I was fortunate enough to be a union member and worked for a Fortune 500 company for 38 years.My fellow workers had their union officers negotiate for working conditions, good wages and a Cadillac healthcare benefit plan (a gold standard plan that has low deductibles and excellent benefits that cover even the most expensive treatments and low co-payment for prescription drugs).
The union also worked closely with management and Congress for safety standards and a government controlled excellent pension plan. However, even with self-independence, 90% of all workers today don’t have the same ability to bargain for good wages and benefits.
Unfortunately, while most corporate CEO’s can negotiate for lucrative wages, stock options and the best of perks and benefits, most workers don’t have the same negotiating power.
Wages over the last 35 years have been stagnant, barely keeping up with the Consumer Price Index, all while technology and automation have greatly improved productivity and profits.
Wages for nearly 30% of all workers are at or below the poverty level. Thus, most of these low-income workers and those with children depend on government subsidies for food, shelter, utilities, healthcare and other basic needs.
It’s not realistic to think that these low-income citizens will be able to save monies for college or a healthcare savings planeven if tax credits are made available.
These folks seldom eat out at a fancy restaurant or enjoy a vacation or the frills of life that many often take for granted if they are middle class or high income earners.
They already have great difficulty saving for a “rainy day” and are usually just a pay-check from disaster.
In just 16 rural counties in western Nebraska with a small population, nearly 80% of the residents are dependent on some entitlement benefit or subsidies for living or healthcare costs. And all 16 counties are included in 25 of the poorest counties in the nation. And, all 16 counties voted for Donald Trump for president.
These folks can only dream of a better life.
Many politicians are anxious to cut entitlement or social benefits such as Medicaid, Medicare, Social Security, CHIP, WIC or other important programs. They have it all wrong. If healthcare subsidies are cut or eliminated, they have it all wrong. If education programs are cut back or eliminated, they have it all wrong. If the Earned Income Tax Credit or the Child Tax Credit for low income earners is reduced or eliminated, they have it all wrong.
However, if decent and fair wages were to be paid, then most of these things can be purchased without additional government entitlement costs or subsidies. Bring these folks up out of poverty and our tax dollars will no longer be needed to help them out.
Then these folks will pay full taxes and enjoy a good, healthy, quality life without the government having to provide critical aid.
Cutting back on these important programs will only increase the debt and do more harm, create stress, burdens, crime, sickness, bankruptcy and even cause early death.
Giving corporations and big business additional big tax breaks (they already have plenty of tax loop holes) will not create consumer demand, but rather add to the nearly $3.5 trillion already socked away, mostly off-shore. The average corporation after deductions pays only an 8% tax rate. Some pay no taxes at all. Or with new tax reductions, CEOs may get even bigger salaries or perks. There is no real proof that big tax breaks create lots of quality new jobs or will make the economy grow over the long term.
It hasn’t held up in the past and it won’t work now.
Besides, cutting entitlements and social subsidies such as healthcare and then giving huge tax breaks to corporations will do little to reduce the national debt. After W. Bush gave tax breaks and invaded Iraq during his administration, the national debt went up $10 trillion. Then came the worst recession since the great depression when Obama was elected. Bailouts, Obamacare and getting the economy and employment back to normal brought another $10 trillion in debt. Now the Congressional Budget Office estimates new planned tax cuts and increased military spending will add yet another $10 trillion under the Trump administration.
But good wages can create consumer demand, which in turn increases business opportunities, which in turn puts more tax dollars in the coffers, which in turn makes the community more socially acceptable. Doing the opposite will only be destructive for business and workers alike.
Capitalism can thrive and expand with consumer demand from increased wages, making the community a more vibrant economy. It worked great in the state of Washington and guess what, unemployment reached a record low there. This policy can also work well elsewhere. Then more families can afford to save for college or for a health savings account or pay for healthcare costs and even enjoy community events or outings. It’s a win, win situation for all.
However, if there is no political will to do the right thing with increasing wages then it is important to leave the social programs mentioned above intact, and leave the tax revenue base already in place to pay for these programs.
A careful evidentiary approach of the facts for any social, healthcare, educational and tax base revenue changes should be considered before making any radical or harmful changes.
Any changes call for thoughtful and moral consideration, using sound judgment and putting human needs first.
Pope Francis gets the last word on this issue and he recently gave his opinion about being a Christian:
“A totally double life: ‘I am very Catholic [Christian], I always go to Mass [church], I belong to this association and that one; but my life is not Christian, I don’t pay my workers a just wage, I exploit people, I am dirty in my business, I launder money.”
To read more on this topic, read Seattle’s billionaire Nick Hanauer’s editorial opinion “Confronting a Parasite Economy” at: http://prospect.org/article/confronting-parasite-economy
Or: Thomas Piketty on the inequality and the economy at: https://www.theguardian.com/commentisfree/2016/nov/16/globalization-trump-inequality-thomas-piketty
Or: Robert Reich “How Capitalism is Killing Democracy” at: http://foreignpolicy.com/2009/10/12/how-capitalism-is-killing-democracy/
Or: Emmanuel Saez “Wealth Inequality in the USA since 1913” at: http://www.nber.org/papers/w20625
Or: David Kay Johnson “The Myth of Healthcare’s Health Care’s Free Market” at: http://www.newsweek.com/2014/01/03/myth-health-cares-free-market-244994.html
By John Hasenauer, a former railroad worker living near Harrison.