fewer apartments to go around. “
@cvd But of course boosting the minimum wage will totally result in expanding the supply of housing! I think the city should pay their workers $100/hr. No make that $1500/hr. Of course the city government is just a greedy rightwing organization that wants to incorporate in Delaware so they can stash their profits in the Caymans… I guess unionized city employees will just have to stay homeless until Curt can talk some sense into them….ha!
Thanks for the link.