Market Pressure to Reduce Welfare Spending

Capitalism is an exceptionally good economic theory but "theory" and "reality" can often be distant cousins. The fact is that if the "Economic Theory of Capitalism" work as it should then there would be no situations where a working person wouldn't be forced to work for compensation below what is required for them to survive.

Welfare assistance to mitigate the effects of poverty is addressing a "failure of capitalism in practice" because involuntary poverty should not exist under the "Economic Theory of Capitalism" but it does exist. A person working full time should always be able to afford a roof over their heads, food on the table for their family, clothing for their backs, energy to keep them warm and cook, and health care services when they require them. These are the fundamental necesssities of existance and everyone should be able to obtain these fundamentals based upon their labor.

Even under slavery the "master" had an obligation to provide for the basic necessities of the slave and capitalism should offer more than what slavery provided.

So yes, idealistically welfare assistance should not be generally required under capitalism (excluding generally cases of physical or mental incapacity) but the fact is that "capitalism" in practice is failing to a degree because involuntary poverty does exist and it's quite extensive.

Are there ways to address these failures. Absolutely and I've recommended several. I'm made tax proposals that reduce the burden of taxation relative to income for low paid individuals/household that increases their disposable income and increase generational wealth accumulation for example.

Even this proposition is based upon "capitalism" because it creates market pressure on employers. It doesn't "mandate a minimum wage" but instead provides information to the consumers that can create market pressure on the enterprise. Basically I'm telling the enterprise, "Want my business? Then provide the necessary compensation so I don't have to support them with my tax dollars!!!" I'd rather pay a couple percent more for a product or service if it means less taxation to me by doing so.

Once I ran the numbers on Walmart (I hate using the same example but Walmart is a good one to use) and if they raised the compensation for all of their employees by 10% it might increase the costs of goods that Walmart sells by 1%. Labor is only a small percentage of Walmart's expenditures each year (purchasing of products to sell is their largest expenditure).

So yes, there is much that can be done to address the failures of "capitalism" that necessitates the expenditures for welfare to mitigate the effects of involuntary poverty. We can ensure that the "poor" have more disposable income based upon their labor by changing our tax codes. Additionally we can put market pressure on enterprises to increase compensation so their employees are not subjected to involuntary poverty.

What people need to always keep in mind is that there is always a difference between "theory" and "reality" and the reality often fails to meet the ideology of the theory. Welfare assistance to mitigate the effects of involuntary poverty is addressing a failure ot the economic theory of capitalism.

 

I have shown how this proposal would harm those who desire full time work and are responding to an ad for a part time worker. I have shown how this requirement would be an infringement upon that workers right to privacy. Both of these things render your proposal as unworkable and counter productive. As far as your belief that this somehow falls under the umbrella of Libertarian principles, I have a hard time grasping, but you are free to label your beliefs however you see fit. In regards to the philosophical aspects of your proposal and putting aside the aforementioned issues that render it unworkable, I even think the desire if it could work is not one that most people would find helpful. I mean lets be honest, we all have a pretty good idea which industries hire a lot of minimum wage and low paid workers. There wouldnt be one iota in me that could care less from a consumers standpoint how many of their workers are on government assistance. Do you honestly think that less people would buy fast food because a high percentage of their employees are making minimum wage? You seem to be fixated on this, but I believe only a small minority of the population would support your desire. I think there are much more productive things that businesses, and government agencies that would have to enforce this proposal could be doing, rather than complying with and enforcing this proposal that would unnecessarily create an even further bloated government intrusion into private business and its employees.

 

You've expressed an opinion but haven't shown anything at all. As I responded the worker could simply check the box "I prefer not to answer" so their Right to Privacy is not violated.

As I've noted the actual survey questions can be tailored so as to not be discriminatory against the hiring practices of an employer or negatively effect overall employment. We could argue whether its better for the person or the taxpayer if two employees both work 20hrs/wk where both need assistance or one person working 40hrs/wk requiring no assistance and one person unemployed requiring total assistance to survive.

I could argue economically it's better to have one worker double the compensation because by spending their income on consumption they create other jobs in the economy so the "unemployed" person has more likelihood of employment. One of the problems identified with the economic recovery since 2009 has been that 95% of the income from the increase in GDP is going to the top 1% of income earners that don't increase "consumption" based upon increases in income (they invest instead of buy with the additional income) and so it's not creating jobs as all jobs are based ultimately on consumption.

Be that as it may while you've offered an "opinion" you haven't provided anything other than an unsupported opinion.

I think people are very concerned about the necessity for government spending (welfare assistance) to mitigate the effects of poverty.

Would a person purchase less fast food? Probably not but if Burger King had a lower percentage of employees collecting welfare when compared to McDonalds then they might choose to patronize Burger King more often than McDonalds. Just 1,000 people a month (that is not a lot of business for a fast food chain) going to the local Burger King as opposed to McDonalds would equate to $10,000/mo if the average cost was $10/visit. The McDonalds owner would certain be influenced by a $10,000 difference in monthly revenue when compared to the local Burger King. That $10,000/mo is $120,000/yr and that is a lot of money even for a place that has sales of well over a million dollars a year

There would be competition war between Burger King and McDonalds to reduce the number of their employees on welfare assistance to influence customers to patronize their establishment as opposed their competitor.

 

LOL.....Yeah SURE there would. More likely there would be competition amongst employers to hire those employees that come from less disadvantaged backgrounds so their likelihood of govt assistance would be lower. This would severely hurt those from disadvantaged areas. You cant escape the unintended consequences regardless of how you word your mythical survey.

 

What is a reasonable wage?

 

A person's background has absolutely nothing to do with the qualification criteria for welfare assistance nor does it have any effect on who is and who is not receiving welfare assistance. For example today about 40 million Americans are receiving SNAP assistance (as I recall) and they are overwhelmingly white and generally from middle class backgrounds. Unfortunately, like politics, the middle class is disappearing today as more and more are slowing being pushed into poverty. We went from about 10 million collecting SNAP benefits to 40 million because of the Recession while the criteria didn't change one iota. The problem is the loss of income for working Americans many of which were "upper middle class" and today find themselve barely above the poverty level because of the job market.

In my profession (historically a very high paying profession) the median wage has dropped by almost 50% since 2008, jobs are scarce (three unemployed for every job opening), and that is a huge drop in income for a lot of people. Even for those that can find work they're being forced to sell their homes and downsize although they won't fall to poverty levels because we started out with such high income to begin with. For those that can't find work they're having to tap their retirement investments to stay out of poverty and pay the bills.

Racial discrimination in employment has far more to do with who's hired and not hired than any other single factor. Do you support racial discrimination in employment?

 

Sounds to me like you are in the mortgage business.

You can cite all the statistics (that can be cherry picked to skew reality) that you want. If I own a business in the suburbs, and Im theoreticaly going to be dinged for having workers on government assistance, I am NOT going to be hiring anyone for my part time opening that comes from the inner city. My choice is going to be to fill the position with some suburban kid that is perhaps going to college on the side and still living with their parents. In a great many cases, the inner city adult might be a better worker and stay around longer, but if I fear I may get dinged for having them, I will look elsewhere. That is reality.

 

It is highly unlikely that an inner city kid would be applying for a job in the suburbs because of the commute and the average age of a McDonald's employee is 29 years old (from what I recall) so they are not a kid working part time and going to college. Those days are ancient history.

Of course as an employer you're prohibited from asking for this information from a job applicant anyway (i.e whether they live at home or are going to college) because it's none of your damn business.

 

LOL....its none of my damned business if they live at home, but it is my business the status of whether or not they are receiving govt assistance? Whether a question can be asked or not, (you most certainly can ask if they are going to college) doesnt stop one from taking an educated guess, and an educated guess would tell you that a 20 year old kid having an address in a relatively well to do neighborhood would dictate that kid probably lives with his parents. It may not be foolproof, but is going to be QUITE accurate in the aggregate. Whether or not there is an unending supply of college kids for part time jobs is irrelevant to the larger point, which is that your proposal NOW gives that college kid and or suburban kid the advantage of being the most coveted person for that job. This ultimately hurts those from the most disadvantaged areas by making them the LEAST coveted for a part time position. The unintended consequence of your proposal would be to further hold down those from the most disadvantaged areas. No amount of spin is going to change that.

 

Taxcutter says:
Regulatory costs are passed on to the consumer. As a consumer, I do not want to pay extra for something I don't want - particularly a cost that only advances an agenda that I regularly urinate on.

 

Taxcutter says:
That's because the bluehairs and greybeards on the morning shift drive the average age up.

 

No, it isn't really the "business" of the enterprise owner or management whether an employee requires outside assistance to live (unless, of course, they actually care about the employee) but it is the "business" of the potential customer to the enterprise because they're the one's having to subsidize the enterprise with their tax dollars that pay for the cost of welfare assistance for the employee.

Until hired the enterprise has no business in even knowing the address of the applicant and certainly to use it as a determining factor in employment practices would constitute discrimination in employment that would violate the anti-discrimination laws.

This still ignores the fact that in order of precedent skin color, ethnic heritage, gender, and age are the primary causes of enployment discrimination in America. A white kid is not going to be discriminated against because he lives in a poor neighborhood while a black kid is going to be discriminated against regardless of the neighborhood he lives in.

If we want to address invidious discrimination then let's address where the real discrimination exists today as opposed to making up theoretical discrimination that statistically wouldn't occur at all.

 

Of course it doesn't, you don't have a clue.

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You don't have a right to cheap. If you don't want to pay for those regulatory costs, go shopping out of the country.

 

The vast majority of "regulations" impose no significant costs on the enterprise and this proposal would have the most minimal of costs imaginable.

For example there is an OSHA regulation that requires a fire extingisher to be hung between two different measurements from the floor. It doesn't even take a tape measure to hang it correctly and imposes no cost on the enterprise (even the fire extingisher comes with the hanger) to hang the fire extinguisher according to the OSHA regulation.

Now there is a fire extingusher regulation that does cost money and makes no sense. A business is required to have their fire extinguishers checked annually. I found out the reason behind the regulation. If the dry chemicals in a dry chemical fire extiniguisher are not shaken once in awhile they will pack down like concrete and not come out if the extinguisher is used. Why not just require the "owner" to shake the fire extinguisher if/when the fire marshall visits and let the fire marshall sign-off on it. The enteprise could also post a document stating the last time the fire extinguisher was shaken.


My proposal that the employer survey their employees and post the results for the public would, at most, cost a few dollars per employee every year. The employee uses more toilet paper than this proposed regulation would cost.

 

How about you explain it then since you're so clued in.

 

Of course it isnt the "business" of the enterprise owner, yet you are proposing making it so.

Have you ever heard of an application? It has a line for the applicants address.

You are proposing creating a whole new reason for discrimination, by virtue of trying to ding business owners for the welfare status of their employees. Under your proposal, a business owner is going to attempt to NOT hire those that are likely to be on welfare. This really isnt that difficult to comprehend. Instead of fightng this to the death, you should instead be saying " I hadnt thought of that" and simply move on. Face it, this proposal of yours that you formulated over a conversation with a few other self reported libertarians, would hurt those very same people that you supposedly are trying to help.

There is nothing theoretical in this assertion. For every action there is an equal and opposite reaction. You are proposing an action that would ding business owners for the welfare status of their employees. The obvious and 100 % predictable reaction from employers is going to be an attempt to not hire those that are most likely to be on welfare.

Honestly, we have spent far too long discussing this silly proposal.

 

The consumer has a Right to Knowledge related to the enterprise that can affect their decisions to patronize the enterprise or not. It is fundamentally no different than requiring a company to put the contents of a produce on the label.

Why is anyone objecting to the consumer having access to information that can be provide at virtually no cost by the enterprise that could significantly effect the person decisions related to patronizing or not patronizing an enterprise?

Personally I'd much rather patronize an enterprise where the owners and management care about their employees and provide them with good compensation as opposed to an enterprise that doen't give a damn about the welfare of their employees to the point that I have to pay taxes to provide the basic necessities for the employees. I'll even pay more for goods and services if the enterprise cares about their employees by providing adequate compensation to their employees not just so the employee can survive but where the employee actually profits from their labor.

I don't have any problem with doing that whatsoever. Why are some opposed to an employee actually profiting from their labor?

 

See EVERY prior post in our conversation.

 

Why are you personally opposed to an employee profiting from their labor?

Always remember that a person on welfare is "operating at a loss" and will never manage to get out of poverty. They're not working a "minimum wage" job because they want to but instead it's because they're the only jobs available. Upward economic mobility has been relegated to the past as "real wages" have been declining since about 1998 and dramatically declined since 2008.

When the enterprise operates at a profit and the employee operates at a loss it's a "win-lose" situation but when the employee is not operating at a loss it's a "win-win" situation for both the employer and the employee. It's also a "win" for the taxpayer because they're not taxed to make up for the shortfall in compensation to the employee. We really go from a "win-lose-lose" situation (i.e. Employer wins, employee loses, and taxpayers loss) to a "win-win-win" situation when the employer provides adequate compensation.

So why do you support the WIN-LOSE-LOSE status quo?

Wouldn't you like to see a decline in welfare spending? I would certainly like to see that but apparently "conservatives" really like welfare spending because they don't want to reduce the need for it.

 

SNAP is Walmart discount program for its employees.

No wonder why they're actively supporting every Democrats in every election.

 

How do you explain most of the 1% being democrats if it's the republicans that are the ones looking out for them? Stop listening to propaganda and look around a little.

 

These employees can afford to work for the low wage because the taxpayers are picking up the difference in what they need to live, right? The easier solution then surveys and postings is to eliminate the welfare assistance for those able bodied working age people. They will no longer be able to work that job because it doesn't cover the expenses for their needs. They quit. The store still needs employees. They increase the wages. Done

 

Now we get to the real crux of your argument, which is that you want to raise minimum wage....

For starters, when an employer is advertising for a part time opening, they are not inviting that person into their organization so that the organization can support their entire life. Minimum wage jobs are NOT designed to support a family. If a person is looking to support a family and has been unable to find work, they should be happy to have SOMETHING in the meantime until they are actually able to find suitable full time employment. An employer is well within their rights to advertise for a job that isnt enough to raise a family. A potential employee is well within his rights to refuse that employment if they dont like what it pays. You are approaching this as if an employer takes on the responsibility of raising a family of four every time he advertises for a simple part time unskilled work position. This is a free country, and an employer has a right to advertise for a job opening that wont raise a family, just as an employee has the right to accept or decline that job. I wholly reject your premise that an employer is responsible for the totality of an employees financial health by virtue of placing a job ad for part time/ minimum wage work.

Of course I want to see a reduction in welfare spending. I simply dont see it as the responsibility of a part time/ minimum wage employer to do so in any manner, shape, or fashion.

 

Without the job and/or the assistance they can't afford to quit. They would starve within weeks because there isn't another higher paying job out there for them.

At best they could possible make a lateral move but even that's hard because across the board there are three unemployed people looking for work for every job opening. In some cases there might be only one job opening for every 50 or 100 people looking based upon the specific job requirements. Making a move from $8.50/hr at Walmart to $8.25 at McDonald's is more likely and that is counterproductive.

Basically the real proposition is, "If you can't afford to live on the wages you're earning then commit suicide or become a criminal" because they are either going to have to become a criminal to obtain food and shelter or they're going to starve to death homeless in the streets within just a weeks at most.

I don't think that's a very pragmatic or responsible solution to the problem.

Very much like the Republican proposal for health care for the uninsured. Don't get sick and if you do get sick then die quickly.

 

NO I DON'T and my proposal predominately avoids any necessity to raise the minimum wage for retail enterprises. Any compensation changes would based upon market pressure, a vital requirement for free market capitalism, and not based upon government fiat (i.e. minimum wage laws).

There's another way to accomplish the dramatically reduce the necessity for taxpayer supported welfare assistance that also avoids a requirement to have a minimum wage requirement but it is far more intrustive and directly imposes costs enterprise that, while I know it exists, I prefer the "market pressure" proposition at least to begin with. Try it and see how well it works. It doesn't impose a signficiant expense on enterprise as it is based exclusively upon providing "hard to get information" for the consumer so that they apply market pressure to the enterprise. It really takes the government out of the loop from an economic and business perspective.