Income Inequality Indeed

These are my thoughts on the income inequality issue.  As a long-time business manager and owner I can tell you that while the thought of improving income to the lowest paid among us seems like a generous thing to do, and is probably a good campaign tactic for Democrats, it will backfire.  What always happens when the minimum wage is raised is that ALL employees expect a commensurate raise in order to “maintain scale”.  American workers demand income inequity.  This is how they measure their success.

Small adjustments don’t have a devastating effect, but an increase from $7.25 to $10.10^[3]  will mean either everyone gets a $3.00 an hour raise or entry level employees will be making as much as those who have been working hard for several years.

This across the board raise in salaries will be a major hit to the labor cost of every company in America.  Some companies will respond with lay-offs of the least essential personnel.  Most will respond by increasing the price of everything they make or do, thus pushing the burden of this wage increase back on the people it was supposed to help.  The end result is that no one benefits, everything simply gets more expensive… again.

As I see it, there are only two ways to achieve the leveling effect the liberals seek:

1. The government must mandate an increase of minimum wage AND mandate that no one else gets a raise.  Let’s see how popular that will make them.
2. Cut to the ultimate goal and just pass a law mandating that the standard wage of every American worker will be…say…$35.00 an hour.  Then a burger flipper at McDonalds gets $35.00 an hour and the CEO of Microsoft gets $35.00 an hour.  The electrical engineer at your power company gets $35.00 an hour and the receptionist at the front desk gets $35.00 an hour.

The biggest problem I see in any of this is that attempting to level the playing field of pay scales removes any and all incentive to work hard.  Perhaps one day mankind will develop to a state where personal satisfaction is derived from doing their best in all things; but today, by and large, people are greedy.  They want as much as they can get for as little effort as they can invest.

The welfare rolls are exploding with people who have discovered that they can earn a living by sitting at home doing nothing.  There are 39 US states where welfare will pay more than an $8.00 an hour job.^[1]  To be fair, some do so because they have no choice.  Some are really-truly handicapped.  Some have been laid off and can’t find another job.

But too many claim to be handicapped and are not, they just had a good disability lawyer.  Employers are reporting a sharp rise in applicants who want part time work so they don’t lose their government disability payments.  They want to work, but don’t want to lose the payment they get because they claim they can’t work.^{[6] [7]}

Too many are unemployed because they can’t find a job as good as the one they left, so they prefer to draw unemployment and SNAP rather than take a job that is beneath them but pays a wage.

When I lived in Wisconsin I worked with the state department of welfare: I’ve seen it first hand and can tell you stories of system abuse that would curl your hair.

According to the US Department of Commerce, 65,100,000  Americans were drawing some form of welfare as of Jan. 1, 2014.^[1]  According to the US Census Bureau, the current population of America (as of this writing) is 317,335,769.  If you do the math that means 20.5% of all Americans – one fifth of our citizens – are suckling at the government teat.  Again; some cannot do elsewise, but far too many can but choose not to.

And that does not count non-citizens, even illegal immigrants.  Census Bureau data reveals that most U.S. families headed by illegal immigrants use taxpayer-funded welfare programs on behalf of their American-born anchor babies.^[5]

There are far too many stories of people like Richie Parker for anyone to tell me that there are 65 million Americans who are so bad off that they can’t find something productive to do with their lives.

 

In order for Socialism to work (that’s what this “equality for all” is after all), in order for everyone to have equal opportunity to succeed, in order for everyone to own everything we must first get everyone to shoulder an equal amount of responsibility.  Everyone must be willing to contribute equally to the common good, not just take what they can get.

I’ll leave you with this,

“I have never understood why it is “greed” to want to keep the money you have earned, but not greed to want to take somebody else’s money.” ~ Thomas Sowell

That’s my two cents worth.  Feel free to toss yours in below.

 Income Inequality Sources

1)    http://statisticbrain.com/welfare-statistics/
2)    http://www.census.gov/popclock/
3)    http://www.huffingtonpost.com/2013/11/07/obama-minimum-wage_n_4235965.html
4)    http://www.youtube.com/watch?v=qiLDMBDPCEY#t=38
5)    http://cis.org/immigrant-welfare-use-2011
6)    http://articles.latimes.com/2012/aug/22/business/la-fi-mo-disability-claims-20120822
7)    http://disabilitiesnews.org/employment/disability-claims-are-on-the-rise-again/