A Philosopher's Blog

Who is Responsible for a Living Income?

Posted in Business, Ethics, Law, Philosophy, Politics by Michael LaBossiere on April 24, 2015

There is, obviously enough, a minimum amount of income that a person or family needs in order to survive—that is, to pay for necessities such as food, shelter, clothing and health care. In order to address this need, the United States created a minimum wage. However, this wage has not kept up with the cost of living and many Americans simply do not earn enough to support themselves. These people are known, appropriately enough, as the working poor. This situation raises an obvious moral and practical question: who should bear the cost of making up the difference between the minimum wage and a living wage? The two main options seem to be the employers or the taxpayers. That is, either employers can pay employees enough to live on or the taxpayers will need to pick up the tab. Another alternative is to simply not make up the difference and allow people to try to survive in truly desperate poverty. In regards to who currently makes up the difference, at least in Oregon, the answer is given in the University of Oregon’s report on “The High Cost of Low Wages in Oregon.”

According to the report, roughly a quarter of the workers in Oregon make no more than $12 per hour. Because of this low income, many of the workers qualify for public assistance, such as SNAP (better known as food stamps). Not surprisingly, many of these low-paid workers are employed by large, highly profitable corporations.

According to Raahi Reddy, a faculty member at the University of Oregon, “Basically state and taxpayers are we helping these families subsidize their incomes because they get low wages working for the companies that they do.” As such, the answer is that the taxpayers are making up the difference between wages and living wages. Interestingly, Oregon is a leader in two categories: one is the percentage of workers on public support and the other is having among the lowest corporate tax rates. This certainly suggests that the burden falls heavily on the workers who are not on public support (both in and outside of Oregon).

The authors of the report have recommended shifting some of the burden from the taxpayers to the employers in the form of an increased minimum wage and paid sick leave for workers. Not surprisingly, increasing worker compensation is generally not popular with corporations. After all, more for the workers means less for the CEO and the shareholders.

Assuming that workers should receive enough resources to survive, the moral concern is whether or not this cost should be shifted from the taxpayers to the employers or remain on the taxpayers.

One argument in favor of leaving the burden on the taxpayers is that it is not the moral responsibility of the corporations to pay a living wage. Their moral obligation is not to the workers but to the shareholders and this obligation is to maximize profits (presumably within the limits of the law).

One possible response to this is that businesses are part of civil society and this includes moral obligations to all members of that society and not just the shareholders. These obligations, it could be contended, include providing at least a living wage to full time employees. It, one might argue, be more just that the employer pay a living wage to the workers from the profits the worker generates than it is to expect the taxpayer to make up the difference. After all, the taxpayers are not profiting from the labor of the workers, so they would be subsidizing the profits of the employers by allowing them to pay workers less. Forcing the tax payers to make up the difference certainly seems to be unjust and appears to be robbing the citizens to fatten the coffers of the companies.

It could be countered that requiring a living wage could destroy a company, thus putting the workers into a worse situation—that is, being unemployed rather than merely underpaid. This is a legitimate concern—at least for businesses that would, in fact, be unable to survive if they paid a living wage. However, this argument would obviously not work for business, such as Walmart, that have extremely robust profit margins. It might be claimed that there must be one standard for all businesses, be they a tiny bookstore that is barely staying afloat or a megacorporation that hands out millions in bonuses to the management. The obvious reply is that there are already a multitude of standards that apply to different businesses based on the differences between them—and some of these are even reasonable and morally acceptable.

Another line of argumentation is to attempt to show that there is, in fact, no obligation at all to ensure that citizens have a living income. In this case, the employers would obviously have no obligation. The taxpayers would also not have any obligation, but they could elect lawmakers to pass laws authorizing that tax dollars be spent supporting the poor. That is, the tax payers could chose to provide charity to the poor. This is not obligatory, but merely a nice thing to do. Some business could, of course, also choose to be nice—they could pay all their full time workers at least a living wage. But this should, one might argue, be entirely a matter of choice.

Some folks would, of course, want to take this even further—if assisting other citizens to have a living income is a matter of choice and not an obligation arising from being part of a civil society (or a more basic moral foundation), then tax dollars should not be used to assist those who make less than a living wage. Rather, this should be a matter of voluntary charity—everyone should be free to decide where their money goes. Naturally, consistency would seem to require that this principle of free choice be extended beyond just assisting the poor.  After all, free choice would seem to entail that people should decide as individuals whether to contribute to the salaries of members of the legislatures, to the cost of wars, to subsidies to corporations, to the CDC, to the CIA, to the FBI and so on. This does, obviously enough, have some appeal—the state would operate like a collection of charity recipients, getting whatever money people wished to contribute. The only major downside is that it would probably result in the collapse of civil society.

 

My Amazon Author Page

My Paizo Page

My DriveThru RPG Page

Follow Me on Twitter

24 Responses

Subscribe to comments with RSS.

  1. T. J. Babson said, on April 24, 2015 at 8:18 am

    I don’t understand why 1/4 of the workers in Oregon have no job skills. Mike, how can this be?

    • Michael LaBossiere said, on April 24, 2015 at 11:44 am

      Why would you infer that they have no job skills? They surely have some, since they have jobs. Also, having job skills is quite consistent with crappy pay. Even people with the vaunted STEM degrees find themselves unemployed or underemployed.

      • WTP said, on April 25, 2015 at 12:16 pm

        having job skills is quite consistent with crappy pay. Even people with the vaunted STEM degrees find themselves unemployed or underemployed.

        If we could only harness the stupid in these sentences. Does the first one even contain enough meaning to qualify as a fallacy? Holding a philosophy degree is more consistent with not having a clue as to what you are talking about than having job skills is quite consistent with crappy pay. Seriously, I challenge anyone here to answer this one SAT style question in the context of consistency:

        Job skills : crappy pay

        ? : ?

        Much of everything else here is nothing more than, as TJ says, polemics against people Mike deems as unworthy of what they receive in life. There is no consistency, no rationalism. It basically boils down to what ever goes on in Mike’s head. There’s no arguing it, there’s no thinking. There’s no real experience or understanding of others. It’s just stupid shit Mike says without knowing what the hell he’s talking about.

        And no, this is no ad hominem. This is reflection on literal nonsense such as having job skills is quite consistent with crappy pay. and the like bilged out here day after day after day. And all subsidized by the taxpayers of Florida and the U.S.

  2. T. J. Babson said, on April 24, 2015 at 8:25 am

    I don’t think anyone has a problem with helping out hard working poor people.

    But, as we live in a low trust society, the hard working people whose money is being taken by the state and given to the poor need to be reassured that those people are trying to support themselves and are not gaming the system.

    • WTP said, on April 24, 2015 at 10:19 am

      Does the phrase “The world doesn’t owe you a living” sound familiar? i know I heard it constantly while growing up. It’s about expectations. It disgusts me the number of people whom I have come to know about who are on “disability”, mostly due to drug or alcoholism. Hell, Winston Churchill was an alcoholic, Buzz Aldrin is an alcoholic. Depression is no excuse either. Many, many successful people suffer from it and they get over it by driving themselves to succeed. Meanwhile, I have worked with two blind gentlemen, one a very good friend, who while they have received extra training and assistance in the past to get a real education (i.e. STEM not STEAM…both are software developers) they receive nothing from the government except for the one guy who sometimes uses the disability transportation, Lynx here in Orlando. But that is virtually useless because they rarely show up on time and sometimes never at all. And if the stupid government of O’do would get out of the way of Uber, he’d probably be much better off.

      I have worked on and off with the poor and if there is one common thread I have seen it is low expectations. I have never met a chronically poor person whose car was relatively clean, who took care of themselves properly, who viewed success as something attainable as opposed to “luck”, who took pride in themselves and in what they can do. Now I have met people who had the qualities I just mentioned who were temporarily poor, but this was either because they were transitioning out of that mind set or because some terrible calamity had befallen them. And the latter group, FWIU climbs its way back. Everyone has the capacity to take care of themselves. The most damaging thing we do to the poor is tell them they are helpless without “assistance”. And many churches and charities are just as guilty of propagating this mentality as the government. Many, not all. Granted, my experience is far from universal but it is spread between several geographic locations and different kinds of “poor” across many, many years. And knocking the bottom rung out of employment opportunities by insisting on high minimum wages that go beyond what the job is worth is the biggest barrier in getting people out of poverty.

      • ronster12012 said, on April 26, 2015 at 9:19 am

        WTP

        ………………………………………………….
        “And knocking the bottom rung out of employment opportunities by insisting on high minimum wages that go beyond what the job is worth is the biggest barrier in getting people out of poverty.”
        ………………………………………………….

        Do you see mass third world immigration as knocking any rungs out for the poor?

        I do agree with you about your feelings regarding the whole entitlement mindset and all the industries that spring up to maintain that helplessness. It disgusts me as well. However, there was a time in your country and mine too when the system as a whole was designed to provide certain outcomes along with certain obligations.

        All that seems to have been eroded by idiotic regulations,costs and legal obligations that make those contemplating starting a business to produce goods or services think ‘how can I simply import it from China or elsewhere and save all the hassle’?

        Reforming the current system is difficult to impossible because of 1/stupidly selfish populations that think they can vote themselves handouts of various kinds 2/cynical(and probably practical) politicians who know that they will never get elected by telling the truth 3/ All those currently dependent on the system 4/All those who get to skim the systems with licences, fees, monopoly pricing etc. 5/ All those ‘advocating’ or helping the poor.
        The poor(as a class)don’t get to shape the system. You can tell them to get off their arses and individually that is correct but IMO it’s as simple as if you have ABC conditions in a society then you will get XYZ results.

    • Michael LaBossiere said, on April 24, 2015 at 11:48 am

      Well, not all top-income people are hard working folks. Also, the evidence seems to be that most of the non-disabled, non-children and non-retired poor are hard working-usually at multiple crappy jobs. These folks are also generating good profits for their employers-so the injustice seems to be that the hardworking folk you mention are filling the gap created by the employers who are underpaying their employees. Walmart, for example, could raise wages and still make large profits-thus reducing the burden on the hard working folks.

      • WTP said, on April 24, 2015 at 12:16 pm

        Also, the evidence seems to be that most of the non-disabled, non-children and non-retired poor are hard working-usually at multiple crappy jobs.

        You have “evidence” of this? Exactly how is “crappy job” defined? Not to mention “disabled”. This attitude that certain jobs are “crappy” and thus beneath the dignity of those working them is EXACTLY the sort of soft bigotry of low expectations that perpetuates poverty. People would do much better with the free advice offered by Mike Rowe in this article than the crap Mike L keeps pushing:

        http://www.lifebuzz.com/mike-rowe/

    • ronster12012 said, on April 26, 2015 at 8:50 am

      TJ

      “those people are trying to support themselves and are not gaming the system.”

      All systems are gameable and probably are gamed. Is there any industry or profession where the insiders/professionals don’t squeeze the last dollar out of it?

  3. ronster12012 said, on April 24, 2015 at 8:28 am

    Michael

    Nice touch that last para,,,,,voluntary payments for politicians and wars lololol.Can just see it now, political scum selling raffle tickets on the street to finance a war “that we just have to have”.

    As far as minimum wages and working poor/living income go……..just put a minefield across your southern border, and shoot any survivors. Not only will it enable the US to remain a unitary country in 50 years time and not have to worry about the border states ‘doing a Texas’ back to Mexico, it will also delay/destroy any elitist’s plans for a NAU(conspiracy theory?….maybe, maybe not). Mass third world immigration into first world countries damages the recipient country’s working class. It’s not just dumb shit me saying that but Professor Robert Rowthorn, Emeritus Professor of Economics at Cambridge University says that too, and he’s a lefty to boot….http://www.dailymail.co.uk/news/article-2712677/How-mass-migration-hurts-No-s-not-Mail-saying-verdict-Left-wing-economist-Cambridge.html

    Problem is that profits from third world immigration are privitized and costs are socialized.

  4. ajmacdonaldjr said, on April 24, 2015 at 12:41 pm

    Inflation is the real thief. Follow the US Constitution and have Congress coin money INSTEAD OF the private Federal Reserve, which loans money to the USG at interest and for profit. Since 1913 the people of the US have been indebted to what amount to a pay day loan company called the Federal Reserve… and the interest on this debt is impossible to repay. Inflation and the Federal Reserve is your thief. Not low minimum wages or Walmart.

  5. T. J. Babson said, on April 24, 2015 at 6:06 pm

    Median family income is around $50K. Two people working at $12/hr puts them at $48K, very close to the median.

    Mike, do you think you can just decree that the median family income should be raised?

    • Michael LaBossiere said, on April 25, 2015 at 11:06 am

      I have no power of decree, so no.

      That does assume full time employment. Also, even if median family income is around $50K, there is the very good question of whether that is enough to pay the bills, provide for retirement, and provide for the education of their kids.

  6. nailheadtom said, on April 24, 2015 at 10:10 pm

    Logic and experience show that minimum wage legislation increases unemployment. Aside from that, in a free society why should a third party intervene in voluntary contractual relationships? Furthermore, minimum wage levels are arbitrary. Rather than a $15/hr minimum wage, why not $25 or $50 or $100?

    • Michael LaBossiere said, on April 25, 2015 at 11:10 am

      Well, the state intervenes all the time to protect the interests of corporations. If that is acceptable, then so too would intervention on behalf of the workers. That is sort of what having a civil society is all about: having a third party to keep people behaving. Hobbes laid this out in his Leviathan as did Locke.

      Minimum wage need not be arbitrary-the original idea was it was the minimum needed to afford what was considered the basic way of life in a civilized state.

      • nailheadtom said, on April 25, 2015 at 1:05 pm

        Corporations are creations of the state, of course the state is interested in protecting their interests. People, on the other hand, come before the state and exist even without the presence of a state. Society itself has gotten along just fine without Hobbes’ Leviathan and still does in places lucky enough to have been temporarily ignored by the powerful. Why should apologies for the state by guys like Hobbes even be necessary if it’s such a great deal for the average person?

        A minimum wage is absolutely and inevitably arbitrary since no two wage earners require identical resources and no two wage earners provide the same level of productivity. Those whose productivity is not equal to the minimum wage will not be employed at all. Why is it that so much government activity is directed at mandatory compliance? If these ideas were so good, wouldn’t people be happy to adopt them rather than being forced at, eventually, the point of a gun?

        Civilized state? Would that be the US? A country that has had an official government policy of exterminating the native Americans who once owned the country in its entirety? A country that dropped two thermonuclear warheads on Japanese girls walking to school? A country that incinerates people near Waco, Texas because their religion is different? A country that operates unmanned aircraft halfway around the world to kill people that just happen to live in that area? What’s so civilized about that?

    • ronster12012 said, on April 26, 2015 at 8:38 am

      Tom

      “Aside from that, in a free society why should a third party intervene in voluntary contractual relationships?”

      It happens all the time. Want to pay a woman for some horizontal folk dancing? Want to change your consciousness with some non approved concoction? Want to put an extension on your house even?

      The state will involve itself in these transactions despite them being voluntary contractual arrangements along with thousands of other instances.

      Want to get rid of all those? Time for another revolution then!!!

  7. nailheadtom said, on April 25, 2015 at 5:29 pm

    From the LA Times:

    The first minimum wage laws were advocated by progressive economists on the assumption that if you forced employers to pay a “white man’s wage,” they’d only hire white men. As the sociologist E.A. Ross put it in the context of Chinese immigrant workers, in the early 1900s, “the Coolie cannot outdo the American, but he can underlive him.”

    The Davis-Bacon Act, still cherished by Democrats and their labor union patrons, was passed in 1931 to prevent blacks and immigrants from competing with all-white unions for federal contracts during the Depression. And Jim Crow laws certainly locked millions of blacks out of the middle class.

    Explicit racist justifications for regulations have disappeared, but the racial consequences of many regulations tragically endure.

    • ronster12012 said, on April 26, 2015 at 8:45 am

      Tom

      “Explicit racist justifications for regulations have disappeared, but the racial consequences of many regulations tragically endure.”

      ‘Racism’ is just propaganda aimed at white people. No one ever seriously accuses anyone else of the ‘heinous crime’ of waycism FFS. That should tell you that it is just bullshit. Same goes for ‘sexism’ and all the other ‘isms’ and ‘phobias’………..just designed to guilt us all for the benefit of others.

  8. TJB said, on April 26, 2015 at 11:53 am

    I think this is a real problem. It is essential that our society identify and promote real talent. I don’t think the Ivies have any monopoly on talent, but if you look at a company like McKinsey about the only qualification is having an Ivy League degree. I’m afraid Wall Street is like that as well.

    Pedigree: How Elite Students Get Elite Jobs Hardcover – May 4, 2015
    by Lauren A. Rivera (Author)

    Americans are taught to believe that upward mobility is possible for anyone who is willing to work hard, regardless of their social status, yet it is often those from affluent backgrounds who land the best jobs. Pedigree takes readers behind the closed doors of top-tier investment banks, consulting firms, and law firms to reveal the truth about who really gets hired for the nation’s highest-paying entry-level jobs, who doesn’t, and why.

    Drawing on scores of in-depth interviews as well as firsthand observation of hiring practices at some of America’s most prestigious firms, Lauren Rivera shows how, at every step of the hiring process, the ways that employers define and evaluate merit are strongly skewed to favor job applicants from economically privileged backgrounds. She reveals how decision makers draw from ideas about talent—what it is, what best signals it, and who does (and does not) have it—that are deeply rooted in social class. Displaying the “right stuff” that elite employers are looking for entails considerable amounts of economic, social, and cultural resources on the part of the applicants and their parents.

    Challenging our most cherished beliefs about college as a great equalizer and the job market as a level playing field, Pedigree exposes the class biases built into American notions about the best and the brightest, and shows how social status plays a significant role in determining who reaches the top of the economic ladder.

    • WTP said, on April 27, 2015 at 10:04 am

      Well if the talent isn’t real, McKinsey and others companies will fail, yes? I mean putting aside outside influence of seeking government favors, which are greatly driven by such Ivy League connections. The success or failure in a free market of companies like McKinsey either validates or refutes the value of those degrees.

      As much disdain I have for over-education, the failures and foibles of those so endowed do not necessarily overshadow those who actually got a valuable education. As much as it pains me to say this, not every highly educated and/or Ivy League grad is as big an idiot as those most visible. Maybe the McKinsey guys really are the smart ones and others are just not getting the point. Totally ignorant guess on my part as I have very little knowledge or following of McKinsey itself. Seems you’ve mentioned them before. Do you work for them?

      • TJB said, on April 27, 2015 at 12:10 pm

        WTP, I chose McKinsey to contrast with a company like Google, who is genuinely interested in talent. I have known some people who went to work for McKinsey, and it seemed to me that they were mainly interested in an Ivy league pedigree–but that was many years ago and things may have changed.

        Google has spent years analyzing who succeeds at the company, which has moved away from a focus on GPAs, brand name schools, and interview brain teasers.

        In a conversation with The New York Times’ Tom Friedman, Google’s head of people operations, Laszlo Bock, detailed what the company looks for. And increasingly, it’s not about credentials.

        http://qz.com/180247/why-google-doesnt-care-about-hiring-top-college-graduates/

    • Michael LaBossiere said, on April 27, 2015 at 12:11 pm

      There is interesting research on the qualities that result in “high positions” in society. As you note, social status has (and always has had) a very significant role. One reason I like running races is the fact that a race is a meritocracy: the best runner wins, regardless of connections, social class and so on. While there are obviously many factors that influence victory (genetics, time to train, ability to afford shoes, food and race entry fees) it comes down to talent, training and will.

      In social institutions, like corporations, universities and the government, people can just be hired and promoted above people who would be objectively better at the job. This, of course, tends to be a “self-correcting” problem in that institutions that fail to maintain competence slide into failure (sadly, often taking down plenty of innocent folks with them).

      Even in cases of what seems to be competition, it is reasonable to consider if the competition is the right sort for the job and if the talents needed to get the job are the same as needed to do the job well. To use the obvious example, what it takes to win an election is a different skill set than what it takes to be competent in that position.

      • ronster12012 said, on May 1, 2015 at 8:43 am

        Michael

        Talking about higher positions, taller people apparently earn more. http://www.livescience.com/5552-taller-people-earn-money.html

        Take that another step and I’d bet that (generally speaking), the more attractive a person is the easier the ride through life. Ugly people have it hard, especially if female.

        These things may not be ‘fair’, but there is absolutely nothing to be done about it.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: