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Behind scenes look at Daily Show minimum wage segment
January 29, 2014 8:07 AM   Subscribe

Barry Ritholtz has a finance blog (Big Picture) and writes a column for Bloomberg. He was on the Daily Show with Samantha Bee and Peter Schiff discussing minimum wage in the American economy. He claims Wal-Mart and McDonald's are the two largest beneficiaries of welfare because a large percentage of their workers couldn't afford to work there without it.

He describes some of the details about how two hours of interview get cooked down to three minutes of onscreen appearance. The column he wrote that inspired the Daily Show producers is on the Bloomberg site here. Question + answer are one continuous unedited take.

(There are many previous links to Rithoz's Big Picture blog but mostly they are in dense kliuless posts. The kliuless metafilter user page is one guide to best of Barry.)
posted by bukvich (145 comments total) 32 users marked this as a favorite

 
I'm not sure which I like more:

"Samantha Bee showed up. She is a combination of hilarious and delightful."

or

"Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated."
posted by Slothrup at 8:13 AM on January 29 [56 favorites]


"Over the course of two hours, its pretty easy to say something stupid — especially when one of the funniest people on earth is two feet away making faces and saying very funny things. I hope I didn't embarass [sic] myself. We”ll find out at 11:06pm or so."

Excellent on all sides. Well, except for the whole Wal-Mart McDonalds' thing. While they are among the most ubiquitous and frequent violators; they are by no means the only ones. I get stuck on the same questions; how the #*( do we start fixing it if we can't get healthcare and wage and labor laws updated?
posted by tilde at 8:20 AM on January 29 [6 favorites]


Barry Ritholtz is always a good read. His 'Daily Reads' links to lots of interesting financial news, great to follow on twitter.
posted by readery at 8:23 AM on January 29 [2 favorites]


I like Barry Ritholtz and The Big Picture is one of my regular blogs I like to look at. He will occasionally do in-depth, link-heavy posts which seem to have a lot of good information, but a large number of the links go to a site called Washington's Blog, which upon a cursory search I did a while ago, I could find any info on. So I'm a little "eh" about it being used so heavily as a source. Otherwise, he compiles some good links and is interesting to read.

Also, this:

We should get corporate welfare queens off of the public teat. Regardless of your politics, it is an issue that politicians on both the Left and the Right can agree upon.

I think he would find is debateable.
posted by triggerfinger at 8:25 AM on January 29


Debatable, as in you think "welfare queens" are an example of the system working as intended? Frankly I think they are probably a myth.
posted by Brocktoon at 8:31 AM on January 29


Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated.

He could be a mefite!
posted by rtha at 8:33 AM on January 29 [6 favorites]


Frankly I think they are probably a myth.

I don't think corporate welfare queens are a myth, and that's what he was talking about.
posted by Ickster at 8:38 AM on January 29 [7 favorites]


I don't read financial news the same way I read generally, political stances often just have to be given weight. Barry pulls from all over, too.
posted by readery at 8:47 AM on January 29


I hope this Daily Show segment brings more people up to speed on this topic.

It's pretty clear, and has been for years, that corporations have abdicated all responsibilities to their employees. Minimization of unions, failing to keep the minimum wage up, rising healthcare costs are to blame but the largest driver is pure greed and disdain for people in your employ for the sake of returning profits to shareholders.

So if corporations have shrugged this off of their shoulders, our options are to let people suffer, or have the government step up. Guess which one the political right has chosen?
posted by fontophilic at 8:48 AM on January 29 [14 favorites]


I think he would find is debateable.

No it really isn't. What's debatable is the method. The left want to see a livable minimum wage. The right would rather cut the safety net and let the undeserving poor die in the ditch/interstate ramp.
posted by Talez at 8:50 AM on January 29 [5 favorites]


Slate.com has a feature on Linda Taylor, the woman that Reagan had in mind when he popularized the term "welfare queen."
posted by ogooglebar at 8:51 AM on January 29 [4 favorites]


That feature should be a movie.
posted by dabitch at 8:57 AM on January 29 [2 favorites]


Sorry, just noticed the Slate story was previously on MetaFilter.
posted by ogooglebar at 8:58 AM on January 29


Thanks for posting this. I watched the episode this am and was just going to start looking for the background info.
posted by Big_B at 9:03 AM on January 29


I don't understand how paying employees low wages makes WalMart a welfare beneficiary. It makes them evil, sure, but without a social safety net, does Walmart lose those employees? Theoretically it seems like that if poor people had no access to food stamps or medicaid, then those jobs would be in even higher demand, and so employers could actually pay less. Certainly without government aid, poor people could not be the consumers they otherwise might be...but almost every business benefits from that, not just those who pay at the low end of the wage scale. What am I missing here?
posted by stupidsexyFlanders at 9:07 AM on January 29 [1 favorite]


What am I missing here?

"We're not going to pay them more so you better give them money to eat or they'll die."
posted by Talez at 9:10 AM on January 29 [25 favorites]


> Sorry, just noticed the Slate story was previously on MetaFilter.
posted by ogooglebar


Det är okej. Vi vet att du har problem med sökmotorer.
posted by benito.strauss at 9:10 AM on January 29 [2 favorites]


Frankly I think they are probably a myth.

So corporate welfare queens didn't actually bring back the Sun? Who ate the Sun in the first place then, if not the Fenris Wolf?

The right would rather cut the safety net and let the undeserving poor die in the ditch/interstate ramp.


I doubt that's the plan. It takes a certain kind of self-delusion to think of modern society without certain mutual supports, but it also takes savvy to sucker people into thinking one thing (e.g. individual welfare = lazy people) while gaming the system to benefit from it, as ya do.
In this case by paying people less to maximize profit while laying the burden on taxpayers even as one derogates one's own employees for being lazy and on welfare.
Kinda neat bit of doublethink really.

I think the really stupid actually do buy into the idea and likely don't realize that there would be a massive die off with attendant cholera and typhus epidemics from overburdened waterways and sanitation infrastructure, plagues of rats and carrion eaters, tuberculosis from lapsed treatment programs, famine (who's working the factory fields?), etc. etc.

Not that the companies themselves aren't moronic for doing this. There's only so much room for lousy hamburger meat and retail, it's not like they're critical services.

I kind of like the idea of charging a company for the amount of public assistance an employee receives, I think it'd generate a lot, perhaps too much, redundant paperwork. But I see no reason a company should get away with paying starvation wages and expect everyone else to foot the bill.

McDonalds, IIRC, was built on teen labor. People who didn't need to pay their own rent because they lived with mom and dad. Times have changed.
posted by Smedleyman at 9:11 AM on January 29 [10 favorites]


Debatable in the sense that the GOP has very consistently opposed most if not all kinds of legislation that targets corporate subsidies, tax loopholes, etc. In theory, it makes reasonable sense that they this should not be a partisan issue (as Barry says), but I think the GOP has pretty well demostrated that reason and logic doesn't figure into their thinking at all. They don't even really try to hide it anymore. Anything that might hurt one of their large corporate donors is called anything from an attack on business to unamerican. If nothing else, they'll oppose it for no other reason than Democrats (and Obama) support it. They'll find a reason to justify their lack of support for something the Dems are in favor of after the fact.

It isn't the first sentence of the quote I think is debateable (I agree that the only real "welfare queens" are corporations), it's the second sentence.
posted by triggerfinger at 9:11 AM on January 29 [1 favorite]


Det är okej. Vi vet att du har problem med sökmotorer.

This might help.
posted by Talez at 9:12 AM on January 29 [1 favorite]


I don't understand how paying employees low wages makes WalMart a welfare beneficiary.

If people had to choose between being on welfare *or* working at Walmart for insufficient wages, what would they pick? (The problem with the third alternative you suggest -- no social safety net at all -- is that it very quickly leads to societal instability.)

McDonalds, IIRC, was built on teen labor. People who didn't need to pay their own rent because they lived with mom and dad. Times have changed.

I suspect this depends somewhat on where you live. If you live in an upper-middle-class suburb, it may still be true.
posted by Slothrup at 9:13 AM on January 29


I don't understand how paying employees low wages makes WalMart a welfare beneficiary.

Because it's either pay their employees a living wage so they can eat, or let the government pay for them to eat. Walmart is not the direct recipient of welfare, but they choose not to pay a living wage, so the government has to. So they're (indirectly) benefiting from welfare.
posted by triggerfinger at 9:13 AM on January 29 [15 favorites]


I love the "nobody goes hungry in a capitalist society because there is enough food to go around" line.

Love it.

It's like the entirety of human history up until the last 50 years never happened.
posted by Pogo_Fuzzybutt at 9:14 AM on January 29 [13 favorites]


I don't understand how paying employees low wages makes WalMart a welfare beneficiary. It makes them evil, sure, but without a social safety net, does Walmart lose those employees?

Maybe not, but I think it would lose them customers. Both because race-to-the-bottom wages leave people with no money to buy stuff at Wal-Mart and because I'd like to think a lot of people would refuse to shop there if the welfare safety net weren't obscuring how ruinously low their wages are.
posted by straight at 9:16 AM on January 29 [1 favorite]


What am I missing here?

A floor.

There's a lower bound to what you can pay your employees because they still need enough money to feed/clothe/house themselves. Drop below it and you're going to get smelly, unwashed workers who wear rags, shoplift food, and spread disease all over the place.

The fact that the government is picking up some of the costs to keep people healthy, fed, and housed means this lower bound is much lower than it otherwise would be, and you're directly benefiting from cheaper labor costs at the expense of taxpayers.
posted by RonButNotStupid at 9:17 AM on January 29 [40 favorites]


Good God, Peter Schiff is such a piece of shit. Every time I see or read about him he's even more disgusting.
posted by Sangermaine at 9:26 AM on January 29 [4 favorites]


You mean that was a real person, seriously espousing those views? I thought it was a knockoff Colbert character.
posted by Kirth Gerson at 9:32 AM on January 29 [2 favorites]


What am I missing?

The government is subsidizing low wages with welfare. People need a certain amount to live off of. Wages + Welfare = Minimum. If you increase one, you decrease the need for the other.
posted by blue_beetle at 9:47 AM on January 29 [1 favorite]


I don't understand how paying employees low wages makes WalMart a welfare beneficiary.

Walmart gains a benefit from the welfare. If we all pay for the starvation-wage workers to eat and Walmart does not, Walmart avoids a cost. That cost doesn't have to be "non-starvation wages." That cost might be "more taxes for more police" or "more contracted guards." Because if the workers don't get cash from somewhere they'll get it through violence if need be. But it'll cost Walmart something somewhere.

The damn taker deadbeat corporations need to understand there ain't no such thing as a free lunch. Looters.
posted by tyllwin at 9:50 AM on January 29 [6 favorites]


It makes them evil, sure, but without a social safety net, does Walmart lose those employees?

Yes. Without the safety net, Walmart wouldn't have employees, it would have an angry mob of starving people burning their stores down.

Basically, they are externalizing the costs of keeping their employees from demanding better wages on the state. What the robber barons did when they got the National Guard to assist in union-busting, Walmart and McDonalds do more subtly: they force the state to give handouts just sufficient to keep people from realizing how badly they're doing.
posted by Kadin2048 at 9:52 AM on January 29 [5 favorites]


thanks :P i've just been trying to follow along!
posted by kliuless at 9:54 AM on January 29


For the record Samantha Bee is the senior Daily Show correspondent and has the longest career there by a three year margin. linky.
posted by vapidave at 9:56 AM on January 29


There's a lower bound to what you can pay your employees because they still need enough money to feed/clothe/house themselves.

I see this a lot in these types of threads - that if Walmart/what have you didn't have welfare, then no one could afford to eat ever, or house themselves, or feed themselves.

And I think that's completely not true - it's just that people couldn't afford to singly house themselves. People couldn't afford to live at the standard of living that we in America take for granted, but that many other people in many other places in the world do not expect. People generally want their own, single apartment, for example - they don't want to share an apartment, and they especially don't want to share rooms - even though that's historically and elsewhere been a way of dealing with lowered income. I'm not sure if it's partially due to legal restrictions on rooming houses or what, but I know this is a thing not really generally done now.

We also have a lot of ready-made clothing, in ways that many people in other places do not. We socially demand that people wear all new clothing, and stigmatize used clothing, even when it's perfectly serviceable.
posted by corb at 9:57 AM on January 29


McDonalds, IIRC, was built on teen labor. People who didn't need to pay their own rent because they lived with mom and dad. Times have changed.

Yes, times have changed. The Bureau of Labor Statistics reports that currently half of all minimum wage earners are 25-years or older. Three-quarters are 20 or older. Minimum wage is no longer a teenage starter job.
posted by JackFlash at 9:58 AM on January 29 [2 favorites]


And I think that's completely not true - it's just that people couldn't afford to singly house themselves. People couldn't afford to live at the standard of living that we in America take for granted, but that many other people in many other places in the world do not expect. People generally want their own, single apartment, for example - they don't want to share an apartment, and they especially don't want to share rooms - even though that's historically and elsewhere been a way of dealing with lowered income. I'm not sure if it's partially due to legal restrictions on rooming houses or what, but I know this is a thing not really generally done now.

What? There is no state in the union where one can afford a two bedroom apartment working 40 hours a week on minimum wage. There are very few places you could afford a one bedroom apartment or even a studio working minimum wage. People working minimum wage have roommates already. God forbid you're a family and need to try and afford a two bedroom apartment and food either.

We're the richest country on earth and our attitude to the poor is "well you haven't tried to share a room yet, have you?"

We're supposed to be making progress as society not fucking people until we're back into the bad old days.
posted by Talez at 10:04 AM on January 29 [63 favorites]


I see this a lot in these types of threads - that if Walmart/what have you didn't have welfare, then no one could afford to eat ever, or house themselves, or feed themselves. And I think that's completely not true.

Just to be clear, at minimum wage, if you are lucky enough to be working full time, you bring home about $13,500 a year.
posted by JackFlash at 10:06 AM on January 29


Sure Corb. These are ideals we have as a society. They're not set in stone. Other societies have dispensed with them. Our capitalist system with its private ownership of business and property is also an ideal we have as a society. Other societies have dispensed with it. The Walton family, the Koch family, et. al. only seem interested in preserving the ideals of direct benefit to them. But they have no inherent right to cherry-pick like that.
posted by tyllwin at 10:07 AM on January 29 [2 favorites]


And I think that's completely not true - it's just that people couldn't afford to singly house themselves. People couldn't afford to live at the standard of living that we in America take for granted, but that many other people in many other places in the world do not expect. People generally want their own, single apartment, for example - they don't want to share an apartment, and they especially don't want to share rooms - even though that's historically and elsewhere been a way of dealing with lowered income.

Well, golly, when you put it like that, I guess I'm not mad that Wal-Mart aggressively busts unions for some reason — who knows why, maybe they hate the sound of those old Wobbly songs or something
posted by Rustic Etruscan at 10:15 AM on January 29 [4 favorites]


I mean, sure. There's totally legitimate reasons, from an ideological perspective, to be opposed to that sort of living. But to suggest that it's flatly impossible that any other way of living exist, or that Walmart could not survive paying exactly the same wages without welfare, is ignoring much of the world and American history as well.
posted by corb at 10:21 AM on January 29


corb, until you have some data on what these people's living situations actually are, maybe you should not talk about what you think they do vs what you think they should do.
posted by Steely-eyed Missile Man at 10:21 AM on January 29 [17 favorites]


//If you live in an upper-middle-class suburb, it may still be true.//

I live in such a suburb. One reason the teenage unemployment rate is 25% is that adults have taken those jobs.
posted by COD at 10:23 AM on January 29 [1 favorite]


But to suggest that it's flatly impossible that any other way of living exist, or that Walmart could not survive paying exactly the same wages without welfare, is ignoring much of the world and American history as well.

The worst part is that no one is suggesting that Walmart couldn't survive without the government propping up its workforce -- the worst part is that it quite obviously could, but that would mean that Sam's heirs (who collectively spend a tremendous amount of time and money fighting and eluding estate taxes) would only be worth several billion dollars instead of many billion dollars.
posted by Etrigan at 10:24 AM on January 29 [10 favorites]


corb : And I think that's completely not true - it's just that people couldn't afford to singly house themselves. People couldn't afford to live at the standard of living that we in America take for granted, but that many other people in many other places in the world do not expect.

You can downsize your expectations in life until you live in the most miserable hovel surrounded by forty other destitute people eating rats and barfing up plague, but that doesn't ever make it right, especially if the people employing you are living in the lap of luxury.
posted by RonButNotStupid at 10:25 AM on January 29 [20 favorites]


The question I have is did they do the spit-take in one take? All that Ritholtz said is that the interviewer got wet and he didn't. It looks like it might have been tricky and needed a few do over's to me.
posted by bukvich at 10:27 AM on January 29


One of the hilarious things about scum like the Waltons: if you asked them if they had a hand in becoming as rich as they are, they'd say "no way, I built it all myself!" Whereas the opposite is true, and is really an indictment of our government (and our society's lionization of these leeches): the reason they all have piles of money is because the rest of us are willing to pay their workers enough to get by so they don't have to.
posted by maxwelton at 10:32 AM on January 29 [4 favorites]


Also, re: Schiff's remarks
posted by Rustic Etruscan at 10:32 AM on January 29 [2 favorites]


People generally want their own, single apartment, for example - they don't want to share an apartment, and they especially don't want to share rooms - even though that's historically and elsewhere been a way of dealing with lowered income. I'm not sure if it's partially due to legal restrictions on rooming houses or what, but I know this is a thing not really generally done now.

In the suburbs where I live, only detached, single-family houses get built because (1) they're more profitable for the builders, and (2) residents don't want high-density housing because of the perception that it attracts crime and lowers property values.
posted by ogooglebar at 10:32 AM on January 29


corb: "But to suggest that it's flatly impossible that any other way of living exist, or that Walmart could not survive paying exactly the same wages without welfare, is ignoring much of the world and American history as well."

It's not about Walmart surviving. It's about American workers that you depend on to stock the shelves not having to live in the dirt. We have a society here that is striving for something better.
posted by Big_B at 10:34 AM on January 29 [2 favorites]


Just to be clear, at minimum wage, if you are lucky enough to be working full time, you bring home about $13,500 a year.

In California, where minimum wage is currently $8/hr, and will go to $9/hr in July, you'll get more like $16.5K a year. Of course, companies like WalMart aren't going to hire you full-time because then they'll have to provide benefits like healthcare.
posted by LionIndex at 10:37 AM on January 29 [3 favorites]


People generally want their own, single apartment, for example - they don't want to share an apartment, and they especially don't want to share rooms

This may be different in other parts of the country, but what I found while apartment-hunting is that unrelated/unmarried individuals who want to rent a property together must be found able to cover 100% of the rent on their own income in order to be approved for a lease.

But there are always refrigerator boxes under the bridge, I suppose
posted by trunk muffins at 10:43 AM on January 29 [7 favorites]


So they're (indirectly) benefiting from welfare.

No, they're not. They would only benefit if they would pay more in the absence of welfare. And I doubt that would be the case.
posted by jpe at 10:47 AM on January 29 [1 favorite]


trunk muffins: " But there are always refrigerator boxes under the bridge, I suppose"

Come on, we're not monsters. We'd rather have the employees live in company-owned dormitories and pay them in food cards. That's the American dream, right?
posted by tonycpsu at 10:54 AM on January 29 [2 favorites]


I see this a lot in these types of threads - that if Walmart/what have you didn't have welfare, then no one could afford to eat ever, or house themselves, or feed themselves.

I really don't get you. You don't like your tax dollars having to go to certain kinds of government assistance, but you are okay with large corps paying their workers so little that they actually have policies and guidelines and trainings on how to assist those same workers in signing up for public benefits. Why don't you have a problem with this?

Aside from having to get food stamps and such, it would benefit all of us if the likes of Wal-Mart paid its employees more because people who have money spend money and thus the economy spins.
posted by rtha at 10:55 AM on January 29 [21 favorites]


The question I have is did they do the spit-take in one take?

I believe they usually tape reaction shots separately, using the same camera. Sometimes, the back-of-the-head shot as the interviewer speaks is not even the interviewee's head; the shot is taped after he or she leaves, and somebody else is in their place.
posted by Kirth Gerson at 11:00 AM on January 29


So they're (indirectly) benefiting from welfare.

No, they're not.


Did you skip over the comments explaining the reasoning on this?

Because it looks like you skipped over the comments explaining the reasoning on this.
posted by Steely-eyed Missile Man at 11:03 AM on January 29 [7 favorites]


Corporate Amerca is making record profits. What the double h e l l happened to trickle down? Yes, you in the back? You say that more car elevators are now being installed?
Raise taxes. This bullshit notion that taxing the wealthy will stop growth is nonsense. People start businesses because that is DNA. Taxes were 90% in the Fifties, and OMG, wonderful infrastructure like the Interstate Hiway was put into place.
Raise the minimum wage, a high tide raises all boats.
posted by breadbox at 11:04 AM on January 29 [5 favorites]


So, The Daily Show has better journalistic ethics than 60 Minutes. Noted.
posted by ocschwar at 11:05 AM on January 29 [2 favorites]


The question I have is did they do the spit-take in one take?
I believe they usually tape reaction shots separately, using the same camera.
Second, it appears that TDS has some smart lawyers who’ve thought this thing through. All of the answers were recorded following each question in one continuous segment. When I screwed up or ruined a shot, they had to go back to ask the question again, with the response immediately following in the same shot.

In other words, they don’t cut up your answers or pull them out of context. Question, Answer, Question, Answer. I assume this keeps litigation from angry remote guests to a minimum.
posted by tilde at 11:06 AM on January 29 [3 favorites]


We also have a lot of ready-made clothing, in ways that many people in other places do not. We socially demand that people wear all new clothing, and stigmatize used clothing, even when it's perfectly serviceable.

Corb a) the above is not really factually correct in that many, many people wear used clothes and do so proudly; moreover, b) your comment above and the rest doesn't address many of the aspects of the video that I hope you watched (e.g., people taking care of siblings, families, the living costs associated with those.

It is, however, an interesting way to pivot to the talking point that these crazy teens with their fun cash that they spend on smartphones and Adidas, why are we worried about them. Which is of course the talking point the anti-raise guy spouted. It's like you watched half the video.
posted by angrycat at 11:07 AM on January 29 [13 favorites]


...with the response immediately following in the same shot.

OK, I don't believe that thing I believed any more ...
posted by Kirth Gerson at 11:19 AM on January 29 [1 favorite]


Asides from the effect on employees wages and benefits, Walmart also benefits from welfare from customer purchases.
posted by drezdn at 11:28 AM on January 29 [3 favorites]


Not that it doesn't happen, Kirth Gerson, but they've protected themselves from that. If you RTA, you'll see they set up two cameras to facilitate this. (Where you might have gotten it.)
posted by tilde at 11:32 AM on January 29


I think corb is right that even though Wal-Mart clearly benefits from the welfare benefits given to their workers, it's hard to look at the rest of the world (and US history) and say that if the welfare benefits were gone, Wal-Mart would be wise enough to pay their workers more.

I think the take-home message is both "Welfare benefits the whole economy, not just poor people" and "Wal-Mart ought to be paying it's fair share of the cost for their workers, either by paying workers more or paying more taxes."
posted by straight at 11:40 AM on January 29 [1 favorite]


The idea that Walmart is a welfare queen is interesting, but I think it's actually just a start. Under a guaranteed minimum income scheme, shitloads more businesses become welfare queens in the exact same way. And that would be a good thing.

I do take exception the bitching and moaning over the usual suspects. The reason is that there are even now shitloads of employers guilty of the same sin, yet it's the same tiresome rallying cry on the left, concentrating on Walmart like some kind of mandala to focus liberal scorn. The small businesses somehow aren't evil even when they do the exact same thing because their intentions are different or something. Once again, it doesn't matter when the result is just as shitty.

Low actual wages are the evil here. Emphasizing the symbol over the substance kills useful thought in favor of drawing lines in the sand. Pointlessly. Again and again.
posted by 2N2222 at 11:56 AM on January 29


straight: "I think corb is right that even though Wal-Mart clearly benefits from the welfare benefits given to their workers, it's hard to look at the rest of the world (and US history) and say that if the welfare benefits were gone, Wal-Mart would be wise enough to pay their workers more."

The topic here is the federal minimum wage, which means we wouldn't be asking Wal-Mart nicely to pay more, we'd be compelling them to. The minimum wage's real purchasing power has diminished significantly, while corporate profits (including Wal-Mart's) have gone up. There's no justification for allowing the real value of the minimum wage to decline -- if the equivalent of $10.75 in today's dollars was good enough for us in the 1970s, it should be good enough for us now.
posted by tonycpsu at 12:07 PM on January 29 [8 favorites]


I think Wal-Mart is an easy target because of the mountains of documentation, especially when it comes to wages and anti-union behavior. The small businesses also suffer directly due Wal-Mart's race to the bottom. They have to try and compete with them directly, or compete with each other on the supplier side.
posted by Brocktoon at 12:09 PM on January 29 [1 favorite]


I don't think many people here dispute that other companies (especially Wal-Mart's peers) are guilty of the same things. However, Walmart is especially egregious and it has been noted that they are large enough and powerful enough to set the standards for the rest of the industry.

Why Walmart Can Afford To Give Its Workers a 50% Raise
posted by triggerfinger at 12:12 PM on January 29 [3 favorites]


Hey, why not just put a tariff on Chinese imports, so that American manufacturers can compete on a level playing field? That'll reduce Wal-Mart's bottom line, and that government revenue can go right into social programs.
posted by mikelieman at 12:19 PM on January 29 [2 favorites]



Trickle down theory, baby, for your love!
I'm waitin' for your love
To trickle down to me, baby

You know the president said
You got to wait for the trickle down
You fill it up on the top now
And you wait for the overflow
I got my hands cupped up
I got my pockets turned out

I'm standing on the sidelines
And I'm waiting for the overflow
To trickle down to me
Trickle down, trickle down
Trickle down
Trickle down . . .

-- Oliver Lake
posted by Herodios at 12:27 PM on January 29


We've been cutting taxes for 20 years and wages have been stagnant.

Does anyone have any links to scholarly research on how long trickle down effects are supposed to take ?
posted by Pogo_Fuzzybutt at 12:31 PM on January 29 [6 favorites]


I find it so depressing that this whole debate is about raising the minimum wage to $10 an hour or so, but even that wouldn't make a huge difference in the declining middle class. We're arguing about taking half a step forward when we should be taking two or three big strikes forward.
posted by zardoz at 12:37 PM on January 29 [8 favorites]


Hey, why not just put a tariff on Chinese imports, so that American manufacturers can compete on a level playing field? That'll reduce Wal-Mart's bottom line, and that government revenue can go right into social programs.

They need to put a tariff on any imports where the cost of labor won't allow a reasonable standard of living.
posted by Talez at 12:42 PM on January 29 [4 favorites]


zardoz: "I find it so depressing that this whole debate is about raising the minimum wage to $10 an hour or so, but even that wouldn't make a huge difference in the declining middle class. We're arguing about taking half a step forward when we should be taking two or three big strikes forward."

Well when you're in a hole, the first step is to stop digging. Every year that goes by where we don't adjust the minimum wage means real pain for a significant number of people as inflation erodes the real value of their wages. An immediate 35%ish increase in their pay would help a lot of people. What's your alternative?
posted by tonycpsu at 12:44 PM on January 29


It's this notion that if the bottom whatever percent are made to suffer more economically, I don't know, donuts will magically materialize to feed them. No, they go to work hungry.
posted by angrycat at 12:45 PM on January 29 [3 favorites]


Does anyone have any links to scholarly research on how long trickle down effects are supposed to take ?

Part of the problem - and this is not just limited to supply-side economic effects, but really most economic theories - is that economic theories are created that are kind of a complete cloth. But very few people like the whole cloth - so they pick and choose the parts that they like, and then are surprised that the theory doesn't work. Or they sharpshoot or bargain away a part of the whole.

The idea that significant tax breaks will create significant innovation and supply, thus ultimately benefiting everyone in the form of cheaper new developments, is not one that can be tested by lowering an already high tax rate by a fraction. Proponents of supply-side economics will tell you that it is, because they're hoping it will be a wedge to get them more. Opponents will tell you that it's impossible that it would succeed even if given free rein. Both are wrong.

But supply-side economics doesn't produce immediately tangible benefits, but ultimately, later goods. I think the best example of this would be the "robber barons" of the Gilded Age. They had few restraints on their activities, and are pretty universally reviled now because of the disparity. But at the same time, they helped build America. Andrew Carnegie paid no income tax, but it can hardly be denied that he helped better the lives of millions of people.

And Wal-Mart, despite the low wages it pays, engages in a significant bit of charitable giving.
posted by corb at 1:06 PM on January 29


The idea that significant tax breaks will create significant innovation and supply, thus ultimately benefiting everyone in the form of cheaper new developments, is not one that can be tested by lowering an already high tax rate by a fraction. Proponents of supply-side economics will tell you that it is, because they're hoping it will be a wedge to get them more. Opponents will tell you that it's impossible that it would succeed even if given free rein. Both are wrong.

Thank you for your no doubt well-researched and empirically supported position. I also like how you slipped in that bit about lowering "an already high tax rate," when in fact taxes are quite low, speaking historically.
posted by Steely-eyed Missile Man at 1:13 PM on January 29 [16 favorites]


I think the best example of this would be the "robber barons" of the Gilded Age. They had few restraints on their activities, and are pretty universally reviled now because of the disparity. But at the same time, they helped build America.

But they would have built the exact same America if they had only been allowed to become filthy rich, instead of obscenely rich.
posted by ogooglebar at 1:16 PM on January 29


Andrew Carnegie paid no income tax, but it can hardly be denied that he helped better the lives of millions of people.

So, what you're saying is that good of society depends on Noblesse Oblige and the generosity of our betters ?

That seems remarkably anti-libertarian to me.
posted by Pogo_Fuzzybutt at 1:17 PM on January 29 [6 favorites]


I don't have more recent numbers handy, but in 2006, Wal-Mart gave $272 million to charity, which sounds great until you compare it to their profit of $12.2 billion for that year, which means they gave only 2.2% of their profit to charity. The median American gives 4.7% of their much-smaller-than-Wal-Mart income to charity.
posted by tonycpsu at 1:22 PM on January 29 [6 favorites]


I don't even mean to be critical -- they're frankly giving more than I expect a for-profit corporation to give -- but don't try to paint them as somehow making up for their low wages with charitable giving that's a fraction of what the average person in America gives.
posted by tonycpsu at 1:23 PM on January 29


In Which We Defend the Robber Barons Who Got Huge By Doing Every Filthy Thing They Could, Stayed Huge By Corrupting The Government, And Hired People To Beat And Kill Strikers And Trade Unionists
posted by Rustic Etruscan at 1:26 PM on January 29 [16 favorites]


And we all know charitable contributions are always given out of the goodness of that corporate person's heart and never ever for tax or PR purposes.
posted by Steely-eyed Missile Man at 1:26 PM on January 29 [11 favorites]


Now you are defending the Robber Barons? Good grief.
posted by Big_B at 1:39 PM on January 29


uh, strides.
posted by zardoz at 1:39 PM on January 29


not one that can be tested by lowering an already high tax rate by a fraction

What?

Tax rates in the USA are absurdly low, especially for people making gobs of money.
posted by feckless fecal fear mongering at 1:42 PM on January 29 [2 favorites]


The correlation between wage and income is tenuous enough to make a minimum wage argument a terrible use of political capital.

The largest driver of poverty is not low-wage work, but being out of work. A higher minimum wage will not fix this, and in fact a high minimum wage will only make it harder to get aid for the poor who are not able to find jobs. We're spending political capital trying to help 9% of the poor(Tables 18, 25, and a considerable number of folks who make above the poverty line.

A minimum income is a great thing, even if it benefits Walmart. The problem is that employees have few opportunities better than Wal-Mart, not that Wal-Mart takes advantage of the situation.
posted by politikitty at 2:33 PM on January 29


It doesn't have to be either-or. Of course we'd all love it if there were better jobs out there than low-end retail, but that's not an excuse to let corporations pay people poverty wages.

I also find your argument about political capital unconvincing. There is no amount of political capital in existence that could overcome the GOP's tooth-and-nail opposition to increasing the size of the safety net. Because of this, we have to find creative ways to get people money. A minimum wage might be anathema to some conservatives, but at least it plays into the narrative that people who work should be able to live a decent life without worrying about basic human needs.

And your 9% number is a severe underestimate of the people who would be helped by a minimum wage increase, since you're only counting the people who worked year-round full-time.
posted by tonycpsu at 2:45 PM on January 29 [6 favorites]


The largest driver of poverty is not low-wage work, but being out of work. A higher minimum wage will not fix this, and in fact a high minimum wage will only make it harder to get aid for the poor who are not able to find jobs.

This is a textbook pivot. Low-wage work at minimum wage is poverty level income, even for a single person and especially for those with dependents. Being out of work for long periods is another problem, yes, but please don't change the subject.
posted by zardoz at 3:37 PM on January 29 [6 favorites]


politikitty We're spending political capital trying to help 9% of the poor

Still a better investment than spending political capital to help 1% of the wealthy.
posted by RonButNotStupid at 4:08 PM on January 29 [12 favorites]


Supply side economics is the belief that rational convo mic actors will take free increases in marginal revenue/profit and for some reason, I assume out of the kindness of their hearts, change their behavior in a way that increases the supply of goods. Seriously, just do a little thought experiment with widgets or whatever: same investment/inputs/etc result in increased profits. What does a rational actor do but pocket them? (Here is a hint: prior to the tax cut, what did the company do with the profits?)
posted by Freen at 4:35 PM on January 29 [2 favorites]


The largest driver of poverty is not low-wage work, but being out of work.

The fact that we cannot help every poor person does not mean that we should not help any poor person.

A higher minimum wage will not fix this, and in fact a high minimum wage will only make it harder to get aid for the poor who are not able to find jobs.

Note that you change from "higher" to "high" between clauses. No one is seriously advocating a minimum wage that can be called "high" unless you're comparing it to the wage of a Cambodian garment worker. What people are advocating is a wage that makes it just slightly more possible to climb out of poverty. Higher minimum wages have essentially no effect on employment, probably because "the cost shock of the minimum wage is small relative to most firms' overall costs and only modest relative to the wages paid to low-wage workers."

We're spending political capital trying to help 9% of the poor

Nine percent of the poor is more people than live in Los Angeles. I'm okay with spending political capital to help four million people.
posted by Etrigan at 4:50 PM on January 29 [9 favorites]


Please don't think that either Walmart or the Waltons give to charity for any reason other than furthering their own self interest and ultimately, bottom line. It costs less for them to give to charity than it does to treat their employees fairly, plus they get the additional accolades every year for being number one in corporate charitable contributions. It's far cheaper for them to give $xx million to hunger charities than it is to cut into their own profits by $xxx million to raise wages so their own employees don't need to rely upon charity to eat.

From this article originally published in The Nation:

Walton and Wal-Mart giving serves as a reminder that philanthropy provides an alternative to taxation, a way for rich people and corporations to decide what to do with their extra money, as opposed to letting the rest of us decide through our elected governments.

-----

The Waltons’ philanthropy–and their hostility to paying their fair share of taxes–also needs to be viewed in the context of tax subsidies Wal-Mart has received for building new stores, which Good Jobs First places at more than $1 billion, an estimate that does not include the many other ways taxpayers subsidize Wal-Mart stores, for instance, through numerous forms of public assistance–Medicaid, Food Stamps, public housing–that often allow workers to subsist on Wal-Mart’s low wages. A report by the House Education and Workforce Committee conservatively places the latter at $420,750 per store; the Wal-Mart Foundation’s per-store charitable giving is just 11 percent of that amount ($47,222).

------

“The Waltons could be an enormous force for good,” says Responsible Wealth’s Chuck Collins. “As the company’s biggest shareholders, they could decide that Wal-Mart could pay a living wage. They could use their charitable dollars not to undermine public education but to boost educational opportunity. They could become major contributors to social good. But they’re not.”

One item in the Walton Family Foundation’s most recent IRS filing shows how uninterested this family is in true social responsibility: a measly $6,000 to something called the Wal-Mart Associates in Need Fund. Contrast that with the millions the family spends promoting right-wing causes, and it becomes painfully clear that the Waltons value conservative ideology far more than they value the human beings who have made them the richest family on earth.


Here are a number of other academic studies on the effects of big box retail and Walmart in particular.
posted by triggerfinger at 5:02 PM on January 29 [6 favorites]


Low-wage work is not poverty level income for a vast majority of those who make minimum wage. Only a quarter of minimum wage workers are in households making under 20k a year.

75% of the beneficiaries of a minimum wage increase make more than 20k. 50% make more than 40k. The largest beneficiary is the middle class, not those in poverty.

It's an expensive policy that is poorly targeted. When the minimum wage helps poor people, it's pretty much on accident. We can demand that companies pass on the costs to folks, which will impact the rich and the poor. Or we can raise taxes and guarantee a minimum income. The EITC has incredible bipartisan support, the minimum wage is one sided.
posted by politikitty at 5:04 PM on January 29


75% of the beneficiaries of a minimum wage increase make more than 20k.

No, 75 percent of the beneficiaries are in households that make more than $20K. As in, two people working full-time for minimum wage ($30,160).

We can demand that companies pass on the costs to folks, which will impact the rich and the poor.

Yes, by about a dime a day.
posted by Etrigan at 5:14 PM on January 29 [3 favorites]


So what you're saying is Mitt Romney's dependents need that federal minimum wage increase just as much as a single paren raising kids on minimum wage?

Household income is much more important than an individuals wage. That's my point. It's ridiculous to decide policy based on a fact that isn't well-correlated with who is living in poverty.
posted by politikitty at 5:24 PM on January 29


But if a single parent is raising kids on minimum wage, that household is making less than 20k a year. Why are you against increasing that household's income?
posted by RonButNotStupid at 5:33 PM on January 29


politikitty: " Or we can raise taxes and guarantee a minimum income. "

Can we? Tell me what your strategy is for getting that through Congress.

politikitty: ". The EITC has incredible bipartisan support"

The value of EITC for a single full-time minimum wage earner ($15,080) with no children is $0. If that same person can't get 40 hours a week year-round, they could be "lucky" enough to get a whopping $475 if their annual income drops to around $8k. Meanwhile, the value of an increase in the minimum wage to $10.10 is $5,928. Married folks do a little better, as do people with children, but the absolute maximum value of the EITC under any circumstances is $5,891, less than what the single earner would get from the minimum wage bump.

So, yeah, your case is incredibly weak on both the political reality and the comparative economic value of the policies to America's working poor.
posted by tonycpsu at 5:34 PM on January 29 [5 favorites]


I learned something today, which I probably should have realized sooner, but hadn't quite quantified yet.

The highest minimum wage in the U.S. appears to be in Washington State, at $9.19/hour. If a person works 40 hours a week for 52 weeks of the year (so no vacation or sick days), they would earn $19,114.20, before taxes. This is just for a single individual. Of those earnings, they are taxed by the Federal Government at 12.4% for Social Security, 2.9% for Medicare taxes, which comes to $2924.63. For 2013, the federal income tax is $2,423, for a single individual. So their total take home pay for the year, after taxes would be $13,766.56 (roughly with rounding errors benefiting the government). Washington State has no income tax, which makes this calculation a little easier.

So $13,766.56 at the highest minimum wage in the country. Out of that they have to pay for rent/housing, utilities, transportation to their job (if they have a car, car insurance), food, healthcare (including dental care), health insurance (because I have yet to hear of any company that pays minimum wage offering full healthcare coverage without some kind of deduction taken out of the employees base pay), and clothing. Oh, and don't forget some kind of telephone, either a cell phone, or a land line, because that is generally required in order to even get a job.

Divide that by 12 months, and you get $1147.21 (again, rounding) to pay for all of those recurring monthly charges in order to be a functional member of society. On a "thrifty plan", you can probably put your food cost at around $180 a month. So now you have $967.21. Rent/housing is going to be a minimum of say $400 (looking at average prices for rentals in the entire state of Washington, so not exact, but close enough). So we're now down to $567.21, and we need to pay utilities. Ballpark at $100, just to be safe (heating can be expensive). Ok, good, now we're at $467.21. Since we are obviously going to qualify for some kind of help due to the ACA for health insurance, we'll just zero that out for now. Transportation is tricky, but we'll assume public transportation. That's $50 (probably not accurate, but costs depend on where you are and assumes buying a monthly pass, which does offer some discount). We're down to $417.21. Clothes is going to cost something, but it's hard to calculate for due to not being a regularly scheduled purchase (most people buy clothes when they wear out, or if it starts getting cold and they don't have a jacket, etc). We'll be nice and say they'd have to go for $1200 over the whole year (including shoes, pants, shirts, socks and undergarments, outerwear), which takes an average of $100 out of each months earnings, so now we're down to $317.21. Telephone is probably going to run between $20 and $50 a month, depending on whether it's a land line or a cell phone, but we'll split the difference at $35, so now we have $282.21.

And this is living in an empty apartment, so you have maybe $3386.52 for the entire year to spend on furniture and entertainment. Don't forget, these numbers are also reliant upon you working 40 hours a week for 52 weeks a year. Start deducting $73.52 for every day you miss work (before taxes, too). This is also assuming that they are able to get and hold a bank account and either get direct deposit, or have enough money starting out that they can pay their first months expenses in advance.

We are also assuming that you are working 40 hours a week. Many, many, many minimum wage jobs are not full time. Why? Because full time workers quality for health insurance, which many employers do not want to have to pay for, so they limit the hours that their workers are scheduled per week. BLS site for figures

Side derail on this, into "economist zone": Meet Bobby, the Spherical Minimum Wage Cow.

Let's say they are able to maintain this equalibrium for 5 years, earning $3386.52 of savings every year. They've been able to save up almost $17,000 because they did not spend anything over what they have alloted for their necessities. We'll be really generous to our spherical cow and say they've saved up their money for their entire working lives, for a total of $159166.44 for 47 years of working at minimum wage (that would be working from age 18 to age 65). We'll be really generous and have a very financially savvy minimum wage spherical cow and give them an interest rate of 4% for their savings. Now, most of you will be surprised that they will have almost half a million dollars saved up ($450,222.22), but remember, this is assuming they have never spent a dime on anything but the necessities for 47 years. No bad luck, never gotten even a sniffle, been fully employed by the same employer at the same rate for 47 years. Most people would say "hey, that's a pretty nice chunk of change". And it is. But they never spend it. It's just sitting in savings. Their cost of living doesn't change when they retire. They have enough money to live at exactly the same cost of living for 45 years (again, spherical cow). Never married. No kids. No assets. Never bought a car, never bought a house, never ate more the $180 worth of food every month. There are a lot of nevers.

This is what people are asking minimum wage earners to do. Live perfectly with next to nothing. Never advance beyond a simple cog easily replaceable by millions of other perfect cogs.

Also, let's stop calling anything above the poverty line "middle class". Seriously? Middle class means people can afford things, even on reasonable credit. Not being in debt for several thousand dollars in order to look like they are successful. Middle class today is someone who will retire with assets, not someone who will retire and then rely on social security and savings to make ends meet. If you really want to discuss the shrinking of the middle class, you have to have a real metric to measure them by, and most people who think they are middle class really are not even close.
posted by daq at 5:35 PM on January 29 [29 favorites]


I will also note that Bobby, the Spherical Minimum Wage Cow does not own a television, only gets books and any kind of entertainment from the library (and never returns books late), and has no need for friends or social engagements of any kind (thus they do not belong to a church, so they do not tithe, no friends or family, so they never buy gifts during the holidays). In point of fact, Bobby is a horrible economic actor, as they do not spend any money other than what is necessary to survive, and thus do not contribute to most supply and demand curves. Bobby is a horrible Spherical Cow.

I do not like Bobby.
posted by daq at 5:39 PM on January 29 [10 favorites]


Heard this stat on the drive home: the 40 best-paid hedge fund managers made as much as 300,000 teachers last year.

We have lost our fucking minds.
posted by rtha at 5:51 PM on January 29 [6 favorites]


The fact that the government is picking up some of the costs to keep people healthy, fed, and housed means this lower bound is much lower than it otherwise would be

...until that was spelled out, I did not get that this is not what people got.

We also have a lot of ready-made clothing, in ways that many people in other places do not. We socially demand that people wear all new clothing, and stigmatize used clothing, even when it's perfectly serviceable.

Yeah, I think we should have switched to the futuristic silver unitard we were all supposed to be wearing by now driving around in our rocket cars.
Textiles are perhaps the cheapest thing to make and sell - artificial labeling and doofy social demands aside - and in many ways it's still slave labor.

Human suffering is an inevitable byproduct of artificially massively inflated profit margins.
Nothing wrong with making a buck. The shell game to slide bucks out of labor by depending on the government to subsidize cutting people piss-poor paychecks - different story.

Low-wage work at minimum wage is poverty level income, even for a single person and especially for those with dependents.
Not to mention the burden on the school system for parents working too much to reinforce lessons at home much less deliver a kid with a full belly in the morning. So now *I* have to pay for a hot lunch program for poor kids because mom and dad don't have the time because they're both working crap jobs. That's essentially taking money from me to put into the pocket of the guy who sends his kids to private school and pushes lobbyists to come up with ways to pass laws so he doesn't get taxed by schools the same way I do.

It's a delightful, complex, nuanced little swindle, and I'm not surprised not everyone gets it.


The fact that we cannot help every poor person does not mean that we should not help any poor person.

Y'know, part of the problem is no one with a job should be a poor person.

What's the movie, "In Time", where wealthy people have time, literally time like money implanted in their wrists and they can live centuries, and poor people barely make it past 25(?)
One can't help but think how contrived and artificial that is as a plot point and then think that, oh, yeah, it's contrived and artificial.

Slaves, even in the ancient world, while they were property, at least had their masters responsible for nourishing children. The child slaves were not allowed to work at hard labor (apparently took the Industrial Revolution for us to think that up).

No reason anyone who can pick up a shovel should starve. And they should not be held hostage to make Pharaoh feed them.
posted by Smedleyman at 5:53 PM on January 29 [2 favorites]


If Bobby the Spherical Cow lives in America, he can benefit from the EITC, SSI, Public Assistance, Food Stamps, Housing Assistance, Energy Assistance, Free or reduced price school lunches. He has access to Medicaid.

96% of households in poverty have a television. 80% have cell phones. 58% have computers. That thought experiment with Bobby is a long way from reality. Most poverty is temporary. Most folks take minimum wage jobs as a stop gap measure.

And you know, it should be more robust than it is now. But there is more history of Republicans supporting the expansion of the EITC than the minimum wage. Which is why I'm advocating that America should do that.

Regulation is a tax. The money is redistributed haphazardly in a way that is difficult to measure both the costs and the benefits, rather than easily noticed in the coffers and transferred to those in need. There are times when that's preferable. It's great to regulate water pollution rather than tax polluters until they stop. But when the benefits are murky and over half the beneficiaries are folks in households making more than 40k a year, it seems foolish to choose a huge tax over a small precise one.
posted by politikitty at 7:15 PM on January 29


Most poverty is temporary

You have no idea what you're talking about

It's great to regulate water pollution rather than tax polluters until they stop.

Yes. Because that makes it actually stop now, instead of waiting until some company decides the hit to their bottom line isn't worth poisoning the drinking water of, oh let's say everybody in part of Virginia.
posted by feckless fecal fear mongering at 7:23 PM on January 29 [8 favorites]


Where you live, a Costco worker needs to work 52 hours each week to make a secure yet modest living to support a family as big as yours (as a sole breadwinner). A WalMart worker would need to work 127 hours a week to achieve the same.

Check out the Mother Jones Costco vs Walmart Wage Calculator. If, like me, you are a single adult living in the pricey East Bay area of California (Oakland to Fremont) and, unlike me, have a child at home, best of luck to you.
posted by Bella Donna at 7:29 PM on January 29


96% of households in poverty have a television. 80% have cell phones. 58% have computers.

It always comes down to "These so-called poor people have luxury items!" because, of course, the existence of a television in a house means they can't really be that desperate, so making $15,000 a year is clearly enough for a single mother. QED.

Most folks take minimum wage jobs as a stop gap measure.

So why not make it a little bit easier for them?
posted by Etrigan at 7:52 PM on January 29 [7 favorites]


politikitty: "96% of households in poverty have a television. 80% have cell phones. 58% have computers. "

Sure, because we aren't living in 1955 and old TVs are actually worthless (don't believe me, try to give away a 27" tube); phone service is a requirement if you want get and keep a job and cell phones are cheap and can be bought regardless of credit score; and old computers are also worthless. Plus not everyone living in poverty was a) born that way (might have had capital items before dropping into poverty) or b) completely bereft of charity of either personal or institutional source. Heck when I was still doing support (way back when the Victoria Freenet was free) I used to take old machines, get them serviceable, and donate them to disadvantaged kids.

I bet most people living in poverty have indoor plumbing, sporting equipment, furniture and a microwave too. They might even have pets.
posted by Mitheral at 8:04 PM on January 29 [18 favorites]


While 29 percent of the nation's population was in poverty for at least two months between the start of 2004 and the end of 2006, only 3 percent were poor during the entire period.

If 90% isn't most, I'd like to know what is.

I'm not saying life should be harder for them. I'm saying that focusing on their wage is a terrible way to measure their well-being, and expanding the EITC and other programs are preferable to make their life better. It would be much easier to increase the EITC 2000 dollars than increase the minimum wage one dollar, and those programs increase the well.being of a person in poverty equally. For the same political capital of raising the minimum wage 2 dollars over four years, you could get a 4000 dollar EITC credit through that is permanently chained to CPI since it's administered through the tax code and not the Labor Department.

I only mentioned the current expenditures of the poor households to point out that Bobby the Spherical. Minimum Wage Pony is completely off base and doesn't resemble reality in the slightest. I clearly don't think they deserve no help, as I am proposing expanding current anti-poverty policy in each post. Just not the minimum wage.
posted by politikitty at 8:40 PM on January 29


But there is more history of Republicans supporting the expansion of the EITC than the minimum wage.

That depends on how you define "history."
posted by soundguy99 at 8:48 PM on January 29


96% of households in poverty have a television. 80% have cell phones. 58% have computers.

Oh sweet Christ will this trope please fucking die already? Thirty, forty, fifty years ago, televisions and computers were luxury items and a lot more expensive in real dollars back then. Cell phones have only been ubiquitous for just over a decade or so. So back in 1975, yeah, if you had a big TV, it was a sign of wealth, because no one had a big TV. If you had a computer, you must've been a rich genius or something, because no one had a computer. Cell phones...nuff said.

Consumer electronics are simply a lot cheaper these days and they are not a signifier of wealth like they used to be.
posted by zardoz at 8:52 PM on January 29 [12 favorites]


Consumer electronics are simply a lot cheaper these days and they are not a signifier of wealth like they used to be.

Not to mention that many people cycle in and out of poverty. When people have money, they buy things. When they don't have money, many people continue to keep the things they've already bought. Weird, huh?
posted by rtha at 9:02 PM on January 29 [11 favorites]


Banker Peter Schiff: Fracking dangers made up by private property-snatching socialists
posted by homunculus at 9:20 PM on January 29


when the benefits are murky and over half the beneficiaries are folks in households making more than 40k a year

Mm, yes, the sweet, sweet lap of luxury that is 40 fucking k per year for at least two people.
posted by Steely-eyed Missile Man at 9:45 PM on January 29 [5 favorites]


politikitty: " 96% of households in poverty have a television. 80% have cell phones. 58% have computers. That thought experiment with Bobby is a long way from reality. Most poverty is temporary. Most folks take minimum wage jobs as a stop gap measure."

Oy vey, this zombie meme again. Please go read this, and keep in mind that, in addition to the point made above that a functioning television can be had for next to nothing, people need to own a cell phone so that prospective employers to contact them, and they need computers to apply for hundreds of jobs so they can get a single interview. (A library computer is nice, but when there are three unemployed people for every job opening, you can't exactly take your time in responding to any offers you get.)

politikitty: "It would be much easier to increase the EITC 2000 dollars than increase the minimum wage one dollar, and those programs increase the well.being of a person in poverty equally. For the same political capital of raising the minimum wage 2 dollars over four years, you could get a 4000 dollar EITC credit through that is permanently chained to CPI since it's administered through the tax code and not the Labor Department. "

As I pointed out above, this political capital argument you keep going back to has no basis in fact. Yes, Republicans love nearly any tax cut they can get, but to increase the scale of a tax expenditure, you have to cut spending elsewhere, raise taxes elsewhere, or raise the deficit. Which of these is going to happen, and how?
posted by tonycpsu at 10:45 PM on January 29 [3 favorites]


I didn't scroll back to see who said it, but the highest minimum wage in the US is actually in San Francisco County, CA. The wage is $10.74/hr as of 1/1/2014. Also notable: San Francisco's unemployment rate is 5.2%. It's fallen dramatically from the peak in 2010 when it was about 10%, yet the minimum wage has risen steadily 7% in the same period.

It's expensive here - $10.74 isn't a living wage in SF. And we have plenty of income inequality problems. But it does point to two things:

1. Anybody who tells you that raising the minimum wage will absolutely decrease employment is wrong;
2. If you're waiting for the federal minimum wage to rise, you're waiting for the wrong people to act. If you want a new minimum wage, you could pass one in your own locality right now.
posted by kochbeck at 10:51 PM on January 29 [2 favorites]


If you want a new minimum wage, you could pass one in your own locality right now.

This is a pretty good point. And it's worth pointing out that all this discussion of the Federal minimum wage won't have any direct effect on people living in areas that already have a higher minimum due to state or local legislation, but where that amount is still low relative to the cost of living in that area.

Raising the Federal minimum would help people in areas where there isn't a higher state/local minimum (which is, ironically, mostly red state and rural areas), and it might inspire matching increases in higher state/local minimums eventually, but it's never going to be as high as people in high-cost urban areas want it to be... that would be unsustainably high for low-cost areas. Those higher cost areas are always going to have to depend on local legislation, and that local legislation is what really gets felt.

It would be a mistake to concentrate too fixedly on the Federal minimum and neglect state and local minimums. Also, it's been my experience that one person can have much more influence at the state or local level than at the Federal level (for good or ill); actually doing anything about the Federal minimum wage is probably beyond most of us here, but a group of suitably dedicated people could probably get a local minimum wage increase through.

There is a fairly interesting experiment going on in the DC area, where Maryland's PG County and DC itself just raised their minimum wages to $11.50/hr, while the Northern Virginia counties, which are currently prohibited from doing so, have not and remain at $7.50. As the areas compete both for employees and jobs it will be interesting to see how things unfold.
posted by Kadin2048 at 11:27 PM on January 29 [4 favorites]


[Comment deleted: please focus on the issues, topics, and facts at hand—not at other members of the site. Also, bizarre hyperbolic sarcasm isn't a great discussion device.]
posted by taz at 12:05 AM on January 30


Tax rates in the USA are absurdly low, especially for people making gobs of money.

It really depends on what you're comparing them to. Are you comparing them to the 0% income tax we had for the first hundred years of our nation's founding? The 5% of the initial income tax? The 7% that we had before the first World War? Or are you comparing them to the ridiculously high taxes of world wars? (In World War I, the top income bracket tax was a staggering 73%, but as soon as the war was over, it quickly dropped down to a top bracket of 25%. Then Hitler started moving and the tax rate started jumping up again - ending up in WWII with a freakish 94%). Then we had wars for the next thirty years - Korea, Vietnam, the Cold War, and so it lowered no more than to 70% - 50% as the USSR started crumbling, and when the wars were all over and the USSR gone, back to 28% as the top tax rate. Then we start fighting in a host of stupid miniature wars, and people see bodies being dragged through the streets, and the highest tax rate starts rising again to 40% - or 39.6%, which is 40% but presented in a way such that it seems less.

So what is low? The low of our grandmothers? The low of peacetime America?
posted by corb at 7:11 AM on January 30


wow so did during the world wars did all the rich people curl up and die or wut
posted by angrycat at 7:35 AM on January 30 [3 favorites]


corb: " So what is low? The low of our grandmothers? The low of peacetime America?"

If we have a sincere interest in answering that, then we need to look beyond top marginal income tax rates, because they aren't comparable between time periods due to changing income thresholds for the various brackets. What people really care about, and what can be accurately compared between different time periods, is the effective tax rate, which for federal income taxes, have been on a sharp, consistent downward trend for top 0.1% since the 1960s. Rates for the top 1% have been more steady, but have also fallen sharply since the Clinton era.

And I don't really get what you're on about with the war thing. We're always involved in some kind of foreign hostilities somewhere. Some of them are big and cost a lot of money, but the idea that Mogadishu was a precipitating event for raising taxes under Clinton is preposterous -- Clinton raised taxes because that's what Keynesians do during the good economic times.
posted by tonycpsu at 7:40 AM on January 30 [2 favorites]


Then we had wars for the next thirty years - Korea, Vietnam, the Cold War, and so it lowered no more than to 70% - 50% as the USSR started crumbling, and when the wars were all over and the USSR gone, back to 28% as the top tax rate.

The top tax rate dropped to 28 percent in 1988 -- the same year that the USSR won 161 Olympic medals.

Then we start fighting in a host of stupid miniature wars, and people see bodies being dragged through the streets, and the highest tax rate starts rising again to 40% - or 39.6%, which is 40% but presented in a way such that it seems less.

The Omnibus Budget Reconciliation Act was passed in August 1993. The Battle of Mogadishu was in October 1993.

And you're also leaving out the Bush tax cuts, which dropped the top bracket tax rate to 35 percent while we were fighting two decidedly non-miniature wars.
posted by Etrigan at 7:43 AM on January 30 [7 favorites]


Interestingly, and this just occurred to me - the Administration is saying that they will pay their contract workers higher minimum wage, and they are arguing that it should be higher for everyone, but they operate completely outside of wage and labor law when it comes to the military pay and show no interest in raising that.

For 2014, I see 1531.51 as monthly pay for an initial E1. Assuming the soldier works only 8 hour days in the actual work place - which is far from given, but we're being generous - then has two hours of PT and uniform change (exercise, mandatory daily in noncombat situations) - if we go by labor law, that hour should be paid at time and a half, which gives you 220 hours a month, which gives you 6.90$ an hour - below minimum wage, and below that of Walmart workers. And that's assuming they're not pulling 12 hour shifts, which is by no means given, it's not counting additional duties for worktime, or any of a host of other things.

If we have a sincere interest in answering that, then we need to look beyond top marginal income tax rates, because they aren't comparable between time periods due to changing income thresholds for the various brackets... the effective tax rate, which for federal income taxes, have been on a sharp, consistent downward trend for top 0.1% since the 1960s.

I mostly agree, though I think you're ignoring the bump of the 90s, but that's a minor quibble. Essentially, my concern is that wartime habits and overspending have tended to create a "new normal." The Cold War lasted a long, long time - an entire generation, and it usually takes a generation to forget. Taxes tend to increase during wartime - (yes, Etrigan, Bush minorly cut taxes during wartime, but I think he's an outlier. And good catch re the timing - my memory had Mogadishu and the tax increases happening at the same time, but it's easy to blend months together when you're twenty years away) but if the wars drag on long enough, it's easy to forget that the taxes were for the purpose of war, to think that they're for everyday purposes, and to start spending up to levels to match the income. (I also think that if people mentally realized that taxes raised during wartime, and felt the pinch themselves, they might be a little less willing to get into them, but that's a story for a different day).
posted by corb at 7:59 AM on January 30


corb : but if the wars drag on long enough, it's easy to forget that the taxes were for the purpose of war, to think that they're for everyday purposes

Yes. Because we all know that you can only raise taxes to fight wars and not for everyday purposes like funding quality public education, building national infrastructure for the benefit of commerce, or providing a social safety net to promote the general welfare of the people. That's just silly.

I get that you're concerned about the cart leading the horse when it comes to revenues driving spending, but if you could just actually look around for a moment and see how badly underfunded our social institutions are, you'd see that on a general scale we're so far from that being the case.
posted by RonButNotStupid at 8:09 AM on January 30 [1 favorite]


For 2014, I see 1531.51 as monthly pay for an initial E1.

Plus free health care, free food, free housing, free uniforms, no need for a vehicle just to get to work, and a passel of other benefits that push the effective wage well over minimum regardless of how many duty shifts Private Snuffy is pulling.
posted by Etrigan at 8:09 AM on January 30 [5 favorites]


And that's assuming they're not pulling 12 hour shifts, which is by no means given, it's not counting additional duties for worktime, or any of a host of other things.

An E1 is also pulling three hots and a cot - and granted, it's been a long time since I've been in - but they should make it to E2 out of basic and E3 in a year or less and E4 in two/three years. Faster, with incentives and waivers and so on.

I agree with you that military pay is low, especially given the risks, but using the base pay of an E1 is disingenuous.
posted by Pogo_Fuzzybutt at 8:11 AM on January 30 [1 favorite]


corb: "the Administration is saying that they will pay their contract workers higher minimum wage, and they are arguing that it should be higher for everyone, but they operate completely outside of wage and labor law when it comes to the military pay and show no interest in raising that."

You were just trying to make the case that military spending drives tax rates up. Now you want to say that pay raises should be based on a pre-set formula that ignores economic conditions, and would force us to raise revenue or borrow to pay for the pay raises irrespective of economic conditions. Can you please explain how these arguments are compatible?

corb: "For 2014, I see 1531.51 as monthly pay for an initial E1. Assuming the soldier works only 8 hour days in the actual work place - which is far from given, but we're being generous - then has two hours of PT and uniform change (exercise, mandatory daily in noncombat situations) - if we go by labor law, that hour should be paid at time and a half, which gives you 220 hours a month, which gives you 6.90$ an hour - below minimum wage, and below that of Walmart workers."

I'm all for raising military wages, but you can't do the "time and a half" overtime thing for exempt, salaried workers. When you're salaried and you work long hours, your hourly rate goes down. This is just as true for servicemembers as it is for salaried government workers, CEOs, etc.

You've also spoken favorably of employers using non-cash compensation like housing and meals, including your own time as a servicemember. I happen to think there's no substitute for cash, but you are okay with paying essentially slave wages, except when you're trying to use a misleaing hourly rate for salaried military workers to argue against the minimum wage. Do you really think you're fooling anyone here?
posted by tonycpsu at 8:12 AM on January 30 [6 favorites]


[tonycpsu/corb, please do not turn this into a thread that is just you guys arguing with each other while other people watch. ]
posted by jessamyn at 8:15 AM on January 30


Etrigan: "Plus free health care, free food, free housing, free uniforms, no need for a vehicle just to get to work, and a passel of other benefits that push the effective wage well over minimum regardless of how many duty shifts Private Snuffy is pulling."

I was ready to make this argument in the interest of fairness and then I remembered that when I'm working out I either get a generous living out allowance ($75-150 per day tax free) or I get camp pay and the employer provides room and board. Is it legal for American companies to make you buy your own uniforms? Here at most they can mandate a restrictive dress code.
posted by Mitheral at 9:01 AM on January 30


1. Anybody who tells you that raising the minimum wage will absolutely decrease employment is wrong;

Australia: USD$14.04/hr
Unemployment Rate: 5.8%
Youth Unemployment Rate: 12.7%

US: US$7.25/hr
Unemployment Rate: 7.3%
Youth Unemployment Rate: 16.3%

Australia learnt long ago that a strong middle class is the key for economic growth. The US is so bound by morality traps and representatives that would see the entire fucking country burn over a black male getting even a cent they're not entitled to.
posted by Talez at 9:18 AM on January 30 [2 favorites]


Is it legal for American companies to make you buy your own uniforms? Here at most they can mandate a restrictive dress code.

I think they can, but they're tax-deductible. But what I was going for with "free uniforms" is that while most people (especially the working poor) have a definite separation between (probably more expensive) Work Wardrobe and Non-Work Wardrobe, servicemembers (mostly) get the former for free.
posted by Etrigan at 9:24 AM on January 30




96% of households in poverty have a television. 80% have cell phones. 58% have computers. That thought experiment with Bobby is a long way from reality. Most poverty is temporary. Most folks take minimum wage jobs as a stop gap measure.


I want my poors in abject poverty wearing rags by god! Like the good ol' days!
posted by stenseng at 9:57 AM on January 30 [6 favorites]


One thing I wish we (meaning, very broadly, Americans) would consider is that our framing of economic issues is so very dependent on who we're talking about. When we discuss raising the minimum wage, we always end up talking about if those wage-earners really deserve it - we interrogate who they are (teenagers, adults working those jobs as a stop-gap, etc.) and what they do with the money they earn. When we discuss tax cuts for corporations, or whether or not a city will spend public money to build a new sports stadium, we do not (generally) ask who that corporation is and if they "deserve" that cut or those public monies. The benefit of the doubt is a given: Those corporations and so on will take that money saved by not paying additional taxes and do things with it that will benefit Everyone!

Why can't this same benefit of the doubt be automatic when considering minimum wage earners? I'm pretty sure that what they'll do with that additional money is...spend it. On stuff. Like food and cars and restaurant meals and shoes and whatnot (health care, rent, paying down debt, too, education, etc.).

There's been some stuff in the local press lately about all the tax breaks Twitter got as an incentive for being in San Francisco, and exactly what benefit those breaks are to people who live in SF but don't work at Twitter. It's been good to see that. I'd like to see more of that *before* the tax breaks are given, and I'd like to see it from the legislators.
posted by rtha at 10:16 AM on January 30 [4 favorites]


The fact that many of the beneficiaries are teenagers is important, because there are long term negative effects associated with exposing people to minimum wage jobs.

While the overall literature says the employment is largely unchanged, or only slightly negative, it is also pretty consistent in stating that a rise in minimum wage reduces training opportunities, encourages teens dropping out of school while still decreasing teen employment, thus reducing lifetime earnings.

Obama has been able to pass an extension of the EITC during his presidency, while his efforts to increase the minimum wage have mostly fallen flat. Why malign the political chances of the EITC when the minimum wage hasn't exactly been shown to a political winner in the current political climate?
posted by politikitty at 11:13 AM on January 30


Honest question: How is it that raising the EITC has "broad support" when it would have to be paid for by raising taxes, and is essentially a hand out (not my word, but borrowing from conservative vernacular) to the poor?
posted by Big_B at 11:44 AM on January 30


I'm in no position to evaluate the methodology of that NBER paper, but even assuming the methodology is sound, it'd only be germane to this discussion if there were an increase in the number of people "exposed" to minimum wage jobs, which would be assuming a fact not in evidence.

In any event, you're still not doing anything to demonstrate that an equivalent EITC increase would be easier to get through Congress. The fact that it was extended (i.e. not allowed to expire) doesn't in any way show that it would be possible to increase it. Of course Congress was going to let him keep an existing tax expenditure, but why would they allow him to increase the size of it without offsets when they've held up everything from food stamps to emergency unemployment compensation because they weren't "paid for"? What is your specific plan for paying for an EITC increase?

The beauty of the minimum wage hike is it doesn't show up on the federal balance sheet except when paying federal workers, which Obama was able to do with a simple executive order. You can't hand-wave away this distinction by simply saying the EITC wasn't allowed to sunset.
posted by tonycpsu at 11:49 AM on January 30 [1 favorite]


In 2009, ARRA expanded the EIC for married couples and families with three or more children.

It was in fact expanded. That expansion was extended in 2012.

The minimum wage doesn't show up on the balance sheet, but it sure shows up on the business communities legislative watch. When presented with the framed choice of additional costs of a minimum wage hike, or a smaller tax increase to fund an expansion of the EITC, you really think they're going to be bawling about the tax increase? Regulation is a tax increase to the businesses that employ minimum wage workers.
posted by politikitty at 12:00 PM on January 30


Matthew Yglesias points out how thin conservative "support" for the EITC is:
To the extent that interest in marriage can push social conservatives to support this kind of thing, so much the better. And, indeed, Marco Rubio recently called for a measure that would be very much along these lines. The difference is that as phrased Rubio's plan to boost EITC for the childless seemed to entail EITC cuts for parents. That's kind of perverse.
and expands on the fact that the GOP is pretty much opposed to paying for anything at this point.
posted by tonycpsu at 12:00 PM on January 30 [2 favorites]


And how many Republicans are openly supporting expanding the minimum wage?

Your own evidence says that Mark Rubio supports expanding the EITC for childless workers. But it's thin so it doesn't count? Is it thinner than Republican support for the Minimum Wage?

If it's easier to convince Republicans to raise the minimum wage, why did efforts to increase it fail last year?
posted by politikitty at 12:24 PM on January 30


Big_B, because the EITC is a hand-out that was originally proposed by Milton Friedman, expanded considerably by Reagan and Bush, and seen as a smarter alternative to welfare. That still holds some weight to many conservatives.

While Republicans might prefer zero welfare and zero minimum wage, they do have to sometimes choose the least distasteful policy. A carefully targeted tax expenditure is easier to swallow than an unfunded policy mandate that costs considerably more to businesses.
posted by politikitty at 12:32 PM on January 30 [1 favorite]


politikitty: "In 2009, ARRA expanded the EIC for married couples and families with three or more children.

It was in fact expanded. That expansion was extended in 2012.
"

A $600 expansion for a small subset of all EITC claimants, as part of a stimulus package that was passed under very unique circumstances when the global economy was tanking.

From that data point, you extrapolate that an increase somewhere between 3-6x as large and for a larger number of claimants would be possible in the current climate, heading into mid-term elections with far-right Tea Party challengers chomping at the bit to attack any Republican who's voted for a single dime increase in the size of government.

Do you see why people wouldn't find this argument convincing?

politikitty: "And how many Republicans are openly supporting expanding the minimum wage?"

I'm not the one saying that either of these is possible given the current state of Congress. What I'm saying is that, of the two Democratic asks, one appeals broadly to the public and has far fewer political liabilities in terms of increasing the size of government or requiring offsetting funds. Given two things that aren't going to happen, you ask for the one that would be better policy overall, and if it has a broad political appeal, that has the potential turn around the political reality over time.
posted by tonycpsu at 1:08 PM on January 30 [1 favorite]


How is it that raising the EITC has "broad support" when it would have to be paid for by raising taxes, and is essentially a hand out (not my word, but borrowing from conservative vernacular) to the poor?

Raising the EITC doesn't necessarily have broad support right now, though I could easily see it doing so if there was Democratic willingness to expand the amount of people able to access it. Extend the EITC to middle-class families, and you might have a bipartisan deal.
posted by corb at 1:14 PM on January 30


Okay thanks for the honest answer. This is the first I've actually read about something I probably benefited from greatly in my life, and it just doesn't make a lot of sense to me now looking back. It seems to boil down to 1) make businesses pay higher wages or 2) make taxpayers pay more to subsidize the low wages. The latter of which makes sense from today's conservative viewpoint where CEOs are untouchable and the rest of society gets to suffer.
posted by Big_B at 1:15 PM on January 30


Corb: regarding tax rates, it is important to distinguish between the statutory and effective tax rates. While the United States has some of the highest statutory tax rates in the world, we have some of the lowest effective tax rates. Often, only the statutory rates are considered, while, in an economic sense, the effective tax rate is the most important.
posted by Freen at 2:16 PM on January 30 [2 favorites]


I like Milton Friedman's negative income tax idea: http://en.wikipedia.org/wiki/Negative_income_tax

Feels a bit odd agreeing with Milton Friedman, but hey, even Friedrich Hayek advocated for nationalized health care!
posted by Freen at 2:29 PM on January 30


Wal-Mart cuts outlook due to store closings

Wal-Mart Stores Inc said on Friday that bad weather and reduced food stamp benefits in the United States had dragged down comparable-store sales in the fiscal fourth quarter, more than offsetting a positive bump from the holiday season.

Nope. No Welfare Queens here.....
posted by Big_B at 9:15 AM on January 31 [1 favorite]


How is it that raising the EITC has "broad support" when it would have to be paid for by raising taxes, and is essentially a hand out (not my word, but borrowing from conservative vernacular) to the poor?

Given a forced choice between making the government pay and making businesses pay, the corporate wing of Congress will always hand the bill to government, rhetoric about drowning it in the bathtub be damned.

They would prefer neither, of course, so the hard part is getting them maneuvered into a position where it's either minimum wage or EITC, if you want one of the two.

The really perverse part is that I suspect by weight of numbers, there are probably a lot more red-state voters making Federal minimum (by virtue of living in states that don't have a separate higher minimum) than blue-state ones. Nobody in New York or California (as of 1/1/14 anyway), for instance, is making Federal minimum. EITC increases help nearly everyone, regardless of where they live, but in a rational world Republicans would seek to increase Federal minimums before EITC from a "bring home the bacon" perspective, because it disproportionately benefits their constituents (and Democrats the opposite). Yet more evidence that we live in a far from rational world.
posted by Kadin2048 at 10:22 AM on January 31 [2 favorites]


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