If there’s one thing that conservative and liberal economists agree about, it’s that old bromide about there being no free lunch.
That widget you are manufacturing contains raw materials, its construction takes labor, and its distribution and marketing must be paid for. Your facility and utilities cost money. Those costs–plus some profit–have to be reflected in the price, or you’ll go broke.
You may be able to gain a market advantage by shifting some of your costs to others–we all know of cases where pollution created during production is discharged into the air or water to be paid for by the community at large, rather than by being properly disposed of and the cost of that disposal factored into the product’s sales price–but if it’s a cost of doing business, someone has to pay it.
Market theory assumes that the widget manufacturer will pay all the costs of production, and then pass those costs on to the ultimate consumer, as part of the price.
Increasingly, however, taxpayers are assuming those costs.
Case in point: we are subsidizing the wages of a quarter of the people who have jobs today. A recent study from UC Berkeley and the University of Illinois found that fully 52% of fast-food workers receive public assistance–mostly Medicaid and food stamps–to the tune of $7 billion dollars a year. (McDonald’s workers alone got $1.2 billion of that.) One Wisconsin Wal-Mart costs taxpayers over a million dollars a year.
The United States now has the highest proportion of low-wage workers in the developed world. And as the report noted, every dollar taxpayers spend subsidizing corporations so they can continue paying their workers poverty wages is a dollar not spent on early childhood programs, or schools, or roads, or any other social good.
We need to have a national conversation about who is paying for that burger.
We can’t have that conversation because doing so requires an examination of empirical evidence and statistics, both of which are mistrusted by those on one side of the political divide as skewed liberal constructs. Facts that don’t match the constructed worldview simply aren’t facts, thus there is nothing to discuss. Walmart & McDonald’s create jobs for otherwise lazy takers, so they should be praised for doing so (so goes the logic).
Public Assistance has been “The American Way” for decades. It isn’t, or wasn’t, only employers such as Wal Mart and McDonald’s whose employees needed and qualified for this assistance. In 1972 I worked for the Indianapolis Police Department, my take-home pay was $64 per week. My ex-husband decided to punish me by paying his minimum child support for 5 children through the courts so that, in his words “you will be without money for a few months”. The thousands of fathers who refuse to pay child support are a major part of this problem. I was an employee of the City of Indianapolis and qualified for food stamps; they fed my family for approximately three months. When I found a better paying job within the City and the minimum support began coming from the court, I returned the food stamps with a letter two months in a row thanking them and asking them to remove my name from their rolls. The third month the food stamps were sent to me I took them to the office in person to stop them. I wonder how many recipients today have improved their situation but continue receiving public assistance, making no effort to end it. The system needs to be examined to find and remove those who do not qualify – especially those who lied and shouldn’t have been qualified in the first place.
Julia Carson did this as Washington Township Trustee; she and her staff made home visits to see first hand if recipients were qualified. Those who were not eligible were not only removed from the list of recipients but received legal notice to appear in court and to repay what they had received illegally. Not all the blame for these millions spent on Medicaid and food stamps should be placed on employers; the system needs to accept their share of this problem.
I believe in the time-tested concept of the corporate social compact. One of the tenets of that construct is that the corporation must be a good corporate/community “citizen”. Shoving your costs of doing business to the consumer is nothing but rank greed for more profit.
It is supposed to cost money to operate a company that sells to the public, even if they are solving a well-defined LOCAL public need. Otherwise, there is no corporation who does not at least find themselves in the bucket of potential corporation revocation.
How about we, as communities, refute the notion that the corporation exists solely for the purpose of increasing the bottom line profits for the shareholders? Maybe a bit of steel-nerved action by some Secretarys-of-State could at least gain the attention of abusers of the communities themselves, while charging those communities for the privilege.
Front page of the Star this morning; why do the Colts rate a bigger headline with picture than the article regarding Pence’s tax proposal which will effect home owners statewide? The fact that the NFL is tax exempt and our tax dollars are already supporting them is bad enough; the NFL is big business, not a religious organization. If Pence has his way all businesses will be receiving those free burgers along with large fries and a drink – apparently the NFL already receives these benefits. Think of the cost of infrastructure involved in all businesses; we homeowners will be paying for that. How many businesses in this state already receive tax abatements? Bosma’s foolish comment that the public reads Pence’s proposal as an immediate loss tomorrow of this money but it will actually be phased out over a few years didn’t fool me. We will still lose that $1 billion and have to make it up. Again; a spokesperson for the GOP is insulting our intelligence with stupid rationalizations for their proposed action. Even with the property tax caps that is still a gripe for many; my lower-middle class home was assessed at a higher rate which raised my property taxes last year even with my Homestead and Disabled/Senior exemptions. I WANT MY FREE BURGER – MAKE THAT WITH CHEESE – REGULAR FRIES AND DIET DRINK, PLEASE!
I have been reading a book Republic, Lost, by Lawrence Lessig. I read a section,about an imaginary restaurant. The restaurant is profitable, but instead of paying for a garbage pick-up, they toss their waste, and trash into a river behind the restaurant. The restaurant would not be profitable if they paid for trash pick-up. The Restaurant does not pay all its costs, instead they “Socialize” their costs of garbage pick up and privatize the profits. Economists have a term for this cost “externalities.” The Big Box Stores and Mega Restaurant Chains have externalized their cost of doing business by paying low wages and having the rest of society pick up the tab on Medicaid and Food Stamps for their employees. Bottom line the Mega-Corporations are imposing would should be their costs of doing business on Society as whole.
The very visible display of this Socializing the costs and Privatizing the Profits is our Tax-Payer Paid for Professional Sports Stadiums. The Colts and Pacers should have to actually pay all the costs of doing business, i.e., building stadiums, maintaining them and paying Property Taxes on them. The NFL is through some twisted logic a Non-Profit.
Catch phrases always need translations.
Phrase – “There is no such thing as a free lunch.”
Translation – “I’m sticking you with the tab.”
Thus it has always been.