Friday, June 06, 2014

The cure for predator corporations

If you are a corporation and you pay non-unionized labor so little that they can’t live on their salary without government benefits such as food-stamps, WIC, and TANF, then you are a predator corporation. You are taking profits from the labor of others, and not paying for it. Instead, the government is paying for it, and passing the bill along to the taxpayers. Some might say it is highly immoral to “wring[ your] bread from the sweat of other men’s faces, but let us judge not, that we be not judged.”

Anyway, it isn’t illegal.

Now, just about any solution to this problem will undoubtedly be condemned as “income redistribution” or, worse, “socialism.” Never mind that anytime you go into Walmart and pay 25 cents for a trinket that they got from China for 10 cents, your income is being redistributed to the Waltons and the Chinese.

But the Republican fetish for free markets regards the Waltons as geniuses who are simply playing by the rules and making money. Ain’t that what capitalism is supposed to be?

Here’s an idea which is so crazy, it just may work.
Supposed you passed a law that said that anybody who works for a non-union shop with more than 500 employees is ineligible for government benefits unless they are paid $15.00/hr.  The Republican anti-government crowd would have to at least acknowledge that it is not an expansion of the social safety net. 

They might even welcome it as a dismantling of what they see as a “welfare state.” Since, by its terms the law would enable some employers to pay union workers less than non-union workers it might be seen as a blow to the unions.

Most states and localities will see a savings from the reduction of need for social services. They can pass the savings along in reduced taxes. Or they can do a little infrastructure building, producing jobs and higher quality of life. Or they can undo some of the cuts to education that been necessitated by the recent reign of austerity.

But you know who isn’t going to like it? That would be the Walton family. You see, their business model doesn’t work without getting someone else to pay for their workers. What will they do when people refuse to work for them unless they are paid enough to live on? And by “paid enough to live on,” I mean, paid by their employers enough to live on. You see, it is just not worth it to work for the Waltons, without subsidies from the government. 

Maybe they will decide that unions aren’t such a bad thing after all. I doubt it, but as they say, it’s hard to predict the future. After all, unions have the power of numbers with which to negotiate a living wage. Maybe the Walton family will have to tighten their belts, though it is hard to imagine what they will have to do without. Maybe the CEO of McDonalds will have to scrape by 4.1 million a year (as he did in 2011) rather than the $13.8 million he was given this year. I think we can all agree that this is a bummer for him but it is not as bad as working for 30 hours a week and making $217.50.

It may be that prices at Walmart and fast food places have to go up. That’s not so bad, either. According to the laws of supply and demand, people may eat less Mickey D. You got a problem with that? It may be that the trinket that Walmart purchased in China for 10 cents to sell to you, may cost you 27 cents instead of two bits. Think of the two cent difference as the amount your locality saved on costs, and if you didn’t get it back on your tax bill, enjoy your new road, or your kid’s music class. By the way, if you would like to manufacture trinkets in American, to sell in your own trinket boutique, you are two cents closer to being able to compete with Chinese imports.

Talk this over with the next economist you meet,

“… and tell ’em Big Mitch sent ya!”