Liveable wage vs Welfare state

Discussion in 'Politics, Religion, Social Issues' started by G51989, Jul 22, 2013.

  1. macrumors 68030

    G51989

    Joined:
    Feb 25, 2012
    Location:
    NYC NY/Pittsburgh PA
    #1
    Well I have been noticing a couple of trends in some threads here, and they break down pretty easily.

    We know that lots of employers, such as Wal Mart as just one example. Does not pay workers a living wage, MANY employers do not pay their workers a living wage. Even when working full time, some people can't even make ends meet working two jobs like that.

    We know not all people can go to college. So they're stuck in these jobs for life.

    So, what do companies like Wal Mart who don't pay a living wage do? They tell their workers to get fed and housed via government programs. Like welfare and Foodstamps. As the workers can't make ends meet otherwise.

    So what you have is the tax payer, is making up for lost wages for workers who can't make ends meet.

    So in a nutshell what do you prefer?

    Forcing companies to pay a living wage and get higher prices in the store.

    OR

    Your tax money going to make up for those wages via government assistance programs?

    It seems to me we have to make the Choice between everyone making a living wage and paying higher prices. OR a Welfare state, which is what we have now.

    Which would you pick and why?
     
  2. macrumors 68020

    P-Worm

    Joined:
    Jul 16, 2002
    Location:
    Salt Lake City, UT
    #2
    Higher wages do not lead to higher prices in a 1 to 1 fashion.

    http://ideas.repec.org/p/lec/leecon/06-9.html

    Businesses have ways of dealing with higher minimum wages besides raising prices and they will often take these routes because consumers are reluctant to swallow price hikes. One solution (and the one I favor) is for the business to lower payment at the top (CEO and the board of directors, management) or to be content with smaller profits.

    P-Worm
     
  3. macrumors 6502a

    JohnLT13

    Joined:
    Dec 9, 2012
    Location:
    Boston (aka Red Sox Nation)
    #3
    Just about choked on my water reading that. You do realize CEO's and shareholders will have non of this right?:p

    If you cant make a living at Walmart, Get a better job. I did not go to college and after years of watching other people make lots of money from my labors I started my own business. Been doing that for 17 successful years.
     
  4. macrumors 68020

    P-Worm

    Joined:
    Jul 16, 2002
    Location:
    Salt Lake City, UT
    #4
    Your solution is that everyone working at Wal-Mart should get a better job?

    P-Worm
     
  5. macrumors 6502a

    JohnLT13

    Joined:
    Dec 9, 2012
    Location:
    Boston (aka Red Sox Nation)
    #5
    NO. Just the people who want to do more then just "Make ends meet".
     
  6. thread starter macrumors 68030

    G51989

    Joined:
    Feb 25, 2012
    Location:
    NYC NY/Pittsburgh PA
    #6
    The point of the thread was to point out that most people who work at Wal Mart do NOT make ends meet.

    So the Government has to make up for that by welfare and foodstamps. Otherwise lots of these people won't eat.
     
  7. macrumors 68020

    P-Worm

    Joined:
    Jul 16, 2002
    Location:
    Salt Lake City, UT
    #7
    I don't think you recognize the problem. People that work at Walmart can't "Make ends meet." And that's what this thread is about. How do we want to support those that just want to survive? Do we want to give them welfare, or support a minimum wage hike and let the market figure it out?

    P-Worm
     
  8. zin
    macrumors 6502

    Joined:
    May 5, 2010
    Location:
    United Kingdom
    #8
    This issue has a very simple solution.

    Isn't it obvious? We abolish the minimum wage and the entire welfare system. Then, through the magic of the Free Market™, the average wage will suddenly go up for no apparent reason.

    But seriously, I don't think that you can win with big corporations. If you increase the minimum wage, then they increase end-user prices. Why do they do this? Because the market dictates that their profit margins must rise every single year.
     
  9. macrumors 6502a

    JohnLT13

    Joined:
    Dec 9, 2012
    Location:
    Boston (aka Red Sox Nation)
    #9
    I recognize the problem entirely. But why should the government (AKA Taxpayers) foot the bill for people who refuse to live within their means, or better themselves?
     
  10. macrumors 68020

    P-Worm

    Joined:
    Jul 16, 2002
    Location:
    Salt Lake City, UT
    #10
    Read my linked study. Rising prices in a 1:1 relationship is not what ends up happening in practice, and that's because consumers are resistant to price hikes. Companies have to find other avenues.

    I don't think the government should have to fit the bill. I think companies should and pay a living wage. And what are you talking about "Refus[ing] to live within their means?" Do you have a study on the matter, or just some personal anecdotes?

    P-Worm
     
  11. macrumors 68020

    Thomas Veil

    Joined:
    Feb 14, 2004
    Location:
    Reality
    #11
    Exactly!

    The only solution I can see to that problem -- and this would have conservatives screaming bloody murder -- would be for the government to subsidize new, competing businesses, with a mandate that prices be held significantly lower.

    In other words, if Walmart wants to raise prices in exchange for having to pay higher wages, then let the government seed a company called Govmart. Govmart would have the advantage of not having to satisfy the "the street"'s forecasts of a sizable profits every quarter. And since Walmart would be undersold by Govmart, they'd have to compete with Govmart's prices.
     
  12. macrumors 6502a

    JohnLT13

    Joined:
    Dec 9, 2012
    Location:
    Boston (aka Red Sox Nation)
    #12
    Is there a study on Walmart employees not being able to make ends meet?
    I dont shop at Walmart, so I don't have any anecdotes. But I have struggled myself in my early years and learned to get by on what I made without assistance.
     
  13. macrumors demi-god

    Joined:
    Oct 14, 2005
    Location:
    Virginia Beach
    #13
    As someone who worked at one of those jobs (McD's for 10 years, starting in high school at minimum wage) and never had any college, I think that you're being a little fatalistic there IMO.

    It seems to be a rare case where that scales meaningfully.

    Morningstar lists Walmart's 2013 Executive Compensation at $62.57 million dollars.

    Walmart's website shows they employ 2.2 million people.

    If you literally took 100% of the 2013 Exec Compensation and spread it equally amongst the employees, it'd work out to an extra 54 cents a week for the employees (for the year of 2013).
     
  14. macrumors 6502a

    Joined:
    May 27, 2009
    Location:
    FL
    #14
    Maybe the Government should pay a living wage too.
     
  15. thread starter macrumors 68030

    G51989

    Joined:
    Feb 25, 2012
    Location:
    NYC NY/Pittsburgh PA
    #15
    Yep.

    http://inthecapital.streetwise.co/2013/07/22/how-your-tax-dollars-subsidize-walmarts-profits/

    Thats just one artical, there are hundreds more all across the country.

    Even at 12.50 an hour most people cannot make ends meet at a place like wal mart.

    So the taxpayer has to make sure those workers aren't living in a box on the street and aren't starving.

    I agree with some of the ideas as well.

    For every full time worker a company does not pay a living wage. They will be fined for every dollar they cost the tax payer in foodstamps and welfare.
     
  16. macrumors 68000

    hulugu

    Joined:
    Aug 13, 2003
    Location:
    the faraway towns
    #16
    That's just the point of the argument.

    Wal-mart's business model is incredibly disruptive. First, the company engages in several tactics designed to lower or mitigate the wage-earnings of its workers. Second, Wal-mart's disruptive business model has eliminated jobs in manufacturing and retail sending thousands of workers to the Wal-mart hiring kiosk.

    This creates a downward pressure on wages and because of this, workers are using public benefits to make ends meet.

    It reminds me of the game played around a pool. Whenever someone tries to climb out, you say "come'on get out of the pool" while you push them back in.
     
  17. macrumors 6502

    Joined:
    Jul 6, 2009
    Location:
    Los Angeles, CA
    #17
    Good grief. I love it when every old, outdated, horrible economic idea gets trotted out and presented as "gosh golly! brand new! No one's ever thought of this before!" in these types of discussion: Price fixing. Wage freezes. Income redistribution completely divorced of merit and productivity. Artificially propping up markets. 'Managed' economies. Centralized authority dictating from on high.

    I notice this horse***** is always reguritated by people who know very little to nothing about actual business and economics... yet think they know everything. Very much like the politician mindset.
     
  18. macrumors 68000

    hulugu

    Joined:
    Aug 13, 2003
    Location:
    the faraway towns
    #18
    Please elaborate.
     
  19. splitpea, Jul 22, 2013
    Last edited: Jul 22, 2013

    macrumors 6502a

    Joined:
    Oct 21, 2009
    Location:
    Among the starlings
    #19
    You forgot options 3 and 4:

    3) eliminate welfare programs and minimum wage and see massive homelessness, severe malnutrition or even starvation, and crippling debt among people who work 60-80 hours per week but receive wages too low to live on and for whom no safety net is available (aka the status quo in 1840s-1860s England -- read Dickens or Engels for a snapshot)

    4) eliminate welfare programs and minimum wage and by some miracle never before seen in the history of mankind (see above re 19th C England), the working poor decide en masse that they'd rather starve quickly than work for less than a living wage and starve slowly, causing Walmart et al to go out of business because they can't hire employees

    As far as I can tell, the free market religionists believe that (4) is the natural state of things, somehow not understanding that human nature and history make (3) inevitable.
     
  20. macrumors 68040

    DakotaGuy

    Joined:
    Jan 14, 2002
    Location:
    South Dakota, USA
    #20
    The Government became the majority shareholder of GM and I sure didn't see their car prices drop below the privately held companies prices.
     
  21. macrumors 68000

    hulugu

    Joined:
    Aug 13, 2003
    Location:
    the faraway towns
    #21
    Maybe lawlessness as people start stealing for food and an implosion in banking as a great number of these people stop paying their credit card bills and mortgages. Falling prices in housing since millions are homeless. It might just be the economic collapse we need.

    If the working poor simply unionized and went on strike en mass, they could probably collapse Wal-mart, Amazon and a dozen other businesses that use cheap labor to build profits. At least, until the Booze-Allen started selling NSA information to Wal-mart and they used the intelligence to send their own private strikebreakers in.

    And, then we're back to economic collapse. Frankly, I think we're closer to the edge of the knife than we realize. There are lots of fault lines that are under pressure.
     
  22. macrumors 6502a

    Gutwrench

    Joined:
    Jan 2, 2011
    #22
    I'm perplexed. Why should minimum wage be equated to a "living wage"?
     
  23. macrumors 68000

    hulugu

    Joined:
    Aug 13, 2003
    Location:
    the faraway towns
    #23
    Well, I guess that depends on how you want the minimum wage to operate. And, that depends on how you define livable wage.

    However, the minimum wage has not kept up with inflation, corporate profits or productivity, so arguably, companies are profiting from this difference, which may not be fair or socially useful.

    I would argue that the minimum wage shouldn't a living wage, but the bare floor (and I think we should eliminate exceptions like including tips). However, if a large chunk of the population is exciting at the bare floor, forcing the minimum up may be a sledgehammer. But an effective one.
     
  24. macrumors 65816

    Joined:
    Aug 26, 2006
    Location:
    Atlanta, GA
    #24
    Well, why shouldn't it?
     
  25. thread starter macrumors 68030

    G51989

    Joined:
    Feb 25, 2012
    Location:
    NYC NY/Pittsburgh PA
    #25
    So your happy that your tax dollars help out wal mart?
     

Share This Page