Just Say “NO!”… to Corporate Welfare
Part 1: The Minimum Wage
Sections within this article:
2. What’s Wrong the Minimum Wage?
3. What Alternatives Do We Have?
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No one likes a free-loader. In America we are raised to believe that each capable person must work to earn their keep, that asking for hand-outs is an embarrassment, and that welfare is the sleazy meal-ticket demanded by shameless and lazy minorities who are too busy doing drugs and having babies to give a damn about making an honest living. “No sir, welfare folks just ain’t the kinda people we want in this neck o’ the woods… y’all ain’t welcome here! Now scram!”
Of course, right-wing conservatives are the ones screaming the loudest, and their words of scorn play like battle hymns to the struggling lower- and middle-class Joes and Janes who never seem to get a full night of sleep, muchless get ahead. Moreover, they have a good point: The able-bodied should not expect the rest of us to carry their load, or even any part of it. There is plenty of evidence that a small percentage of the population does indeed take advantage of the system: They are too far into alcohol, drugs, and other vices; they are too lazy, too promiscuous, too irresponsible; the taxpayers should NOT have to subsidize such behavior! Any politician (Democrat or otherwise) who supports such a taxpayer rip-off is scoundrel.
What’s even worse are the liars and the hypocrits: The ones who yell and scream, and preach and speech, and pretend to want to end these abuses but actually support and defend them time and time again. So the American people should know this: Nearly every state and federal representative has and does vote for massive welfare abuses over and over. But these votes are not for programs which allow some urban mothers to collect a few thousand in annual benefits. These votes are for massive, multi-billion dollar give-aways to corporations across America, and even overseas. These are votes for Corporate Welfare in its many guises and, even though it costs the taxpayers hundreds of billions, rarely is a voiced of ire seriously raised against it. Corporate Welfare is dirty, rotten, spineless, politics-as-usual where the biggest thieves blame their victims, and somehow hold their heads up in smug satisfaction.
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What is Corporate Welfare?
Corporate Welfare is the term applied to an incredible array of give-aways and subsidies enjoyed by entities which are themselves fictional creations of law. These welfare programs are limited only by the creativity of the lobbyists, accountants and lawyers who dream them up, and the audacity of the legislators who sponsor them.
Want some concrete examples?
1. Special Tax Breaks
Tax bills which give preferential credits and/or deductions to specific industries or even a specific company. These include reduced state and/or federal income taxes, reduced property taxes, and waivers of fees (i.e. development fees). Don’t you wish YOU could get a “no tax for [your name here]” section added quietly to the next omnibus bill?
2. Cost-Plus Contracts
The standard for-profit rhetoric includes the justification “the guy taking the risk deserves whatever profit he can make”. So why are defense contractors (and other large corporations) allowed to make ANY profit at all on so-called “cost-plus” contracts which have become the standard when dealing with the Feds? Cost-plus contracts essentially GUARANTEE a stated profit for the contractor, regardless of how inefficient, incompetent or corrupt they are. Don’t YOU wish you could have a cost-plus contract backed by the full faith and credit of the U.S. Treasury?
3. Externalization of Costs
This is probably the largest and most costly category of all. Externalization of Cost is any sneaky way of making the public (taxpayers) pay for some of the costs and risks associated with our business, but we get to keep all of the profits. One dramatic example is nuclear waste: The utility companies are very close to getting the Feds to accept responsibility for the transportation, disposal and long-term storage of nuclear reactor core (radioactive fuel) wastes… which will remain deadly for tens of thousands of years, and for which there is NO safe, long-term storage technology currently known to science. Executives and shareholders split the operating profits, then legislators stick taxpayers with the bill for clean-up. The Federal SuperFund (for cleaning up 50 years of toxic wastes created by the petro-chemical industry) is another clear example, as is low-rent cattle grazing and timber harvesting on Federal (BLM) lands. How much profit could YOU make if the taxpayers agreed to pay a sizable percentage of your materials and/or disposal costs?
4. Basic Tax Laws
The very essense of our tax laws gives a preference to corporations by allowing them to deduct virtually every expense related to earning revenue, while individuals are NOT allowed to deduct their automobiles, their clothers, their shelter, their laundry, their meals or the many other expenses which one MUST incur in order to hold a respectable job in our society. Wouldn’t YOU like to deduct everything which is required to enable you to earn your living? (For more on this topic see the ‘Zine Viewpoint for May 2001 now stored in Alter-Nation’s archives.)
5. Public Research / Private Patents
Closely related to the concept of Externalization of Costs, some intellectual property rights have become a massive giveaway to corporations. For example, Federal and State governments fund nearly 100% of the riskiest research (“basic research”) in every field (most specifically through grants to university systems throughout the county). However, the taxpayers are NEVER given joint-venture or profit-sharing rights in the commercial applications of that research. Essentially, as soon as an area of research seems promising, one or more big corporations swoop in, secure patents on commercialized modifications, and then enjoy a 17-year monopoly on profits. Further, some firms are now claiming patents on the gene pool (foods, medicines derivied from plants and animals, etc.) as if they invented these complex life forms. This is NOT to say that these firms do not invest or risk money in this process, but ONLY these firms get a return on their investment, while the taxpayers get NOTHING for the billions invested in basic research. Wouldn’t you like to grab other scieintists’ inventions and discoveries just in time to commercialize them, and then receive a monopoly on the profits?
6. Sub-Living Wages
In this article (Part 1 of an intermittent series on Corporate Welfare) we detail the systematic subsidization of corporations created by the fact that the mandated Minimum Wage is too low to cover most workers’ actual cost of living. Therefore, it is a mathematical certainty that every corporation paying less than a Living Wage to its workers is being subsidized by the taxpayers. Have you read (or seen) Steinbeck’s Grapes of Wrath? Wouldn’t you like society to subsidize YOUR company and YOUR family?
Of course, every corporate give-away comes complete with a package of rationalizations and justifications, just slick enough to keep Joe-six-pack dazed and confused. But any businessman worth his salt can easily recognize the truth: Corporate Welfare is the rule rather than the exception (in America and around the world). By donating a small fraction of these subsidies back to the election campaigns of willing politicians, corporations essentially use taxpayer dollars to corrupt the system and thereby steal even more taxpayer dollars. Read on to understand the subtle, pervasive and engrained Corporate Welfare program known as The Minimum Wage.
What’s Wrong the Minimum Wage?
In a nutshell, there is some minimum cost for each person to live in this country each year. If for-profit businesses do NOT pay their workers enough to meet even these basic costs, then someone must be making up the difference. That someone is the average taxpayer, who is essentially paying more than his/her fair share of taxes to subsidize the profits of rich yet stingy corporations such as McDonalds and WalMart. Therefore, what’s wrong with the Minimum Wage is that it is NOT a Livable Wage. Of course, this makes arguments for lowering (or altogether eliminating) the Minimum Wage seem even more ridiculous… and the fact is that, after adjusting for inflation, the Minimum wage has declined in real terms over the past 30 years!
This is a very important concept to understand so let’s go over it again. The current Minimum Wage rate is NOT a Livable Wage: It is NOT high enough to allow a full-time head-of-household worker to earn above the poverty level(!!!). Therefore, these working families qualify for and receive benefits from some of the dozens of county, state and federal assistance programs (indigent health care, W.I.C., food stamps, welfare, etc.) which act as our “social safety net”. Even in a two-wage-earner household, when either worker is earning less than a Livable Wage then their labor is being subsidized by their spouse and/or other citizens. What this means is truly shocking: The general taxpayers actually subsidize the profits of national and international corporations. Since small local companies (largely Mom & Pop businesses) MUST pay themselves a Livable Wage (by definition), these local businesses are automatically handicapped when trying to compete against those heavily subsidized corporations who pay less than a Livable Wage to any of their employees. Of course, these handicapped small businesses find that they can not compete unless they too pay only Minimum Wages, and the downward spiral of our communities is cocntinually reinforced.Now, re-read this paragraph until the mathemetical realities sinks in.
Is this the American Dream? Is this honest or ethical behavior? Are these the Free Markets which all the political toadies glorify? Are you OK with the fact that some portion of your labor each day goes off to subsidize rich corporations while helping to trounce small business owners all across America? Are you proud of the U.S. leadership in the IMF and WTO yielding treaties such as NAFTA, GATT, and FTAA which allow corporations to dictate trade rules to supposedly sovereign nations, driving jobs to wherever wages are lowest and environmental protections are weakest? How do you expect your children to live in a world of bare-knuckle competition where the rules are rigged by the rich to ensure unprecedented profits while ecomonically enslaving 95% of humanity? Do you think these statements are exaggerations? Have you bothered to do your homework and the math?
Consider the situtation of John Steinbeck’s Tom Joad in his famous Grapes of Wrath. Steinbeck stood witness to the actual plight of Oklahoma farmers, driven from their dust bowl lands during the 1930’s droughts. Drawn by unscrupulous advertisements offering high-wage farm work out in California, entire families packed their belongings and headed for the Golden State’s central valleys. Immediately upon arrival they learned the harsh realities: The ads had attracted five workers for every job; vineyard and orchard owners, backed by armed guards, paid wages which were too low for workers to even feed themselves adequately; job openings occurred on a regular basis as workers were slowly worn-down by malnutrition until their performance was no longer acceptable to the bosses; stripped of even their cellular reserves, the used-up workers were fired and immediately replaced with fresh bodies clamoring for work outside the estates’ gates. Tom Joad’s choices were to accept this inhumane fate or to fight. Like Caesar Chavez did in reality, Tom Joad chose to fight.
While we may presently enjoy the luxury of believing that this is just a story, we should at least explain the facts to our children… because they will have to fight. The Socialist threat has been crushed. There is no longer a need for the elite to continue to fund the fantasy of a large, well-educated middle-class in America (and the Western world in general). All the elite (about 1% – 2% of the population) require is a small percentage of engineers, professionals and highly-skilled tradesmen to keep their machine humming (say 5% – 7% of the population). Everyone else is “expendable”. You say you do not believe it? Take any third- world country as evidence: The bulks of their population are wage slaves who can not even afford to buy the products they labor to produce. Do their bosses show sympathy, or mercy, or even humanity? Families so desparate that they sell their own children as sex slaves, disfigure them to make them more effective beggars, murder the ones who are the “wrong” sex and are thus unlikely to produce net income. You say these are just savages who prove that our own bigotry is well-founded? Then why are our own WASP-y representatives (in fact, politicians of every sex, color and race) selling out U.S. taxpayers, and why are porn stars predominantly white, and why do our Anglo-dominated corporations lobby for and pay less than a Livable Wage even to Anglos, and why don’t we care enough to actually do anything about it? Apparently, this condition is not confined to one category of people, it is emblematic of human nature. Apparently, it is our collective future unless we fight to stop it since greed and avarice are not self-terminating. Therefore, if we are to have a civilized humanity then we MUST level the playing field by legislating against such unacceptably greedy behavior.
What Alternatives Do We Have?
We MUST force all employers to pay wages high enough to allow employees to live without public subsidies of any form. We MUST NOT allow for-profit enterprises (especially well-established and highly profitable corporations) to suck subsidies out of our system in any form. Failing to do either of these things is actually explicit support for the worst form of state-sponsored communism: State support by and for elite corporations.
So what does this mean in practice?
We must calculate the average annual cost of living in each community, divide by the “full-time” work effort expected from each responsible citizen, and arrive at the minimum wage we must demand that employers pay to their workers (regardless of where they are located). We have a right to demand this if these businesses wish to profit from our society (i.e. whether they manufacture, distribute, sell or otherwise interact with the citizens of our nation). This is an incredibly simply, honest and reasonable approach which no “free market” advocate should dismiss (unless they are really closet anarchists or totalitarians).
1. Each community must determine its actual minimum cost of living for a typical household. This includes housing, health care, food, transportation, insurances, adequate clothing, child care, basic educational expenses, utilities, etc. (This obviously does NOT inlcude vices or luxuries such as cigarettes, alcohol, recreational drugs, S.U.V.s, vacations, Televisons, Nintendo units, etc.) For purposes of example, let’s assume that in an average U.S. community these costs amount to a bare minimum of $22,000 per year for a typical household with one bread-winner and one stay-home parent rearing 2 children (assuming that this structure is how Americans wish to define their vision for our ongoing society).
2. Our nation (and/or each community) must determine its standard work week, including appropriate allowances for sick time (5 days per year?), national holidays (typically 9 days per year) and personal time-off (perhaps a minimum of 5 days per year?). We would suggest a basic 35 hours work week (as in France and other modern nations), plus a minimum annual allowance of 12 non-working days (as detailed above). This yields (52 weeks times 35 hours/week minus 19 non-work days at 7 hours per day =) 1,687 hours per year for a full-time worker.
3. Using the above facts we would arrive at a minimum Livable Wage of (22,000 / 1,687 = ) $13.04 per hour. Further, each component of the cost (i.e. health care) can be segregated to allow employers the flexibility of paying a proportionately lower hourly wage if they were covering their workers’ costs (i.e. health are) directly. Please note: This result is significantly HIGHER than the “living wage” now being promoted even by many well-meaning groups who are essentially negotiating with themselves in order to secure at least some increase in the existing Minimum Wage. Other groups have calculated “sustainable living wages” in excess of $20 per hour as a U.S. average and, some say, a negotiating tool. At Alter-Nation we are not concerned with promoting fashion or political compromise, per se… we are interested in rational and consistent analysis leading to just and sustainable social policies. “In order to create a more perfect union” we MUST first articulate our vision and identify our goals, then we can move efficiently along the path toward attainment.
The Livable Wage system has many obvious advantages, including: Forcing the “free markets” to pay their own way; Reducing the tax rates for individuals (who will no longer be forced to subsidize corporate profits); Drawing for-profit businesses into the larger economics (i.e. concern for the cost of living) of communities whose labor force is being used to the company’s advantage; Requiring offsetting tariffs on imports from countries employing sub-Livable Wage labor; Creating a consistent link between stated public policy and economic realities; Reducing bureaucratic public assistance programs; Increasing the dignity of working families; Increasing the social pressure for everyone (even the capitalists) to carry their own weight.
The only disadvantages of a change to such a system are: The temporary adjustment period needed for the economy to phase in and absorb the higher wages and lower citizen-tax structures; The decrease in stock value for those corporations which now profit most heavily from subsidized labor rates. However, grappling with thse short term problems is far better than accepting the horrible fate of our uncorrected course.
How to End The Give-Aways?
Like the fictional Tom Joad and the real life Caesar Chavez, we have only 2 choices: Accept an inhumane fate or fight.
As usual, the entrenched powers are using every weapon in their arsenal to confuse the issue and promote bogus “facts”. They quote puppet economist/consultants (who themselves are paid handsomely, usually well into the 6 digits, making them, by definition, elites) using scare tactic assertions such as “Livable Wage laws will lead to job losses and higher unemployment”, and even crazy notions such as “Welfare programs are better than Livable Wage programs”. As usual, these lies are wrapped in noble-sounding facades such as “People for Fair Wage Laws”, etc. To see examples of business-interest propaganda you can go to www.livingwage.org. Remember to be intellectually careful when doing your own research, and always reflect on the simple and intuitive math explained above: If employers do not pay employees enough to live in their communities, then taxpayers MUST make up the difference, and that means taxpayers are subsidizing for-profit businesses, making the claim of “free markets” a hypocritical lie.
By advocating Livable Wage laws we are NOT promoting unions. In fact, with properly structured legislation there would be no need for unions at all. Unions result from the desperation of workers who see no way out of their economic trap. Out-muscled by giant corporations with high-priced attorneys, well-armed “bulls”, and complicit G-men, workers ultimately agree to pay a piece of their earnings to a new layer of bureaucratic organization (the union) which is supposed to level the playing field, fight for reasonable wages and work conditions. Of course, once given life every bureaucracy places its own interests ahead of the interests of those it represents, so since their inception unions have tended to become bloated, corrupted and even ineffective.
Instead of adding more unions to protect workers, why not support local, state and federal legislation to require for-profit business to cover all of their related costs, including paying all workers, at minimum, a Livable Wage.
Our citizens have said time and again that they want a respectable standard of living for all Americans. That is what sold Social Security. That is what sold Medicare. That is why Minimum Wage laws were enacted in the first place. Why should we be forced to subsidize corporate profits?
The most important step toward winning this important battle is education. We must educate our friends and neighbors regarding the FACT that they are now being forced to subsidize corporate profits. They must understand that big business is NOT promoting “free markets”, but instead relies on many taxpayer subsidies. They must understand that allowing this situation to continue will lead to the decline for their communities, and ever-lower standards of living for their children, grandchildren, etc. They must understand that if they do NOT take the time to care, then they are effectively supporting the hypocritical rhetoric of those who are stealing from them.
Summary & Conclusions:
What can you do? What should you do?
It’s time to face the hypocrisy and then end it. If Americans want “free markets” then by god let’s have them. NO more Corporate Welfare! Every for-profit business must pay ALL of its costs of doing business. Here are a few simple steps you can take:
1. Check out other “Livable Wage” arguments, such as those made by Responsible Wealth and World Hunger.
2. If you are an employer, review and execute the “Living Wage Covenant” then shame all of your suppliers and competitors into doing the same. Stop supporitng any candidate who does not actively work toward legislation mandating a Livable Wage.
3. If you are an employeee, educate yourself, and then get involved by telling your elected officials, friends and neighbors that we will no longer tolerate the shameless hypocrisy of Corporate Welfare. We will start the reforms by mandating Livable Wages.
4. Our SPEAK! tool is a simple, fast and easy way to act… now! Let your voice of concern be heard! Easily forward this article to your friends and family… and even send your opinion to the key officials we have pre-selected (with just one extra click).
If we do NOT align the rules of our society with our vision of the world we wish to live within, then we will never achieve our goals. How can we be comfortable living with the blatant hypocrisy of free market rhetoric, and a distorted view of our country as a land of justice, while institutionalizing poverty and theft? True patriots are never afraid to constructively criticize their country, and are always committed to creating “a more perfect union”.
Thank you for your attention, interest and concern.