I’m not opposed to the EITC, however, that program is costly.
Lizzie Maldonado
11

“I’m not opposed to the EITC, however, that program is costly. $66.1 billion in 2014, with an estimated 22%-26% of those payments issued incorrectly. Mighty efficient.”

Refundable tax credits for low income filers are prone to corruption because the cost of auditing a return (likely filed with the assistance of an unscrupulous tax preparer) is greater than the cost of fraud. The tax code is an ungainly mess and it contains too many provisions that are abused as a result, which is why I also proposed overhauling the tax code in addition to expanding the EITC.

“How is it better for taxpayers to foot the bill for corporate greed than for businesses to include living wages in their business models? … If Wal-Mart can’t afford to pay their employees $15/hour, then they must either cut executive pay, downsize, or go out of business, paving the way for employers like Costco to pay employees current wages for current times.”

Because a high minimum wage will simply automate many low-skilled jobs and it’ll be even harder for a person with no job experience and few credentials to acquire gainful employment. You seem to have unerring faith that automation and outsourcing will create more jobs, but I’m very skeptical. Labor force participation has been going down steadily for 15 years:

The reason why it increased so much in the beginning is because women entered the workforce. We’re in the midst of the IT revolution and increasingly lean supply chains and operations management is just a fact of life. Many companies have discovered that a lot of entry level jobs can be automated or outsourced for less money and they haven’t created enough jobs to absorb those displaced by technology and globalization.

Also, I’m sick of the Costco comparison. Costco’s average customer makes $100,000 a year and the company has a razor thin profit margin.

Turns out, the strategy of putting a big box wholesaler in wealthy suburban enclaves works pretty well. But there are only so many wealthy suburban enclaves in the country, and poorer neighborhoods need retail too.

My favorite blogger has an excellent series of “Wal-Mart v Costco argument are dumb” articles; I strongly encourage you to give them a read:

http://www.bloombergview.com/articles/2013-08-27/why-walmart-will-never-pay-like-costco

Re: Unions

Yes, I’m well aware of the concept of at-will employment. I see nothing wrong with it. There’s a difference between union busting as it was done in the past and “union busting” today. Wage theft as it concerns security screenings is a settled issue and the Supreme Court ruled, unanimously I should add, against the class.

Also, I’m basing my judgments on my peers…because we’ve actually had many extensive conversations on finance! In fact, I’ve encouraged them to save and invest more of their money than they have in the past (in which they essentially saved nothing) and I’ve given them guidance on how to do it. So yes, I am going to judge when I feel like I’m given enough information.

Lastly, I do know that there will be many efforts to drive down the cost of my wages (whether it’s through increased H-1B visas, awesome middleware frameworks, etc) which is why I am saving diligently. I’m converting my high wages into wealth because I don’t want to be 50 years old and unable to find a job that pays well enough to support the lavish lifestyle I’ve become accustomed to.

So many people have found themselves in that situation and I am making a conscious decision to not do what they did, because it’s stupid and financially reckless.

In the war of wages versus wealth, wealth has won. But the good news is it’s never been easier or cheaper to convert wages INTO wealth. Most people don’t do it because they lack the discipline, knowledge, and/or inclination to do so. It’s squarely on them.

Show your support

Clapping shows how much you appreciated Jay Sun’s story.