In today’s Daily Kos, the great labor reporter Laura Clawson examines the wealth of an average worker compared to Sam Walton’s offspring. According to research by the AFL-CIO, the six Walton heirs total wealth is the same as that of 52.5 million American families (42.9%). The study points out that some families have negative wealth. Adjusted for that, the number of families needed to equal the Walton wealth drops to 1.7 million. However, that adjustment also indicates that many American families have issues with “negative wealth.” Clawson also notes that a Walmart worker being paid $9 per hour would have to work 1,036 hours to make what the company’s CEO Doug McMillon makes in one hour.
Do the Walton heirs deserve to be very rich? I believe they do. Their father created an innovative business model. The bigger question is how much wealth should anyone – rich heir or CEO -- have. What is the cost to society of an economy where a few are very rich and secure and many working class and middle class families are falling behind and less secure?
Target has announced that it will pay its employees a minimum wage of $9 an hour. It’s easy to dismiss this move as being too little. Instead, I like to look at it as a small step that will have big consequences. Employer who pay less than $9 an hour now have to fear that they will lose employees to America’s two largest retailers. More importantly, wage increases at the bottom raise the bar for all workers. If the unemployment rate continues to drop, wages will have to go up. Hopefully, the decisions by Walmart and Target will be the first step that leads to higher pay across industries.
Al Jazeera America reports on claims of a Texas employment miracle. While some may be moving ahead in the Lone Star state, construction workers interviewed for this article are working hard for $8-$10 an hour. The state’s governor brags that Texas has an unemployment rate far lower than the national average (national 6.3%; Texas 5.5%). However, the state is producing as many low wage jobs as high paying jobs. It also offers less support for low wage workers, which means they struggle even more to get by. The working poor in Texas live harder lives than workers in New York or California, states that have more progressive labor laws and social safety net services.
Some may say, “A job is a job.” Those people usually have a job or other source of income that gives them the security needed to be glib and unfeeling about others. Across America, low wage workers are struggling to get by. So are middle class workers, who often resent the aid given to low wage workers. All American workers need to remember who the real winners in this society are – the 1% – and ask them to pay for their share of our common needs. The Texas Miracle is just one more example of an American economy that asks more and more of the working poor. That’s not a miracle. It’s a tragedy.
Too many people are hung up with resentment about poor people who get benefits. What they need to think about instead is the millions of Americans that work hard, but can’t make enough money to live without some kind of state aid. Huffington Post offers a great article on these people, how hard they work, and how they live. If you are against raising the minimum wage, I recommend that you read this article and think about the people it describes
Common Dreams is one of my favorite websites for understanding our world. Today it reposts an article by Jeff Faux that examines a very hot book, Capital in the Twenty-first Century by Thomas Piketty. The book’s thesis is pretty simple: the rewards of capitalism are now flowing to very few people. After WWII, the opposite was true. Economic expansion built the middle class in America and allowed Europe and Japan to rebuild after a terrible war. Poverty in America shrank. Now the opposite is true. Even though workers are more productive, their pay has declined.
Piketty claims that capitalist growth is fueling income inequality. Looking at capitalist societies over 300 years, he finds that most periods of growth increased inequality. The post-war period in the U.S was an outlier. Piketty refutes the claim that markets are self-correcting. Instead, they benefits most often go to those who do not have to work for a living (big investors, capitalists). Faux is careful to point out that Piketty is not a radical, that he is closer to Keynes than Marx. What excites me about a book like this is that it will challenge the way people think. It will force people to reexamine accepted wisdom, which is often the first step to real change.
PS: In Daily Kos, Mark Sumner criticizes Ross Douthat’s attempt to pooh-pooh Pikkety’s book.
Think Progress reports that some businesses are asking their customers to do something very odd: Stop tipping wait staff. Instead, these moral businesses are pricing their food and drink in a way that lets them offer living wages and benefits, which is a common practice in other countries. The article also notes that under the current tip based system, the poverty rate for restaurant employees is three times higher than other workers. If the average tip is 20% and the restaurant raised its price by that amount, we could be confident that hard working people are being properly compensated. Anyone who thinks that paying such a small amount is unfair has another option: Cook your own meals.
Paul Ryan claims to care about poor people. During a speech at a conservative conference, he said Democrats support school lunch programs so children can have “full bellies and empty souls.” Disgusting. How can anyone talk about poor children in such a callous way? I understand that Ryan and his fellow conservatives believe that the state should not provide a safety net. While I disagree with that belief, it is not the same thing as claiming that state programs empty our souls. The last time I checked good Pope Francis was teaching Jesus’ message to care for the poor. Ryan must understand the message to be that Jesus wants us to cut food programs for children – in the name of saving their souls.
Paul Krugman discusses this story in a much more intelligent way. I’m too livid to try to be rational about this. Over 20% of the children in America live in poverty. Most of the nutrition they receive comes when they are at school. Save their souls – and transfer the money to billionaires and corporations. That’s true morality.
Laura Clawson of the Daily Kos has written two recent articles that show how poverty is a growing problem in the U.S. First, she explores how households headed by working single mothers are falling deeper into poverty from 54% in 2007 to 58% in 2012. Beyond the challenge of finding a good job with decent pay, many of these women are challenged by a lack of affordable day care. Many of our politicians claim to the pro-family, but they don’t seem to care about these women and their children.
In a second article, Clawson dismantles the claims that Medicaid and food stamps keep people in poverty. Instead, she shows that without these program our national poverty rate would be 28.7%, much more than the currently shameful 16%. Most of the people benefiting from these programs work, and – despite their hard work – they can’t get ahead. Who does get ahead? Clawson points out that the most successful beneficiary of social safety nets are large corporations who know that they can continue to pay low wages as long as the government will subsidize them. The problem can be summarized in two words: corporate welfare.
Conservatives like to beat the drum of American Exceptionalism. Then they do everything to make that term a big joke. Laura Clawson of Daily Kos examines national rates for the minimum wage. American is nowhere close to being exceptional. Australia, France, Canada, and several other developed countries have a higher minimum wage. Clawson points out that the U.S. has to use social programs to supplement wages of low paid workers. In essence, this means that those who make more than the minimum wage are subsidizing companies that pay the minimum wage. The next time you hear someone complain about government programs, please remind that person that many of the people getting those benefits work. The real winner is the corporations that pay low wages. The real problem is corporate welfare.
According to the good people at Demos, Walmart could easily give its low wage workers a raise, and, with a little sacrifice by corporate leaders, all of the company’s workers could earn a salary well above the poverty line. Where do they get the data to make this claim? From a presentation by Walmart CEO Bill Simon. Check out this infographic to see how Demos finds a happy solution that would please both Walmart workers and customers – no prices need to be raised. The rich heads of the company would still be rich, just not as rich.
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