A Philosopher's Blog

Minimum Wage VI: Subsidizing

Posted in Business, Ethics, Law, Philosophy by Michael LaBossiere on September 11, 2013
McDonalds-Brentwood

McDonalds-Brentwood (Photo credit: Wikipedia)

One common way to argue against not raising (or even just eliminating) the minimum wage is to build a case based on claims about those who work such jobs. For example, one approach is to argue that the people on minimum wage are mainly high school and college kids who are just earning spending money. As another example, it is often claimed that minimum wage jobs are temporary jobs for most workers—they will spend a little while at minimum wage and move up to better pay. While these claims are true in some cases, the reality is rather different in general. For example, the average age of fast food workers is almost thirty—they are not just school kids. Also, a significant number of people get stuck in minimum wage jobs because there is nothing else available.

As an aside, even if it were true that all those working such jobs were just earning spending money or were going to move on up, it would not follow that the minimum wage should be lower or eliminated. After all, the fairness of a wage is distinct from the motive of the person working for the job or what they might be doing next. For example, if I am selling my books to get money to buy running shoes rather than on survival necessities, it would seem odd to claim that I am thus obligated to lower my prices. Likewise, even if a kid is earning money to spend on video games rather than for putting food on the table, it would seem odd to say that she is thus entitled to less pay for the work she does.

Getting back to the main focus of this essay, the reality is that many of the folks who work minimum wage jobs are working the jobs primarily to pay for necessities and that many of them are stuck in such jobs (in large part to the current economic situation).  The reality also is that a minimum wage job will typically not provide adequate income to pay for the necessities. Interestingly, some corporations recognize this. McDonald’s, for example, generated a brief bit of controversy with its helpful guide for employees: the corporation advised employees in minimum wage jobs to have another job.

Given the gap between the actual cost of living and the pay of a minimum wage job, it is not surprising that quite a few of the folks who work for minimum wage avail themselves of state support programs, such as food stamps (which now goes by other names) and Medicaid. After all, they cannot earn enough to pay for necessities and certainly prefer not to starve or end up on the streets (although some are malnourished and struggling with housing). While one narrative about such people is that they are living easy on federal support, the reality is rather different—most especially for the working poor who have families, for those who are endeavoring to attend college or who hope to start a business.

Obviously enough, one large source for the funds for these programs is the taxpayer. That is, those who pay taxes are helping to subsidize those who received state support while working minimum wage jobs. However, there seems to be another equally plausible way of looking at the matter: the taxpayers are subsidizing those who pay minimum wage to their employees. That is, these employers can pay their employees less than what they need to survive because other people pick up the tab for this, thus allowing the employers to increase profits. If this is correct, those of us who pay taxes are involved in corporate socialism.

It could be countered that the taxpayers are not subsidizing the employers, such as McDonald’s. After all, the money for Medicaid and such are not going to the corporation, but to the workers. The obvious counter is that while this is technically true, the taxpayers are still contributing to sustaining the work forces for these employers, thus subsidizing them and allowing them to page sub-survival wages.

It could also be contended that the employer has no obligation to pay workers enough to survive on without the addition of state support. After all, there are plenty of poor people and if some cannot survive on minimum wage, then economic selection will weed them out so that those who can survive on less will take their place in the economic ecosystem. This, of course, seems rather harsh and morally dubious, at best.

Another counter is that the poor are to blame for their wages. If they had better skills, more talent, better connections and so on, then they would not be receiving that minimum wage but a better salary. As such, while it might be unfortunate that the poor are so badly paid, it is their own fault and hence their employers owe them nothing more. If the state wishes to help them out, that is hardly subsidizing the companies—they would, or so they might say, pay more for a better class of worker.

This has, obviously enough, all the moral appeal of a robber saying that it is the fault of her victims that they were not able to resist her crimes.

Overall, it does appear to be clear that the taxpayers are helping to subsidize those on minimum wage. While we could decide to let the poor slip deeper into poverty that would seem to be a wicked thing to do. It does seem to be reasonable to shift more of the cost to the employers who benefit from the work of the employees. After all, many corporations that are based on minimum wage workers have been making excellent profits—at the expense of the workers and the tax-payers.

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30 Responses

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  1. T. J. Babson said, on September 11, 2013 at 8:50 am

    Mike, this is great advice if your goal is to reduce the number of jobs available to people.

    Let’s say you double wages by government fiat. Do you think the companies affected will just sit there and do nothing?

    The fist thing they will do is to automate as many jobs as possible.

    The second thing they will do is to reduce hiring as a sharp increase in the cost of a burger will decrease sales.

    • Douglas Moore said, on September 11, 2013 at 10:36 am

      This is why totalitarianism is a necessary aspect of Communism. It all seems so nice until you try to put it into practice and see that people won’t comply.

      • Michael LaBossiere said, on September 12, 2013 at 1:29 pm

        Actually, a communist system cannot be a totalitarian system. After all, communism would be devoid of coercion and the state. What we call “communism” is actually just a mash up of crappy public socialism, corruption, authoritarianism and dictatorship.

        • WTP said, on September 12, 2013 at 2:40 pm

          Yes, communism is the perfect system. In your head. Do you ever ask yourself why do these societies always fall into a mash up of crappy public socialism, corruption, authoritarianism and dictatorship? See Venezuela. Oil-rich state run into the ground thanks to muddle-headed philosophers who think they can control things and decide for themselves what “fair” means. Just like Mike.

          • magus71 said, on September 21, 2013 at 7:19 am

            • magus71 said, on September 21, 2013 at 7:30 am

              These types must be shamed at all costs. They will ruin what we’ve worked so hard to make in the last 200 years. These are not the people who built our great country. They couldn’t build anything.

              The perfect example of Nietzsche’s slave morality.

            • WTP said, on September 21, 2013 at 7:51 am

              “The lack of resources that the USSR had relative to America”

              Russia has huge natural resources. It’s the largest country by land mass. When you consider the former USSR, Ukraine, etc. it’s loaded with oil, farm land, minerals, etc. that’s what the Germans wanted when they invaded in 1940. And notice how proudly she states that she has a masters degree. Do you suppose she is just naturally ignorant and impervious to knowledge or was she educated to be that way? Or is she simply a liar? Gotta be one of the three.

              Also amused by the douche bag with the ring in his nose. Metaphorically challenged. Confident, though.

            • magus71 said, on September 21, 2013 at 8:25 am

              Liberal intellectuals like Mike cannot stand the fact that the market was not “designed”. The need a system, and cannot believe that a just system can work without a grand controller.

            • Michael LaBossiere said, on September 21, 2013 at 6:12 pm

              Markets are designed in the sense that they are created by human beings. However, they tend to be poorly maintained-we shamble from crisis to crisis. The pattern is crisis, corrections, complacency, corruption, collapse. Our “free” market is rather like having an 18 wheeler rolling along at 100 mph, with people sometimes grabbing at the wheel. Hit tree, repeat.

              Also, the system is rigged-it is hardly a free market with free competition. As TJ has noted, the corporations lobby the state to make them into winners and to see to it that others become losers. This is done at the behest of the “capitalist” corporations, not the alleged socialists.

            • magus71 said, on September 22, 2013 at 7:07 am

              I put designed in quotations for a reason. It is not controlled enough to satisfy liberal intellectuals. They want to control every aspect of life. I am not a “free” market proponent, though I’m much more in line with Friedman than the people who think that burger servers should make 15 bucks an hour (I’m assuming that means burger servers in university cafeterias, too. That was my job when I was in school). I propose more economic nationalism. Our policies have driven jobs overseas. The trade deficits we put up with are the largest in history, we sacrifice our own people. In that aspect, the free economy has hurt Americans. And I’m an American nationalist to the core. I’m not for any company being able to damage the US. I’m not for our government being able to damage the US.

            • WTP said, on September 21, 2013 at 10:45 pm

              The drama. Puh-lease Mikey. You want to see a train wreck, look at ANY of the countries we’ve discussed here and elsewhere. Venezuela , Cuba, Russia, even your closet fav China. You AGAIN have no freaking clue as to what is going on outside of the comfortable US of A. Government interference in markets is one of the major factors in these crises. Especially this last one. Mike has little grasp of what markets are all about and is in no position comment, let alone criticize.

              When mike whines about the market not being free, he uses that as an excuse to seize power over it and thus make it even less free. When has mike objected to the specifics TJ has mentioned? The Solyndras, the GMs, etc. What rhetorical sophistic crap.

          • magus71 said, on September 21, 2013 at 8:27 am

            Socialism is force. Again, a necessary aspect of communism is totalitarianism. Intellectuals are very poor in their understanding of humans. Thus, the call for communism.

            • T. J. Babson said, on September 21, 2013 at 11:56 am

              Watch out for those philosopher kings. One of the most telling criticisms of Plato’s Republic is that no one like Plato could have flourished in such a system.

            • Michael LaBossiere said, on September 21, 2013 at 6:15 pm

              Why not? It is designed to be a meritocracy. Given Plato’s abilities, he should have done quite well in his ideal state. Of course, Socrates made it clear that this state was all but impossible. But, that is fine: his objective was to examine justice in the soul by drawing an analogy between the soul and the state (as he said, scaling up to the state level would make it easier to “see”).

            • WTP said, on September 21, 2013 at 10:51 pm

              Socrates made it clear that this state was all but impossible. But that is fine…

              So how Plato would have faired in his own “republic” is about as relevant a topic as how Theodore Cleaver would have faired in the Brady Bunch.

  2. T. J. Babson said, on September 11, 2013 at 9:07 am

    The real question that you should be asking is why so many Americans are reaching the age of 30 without acquiring any marketable skills?

    • Douglas Moore said, on September 11, 2013 at 10:44 am

      This rarely occurs to liberals. Liberal arts degrees only go so far in carrying a civilization. I hold to my thesis that we are collapsing as a civilization. This is bleeding into all parts of our society. I’ve ranted ad nauseum about how the military appears to me to be an entity that’s utterly failing. I instinctively sensed that it was now a “Hollow Force” (Google the definition). Yesterday, a 24 year veteran Army 1st Sergeant, with every accomplishment patch you can imagine on his uniform, said at a training seminar: “We are no longer a good Army. We cannot perform the basic battle drills from 15 years ago. We do not train or lead well, we are failing.” This is exactly what I see. We are not the best Army, man for man in the world. We jsut aren’t. Not the worst, but not the best. We have massive advantages in the air and sea, due mostly to economic power. We cannot win wars as we are now. This is in large part due to the quality of basic material the military gets from the population.

      • WTP said, on September 11, 2013 at 10:53 am

        This is in large part due to the quality of basic material the military gets from the population.


        And why are the military’s raw material so weak? Education and the media dumbing down the population.

        Magus, does it concern you that the PC that now goes on in basic training might also have something to do with the problem? AIUI, a recruit can now hold up some sort of card indicating to the DI that he is being over stressed. The many other tools for breaking down the recruit so that you can build him back up again have been taken away from DI’s, or so I’ve heard.

        • Douglas Moore said, on September 11, 2013 at 11:16 am

          There is no “stress card” in army basic training. There may have been a few classes in which this was experimented with, but i can say my class in 2008 had no such thing. That said, PC is destroying our military. More properly put, it’s the feminization of the military. The focus is on safety, not warfighting. It is just as a mother would run the army if it were filled with her sons. The admission of females to front-line positions is not a cause of our problems, it is a symptom showing us the change in focus.

          Even children’s upbringing makes them far softer than ever before. Little is expected of them as children. Freighteningly, we still get the best of our society in the military. 75% of people 17-24 years old cannot serve becasuse they are too fat, too sick, or cannot pass the ASVAB entry exam. Link here:

          http://www.wired.com/dangerroom/2009/11/75-of-potential-recruits-too-fat-too-sickly-too-dumb-to-serve/

          This is from “Cultural Marxism”, a deliberate attempt by some to change things. I just returned to my garrison office. I have to manage the people here and try to get the best out of them. It’s a trying thing. I told my wife today that few here are reliable. They will stop doing what they should if I’m not watching. Several of them –Intelligence Analysts whom are supposed to have some of the highest ASVAB scores in the military, got “waivers” for their test scores to get this occupational specialty. 3 of these soldiers in my office scored below the needed on their ASVAB, and cannot write a proper paragraph, or communicate effectively. There are only 6 enlisted soldiers in the office, including me. Two soldiers are on physical “profile” meaning they cannot perform physical training in the morning. I helped another soldier lose 47 lbs in Afghanistan, just so he could reenlist. I get back home and one of my sergeants is 25 lbs over Army regulation weight. It’s like shoveling back the tide.

          I can no longer worry about the army at large, only those immediately around me. I take the same view with my kids. I cannot control to any great extent what happens to our society, but I can make sure my kids get the basics that so many today do not get.

          But America, we’re doomed.

          • Douglas Moore said, on September 11, 2013 at 11:24 am

            A soldier from New Zealand, while speaking with an American NCO in Afghanistan, said: “Wow, your Army is really….safe.” He had a wry smile.

            Our general officer peaked rather early in American history. The civil war produced the best generals and the strength people showed during that war show just how much we’ve lost. Our best defense is two giant oceans, not our military.

            “Every attempt to make war easy and safe will result in humiliation and disaster”~William Tecumseh Sherman

  3. WTP said, on September 11, 2013 at 10:47 am

    Mike believes that businesses exist to give money to employees. Mike speaks of things he has no ability to understand.

    Seriously, TJ…Do you still believe that Mike is a “soft” socialist?

    • T. J. Babson said, on September 11, 2013 at 11:23 am

      I think he is a reflexive Democrat. This is how Dems think. Look at Obamacare. You make businesses pay a huge tax on full-time employees and, amazingly, you get fewer full-time employees and more part-time employees. Dems were surprised by this and are still in denial.

      • WTP said, on September 11, 2013 at 12:16 pm

        reflexive Democrat? Is that the new PC term for knee-jerk liberal? Is this a back-pedal from soft socialist? Mike is consistently anti-business, anti-free enterprise aside from the lip-service he pays to B&E. Basically, when push comes to shove, Mike believes that all your monies belongs to us. When leftist ideas hit the inevitable wall of reality, per Magus totalitarianism is a necessary aspect of Communism. He’s a believer in the Labor Theory of Value, a fanboy of Emma Goldman, etc. etc. etc. These are not traditional mainstream Democrat beliefs.

        • T. J. Babson said, on September 11, 2013 at 2:38 pm

          Agreed. But today’s Democrats are not traditional Democrats, either. We have heard a lot about how “extreme” the Tea Party is, but very little about how far left the Democrats have lurched since Clinton.

          Today’s Dems see Government as the answer to every problem. Wages too low? No need to get skills, we will just force businesses to pay you more. Just remember to look for the “D” on election day–and vote early and often!

          • WTP said, on September 11, 2013 at 4:51 pm

            In general, they think that they can simply decree things and make them so. Economics and foreign policy are similar in their vastness and complexities. Entities will always do what is in their own self-interest. Disregard the fact that others have self-interests and you’re in for trouble. Such is how we got into this whole Syria mess. “I shall draw a red line”, says the King. Never considering whether or not he had such power, never thinking about first getting his ducks in a row, Never thinking about the consequences, never thinking that other people (like Putin) have power too and will take advantage where they can. Never thinking how far over a barrel he has put himself and, by extension, us. Never thinking. Because the sycophants in the media and academia have always given him the praise and adoration that validates him. The same applies to Hillary and Kerry and just about every leader in the Dem party (and sadly, some GOPs). And when they get their fingers burned, they want to blame everyone else but themselves for their failure to take responsibility. And we return to economics…

  4. magus71 said, on September 12, 2013 at 3:39 pm

    Mike,

    Do you think there is anything to be said for a system not being perfect so as to make better people? People can abuse the system as much as they are abused by it. An example is children. Parents can damage their children by doing everything for them. Eventually they can become menaces to society.

  5. magus71 said, on September 12, 2013 at 6:53 pm

    Is this really poverty?

    American poverty just ain’t what it used to be. A new report from the Census Bureau found that 80.9% of households considered poverty stricken have cell phones along with their landline phones, and 58.2% have computers. 96.1% of those in “poverty” have televisions, and 83% have some sort of DVR.
    The percentage owning refrigerators? 97.8%
    Gas or electric stoves? 96.6%.
    Microwaves? 93.2%
    Air conditioning? Over 83%.
    Washer? 68.7%
    Dryer? 65.3%
    People still don’t mind washing dishes, apparently; only 44.9% surveyed had a dishwasher.

    http://www.breitbart.com/Big-Government/2013/09/11/Americans-in-Poverty-Have-TVs-VCRs-Cell-Phones-Air-Conditioning

  6. magus71 said, on September 23, 2013 at 11:56 am

    Mike, if your house needed painting and you didn’t have time to do it, but wanted to hire someone to do the work, and one person was willing to do the work for $10,000 and the other for $5,000, which person would you hire?

    • WTP said, on November 4, 2013 at 6:03 pm

      And no answer to this question in 6 weeks.

  7. WTP said, on November 4, 2013 at 6:02 pm

    Mike’s dreams may soon be answered. McDonald’s may soon cease to “exploit” their workers. Automation of the job is on its way. In Europe, where labor costs are considerably higher, McDonald’s is automating the cashier process.

    McDonalds recently went on a hiring binge in the U.S., adding 62,000 employees to its roster. The hiring picture doesn’t look quite so rosy for Europe, where the fast food chain is drafting 7,000 touch-screen kiosks to handle cashiering duties.

    Of course the lefties are still not happy.

    McDonald’s Europe strikes another blow against human interaction

    http://news.cnet.com/mcdonalds-hires-7000-touch-screen-cashiers/8301-17938_105-20063732-1.html


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