By Paul Buchheit
It’s a vicious circle of hypocrisy: Americans dependent on the safety net are urged to “get a job” by the same free-market system that pays them too little to avoid being dependent on the safety net.
Theft, Part 1: The Average U.S. Household Pays About $400 for Safety Net Programs for Low-Wage Workers
According to the Economic Policy Institute, $45 billion per year in federal, state, and other safety net support is paid to workers in the bottom 20 percent of wage earners. Thus the average U.S. household is paying almost $400 to employees in low-wage industries such as food service, retail, and personal care.
Blame: Accusing the Poor
Paul Ryan said that social programs “turn the safety net into a hammock that lulls able-bodied people to lives of dependency and complacency.” But 63 percent of eligible working-age poor Americans are employed, and 73 percent are members of working families. Yet in a show of hypocrisy by some of the leading safety net critics, Congress has killed or blocked or ignored numerous attempts to create better jobs for underemployed Americans.
Greed: Profits for Stockholders, Poverty Wages for Workers
A Demos study found that raising wages to $25,000 per year (about $12.50 per hour) for full-time retail workers would lift 734,075 people out of poverty.
It would probably help a lot more. An analysis of Bureau of Labor Statistics data reveals that about 22 million workers are underpaid (about a sixth of the total), over half of them in food service, cashiering, personal care, and housekeeping.
Paying everyone $12.50 (assuming full-time) would cost an extra $80 billion. That’s about 3 percent of total 2014 corporate profits. Three percent, compared to the 95 percent spent by S&P 500 companies on investor-enriching stock buybacks and dividend payouts.
Outrage: The Walmart Numbers
About two-thirds of low-wage workers are employed by large corporations with over 100 employees. The very worst offender is probably Walmart, which pays its estimated 1.4 million U.S. employees so little that the average Walmart worker depends on about $4,400 per year in taxpayer assistance, for food stamps and other safety net programs.
As Walmart was depending on us, the taxpayers, to pay $4,400 a year to each of its employees, the company was spending the equivalent of $5,000 per U.S. employee for price-boosting stock buybacks.
Theft, Part 2: More Taxpayer Money for the Big Corporations
Incredibly, even though every hour worked by an IRS auditor uncovers over $9,000 in misreported tax dollars among large corporations, IRS auditing for those firms has been cut back by one-third. Meanwhile, communities around the nation are relying on regressive property and sales taxes to make up the difference.
This is a second theft from the taxpayers, executed quietly for the benefit of the most powerful corporations, as poor Americans continue to get blamed for being poor.