From 2007 to 2011, the biggest public benefits programs spent $243 billion each year on working families who live in poverty or on the brink of it because their jobs pay so poorly, according to a study published Tuesday by researchers at the University of California, Berkeley. The research focuses on fast food workers as exemplifying the plight of low-wage workers and the costs that low wages pass along to taxpayers.
The study focused on the largest direct assistance programs to establish the cost of the “last line of defense between America’s growing low-income workforce and the want of basic necessities.” The combined cost of public health care programs, the Supplemental Nutrition Assistance Program (SNAP, or food stamps), the Earned Income Tax Credit that targets low-income workers, and Temporary Assistance for Needy Families (TANF, formerly known as welfare) for working families averaged $243 billion from 2007 to 2011.ThinkProgress
Low Wages Cost Taxpayers A Quarter-Trillion Dollars Every Year
Alan Pyke
"Cost the taxpayers" is out of paradigm with MMT, but $243 billion is a huge subsidy to low wage employers and it's an appropriation that could be directed elsewhere if the subsidy were ended by adoption of an MMT JG that set a living wage as a floor, or a basic income guarantee.
"I pay low wages. I can take advantage of that. We're going to be successful, but the basis is a very low-wage, low-benefit model of employment."
— Sam Walton (Attributed in Adam L. Penenberg, "Why Google Is Like Wal-Mart", Wired, 21 April 2005. Wikiquote
6 comments:
"…"Cost the taxpayers" is out of paradigm with MMT…" - Tom
It's not only out of paradigm it's missing the point.
Low wages supplemented by public assistance is essentially welfare for the rich and an unfair competitive advantage, a common thread among the biggest corporations.
Competition exists only wrt small businesses for the most part.
As usual Grayson, who was my Congressman but is now in an adjacent district, is out of paradigm re bonds and who actually funds spending.
He does have the right sensibilities though for serving the best interests of his constituents and I believe is reachable by the MMT community.t
My last comment was entered in another thread (I think). Is blogger acting strange?…I got a blogger error when I entered it.
“It's an appropriation that could be directed elsewhere”. Care needed there. Assistance programs are a TRANSFER from taxpayers to program beneficiaries: that transfer does not involve net resource consumption. I.e. if the program is abandonned or deminished in scale, the money saved cannot be spent on anything REAL, like roads, assuming the economy is already at capacity. In contrast, the money could be spent on different types of TRANSFER.
Assistance programs DO INDUCE employers to make inefficient use of some employees. And that’s a REAL COST. There is a solution to that problem, but it’s a bit bureaucratic. It’s to let state employment agencies nab skilled program benficiaries, and get them to apply for jobs where their skills are needed.
"Assistance programs are a TRANSFER from taxpayers to program beneficiaries…"
WHOA!!!!
Taxes are paid…
Some people get assistance…
There is no causal relationship or connection between the two.
While it is true that the assistance to low wage workers is a transfer, it also functions as a subsidy to large corporations whose business model is to force government to subsidize them in various ways, including their labor cost. If the paid a living wage those transfers could be directed elsewhere to programs that don't involve subsidies. In principle government should not be subsidizing wage costs for corporations. It's inefficient and unnecessary. And it distorts the labor market if one wants to talk market fundamentals.
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