Too Much Money Without Work & Too Little Money For Work Are Both Bad For Everybody
The amount of money people get and how they get it is like Goldilocks’ porridge. It has to be the right amount of money received for the right amount of work or it will really screw people up.
David Grace (www.DavidGraceAuthor.com)
Too Much Money Without Working For It
If people get money too easily, if you just give your kids money without requiring them to do something to earn it, you will likely end up with spoiled, ruined adults. No one has to explain the terms “spoiled rotten” and “spoiled rich kid.”
Remember the kid who ran over several people and then told the judge that he had been spoiled so often and so regularly that he never learned right from wrong.
Examples of free money ruining lottery winners’ lives are so common as to be a cliché.
Remember the disastrous welfare programs of the sixties and seventies?
There isn’t any question that giving people money without work will almost always end badly.
Too Little Money For Too Much Work
On the other hand, too little money, people either having no jobs or jobs that pay so little that full-time workers are still living below the poverty line, also makes a mess.
Poverty is an accelerator for other problems.
Poverty is an open container of societal gasoline.
Poor Diet — Poor Health
With poverty comes a poor diet.
Put someone on a diet of fat, sugar, caffeine and carbs (Big Macs, fries and Coca Cola) and you will get a sluggish, overweight person susceptible to diabetes, heart disease and infections.
With bad food comes obesity, emotional instability, loss of concentration, poor cognition and poor health. All those things translate to poor work performance and family instability.
Drugs, Alcohol & Worse Health
With poverty comes increased consumption of cigarettes, alcohol, and recreational drugs. Add that to a Big Mac diet and you’re going to end up with a sluggish, obese, and generally unhealthy population that consumes extra medical resources and performs far less work.
More Crime
When you get a bunch of unhealthy people, broken families, unsupervised children, and drug and alcohol usage, you’re going to get more crime.
Without a structured life, a regular job, any belief in the possibility of a decent future, idle hands quickly become the devil’s workshop.
If you see no future for yourself you are more likely to take whatever chance for money that pops up. People who have nothing today and no hope of having anything tomorrow will often do desperate things.
Gangs, Drugs And Crime
And if unhealthy food, unhealthy people, broken families, and no jobs that pay enough to rise above the poverty line weren’t enough, there are always predators circling the weakest members of any herd.
Go to any neighborhood where there is high unemployment, broken families, unhealthy food, drugs and alcohol abuse and you will find criminals that prey on the residents. Children are their prime targets — boys looking for a father figure, girls looking for attention and protection.
Join the gang and it will protect you. Don’t join the gang and it will beat you. Deliver a package of drugs, watch for the police, steal a car, and you’ll get money that you cannot get any other way. Help the gang and get easy money. If don’t take the gang’s money you will be its next victim.
That’s a tough choice to turn down for a twelve-year-old with no father and a junk life.
Family Breakdowns Are Toxic To The Next Generation
With poverty comes the breakdown of families, absent fathers, neglected children, and unwanted and unplanned pregnancies, all of which lead to an even greater numbers of unsupervised, poorly raised, badly fed, unhealthy children and broken families.
Having Lots Of Poor People Is Bad For Everyone Including People Who Aren’t Poor
Too little money and no jobs that pay enough to get people above the poverty line are not only bad for the people directly involved, they’re bad for everybody else.
Crime affects me.
Higher taxes and a bigger government affect me.
The Lack of trained workers affects me.
Millions of angry, unhappy, drug-abusing people living near me affect me.
Poverty is societal gasoline next to an open fire.
I have to pay for the social services. I have to pay for the police. I have to pay for prisons. I have to pay higher insurance rates. I have to pay higher medical bills. I have to be the potential target of burglaries, stolen cars, stolen mail, identity theft, muggings, car-jackings, etc.
Almost 20% of Americans are now living below the poverty line. That affects me in major way and not a good one.
Seventy-five years of experimenting with welfare has proven that giving people free money is a terrible idea. It won’t help them. It won’t help you. It won’t help me.
It will just make things worse.
So, why is there so much opposition to paying full-time workers enough money so that they don’t qualify for welfare in the first place?
People Who Want Us To Live In A “Law Of The Jungle” Society
We have people who believe that winners win and losers lose, that poverty is a moral issue that separates the winners from the losers, the good people from the bad ones, the strong ones from the weak ones.
They think that if you’re poor it’s because you deserve to be poor. To them, poverty is a moral judgment.
Their position is: “No food stamps. No Medicaid. No Section 8 housing programs. You’re on your own.”
The Law of the Jungle people say, “Well, if their alternative is starvation that will make them work harder. Hell, if they want more they can work 16 hours a day, seven days a week. If they still can’t afford medical care, too bad.
“They should have been born into a family that could afford to feed, clothe, house and educate them until they’re 22 or so. They should have been born smarter and more industrious. But they weren’t. They’re stupid and weak and that’s not my problem.”
One person commented on one of my columns that poverty was a choice and that anyone who wanted a good education or job training could get it by joining the Army. I pointed out that over forty-million people live below the poverty line and that the U.S. Army only accepts 28,000 new recruits per year.
“They could still have a good life if they would only work harder,” he replied, “and if they weren’t willing to give up drugs, alcohol and having out-of-wedlock babies, well, then they deserved what they got.”
Essentially they deserved to be poor, he thought, so it’s their problem, not mine.
People who think this way think that over forty-million Americans living below the poverty line without sufficient food and access to medical care won’t have any effect on their lives.
In that, they are completely, totally, wrong.
Lots Of Poor People DO Affect The Rest Of Us
People will do whatever it takes to survive. Sure, cut off food stamps and Medicaid. See what happens next.
If you think we’ve got a crime problem now, just wait until you have 40 million people who don’t have enough to eat and wake up to find they also have no access to medical care and sufficient food for themselves and their children.
How many police are we going to have to hire? How jails are we going to have to build?
How much are those people going to hate everyone who says, “If you don’t like it then work harder. Get a second or third job, loser”?
How much are they going to hate the country that threw them in the trash with the smarmy comment, “You should have been born into a more successful family. You should have been born smarter and more talented. You should have been born with more drive and determination. But you’re just a weak loser and I’m a winner so, get lost and suck it.”
How do you think that’s going to work out for you and your family?
Do you want to drive a bulletproof car and live in a gated community and carry a gun and hope that there are enough cops and prisons to control all those people you’ve labeled as weak losers?
And what happens when they get out of a jail which is more like a vocational training school for criminals?
So, fine. Cut off Medicaid and food stamps and leave over 40 million people without the ability to feed their families or get medical care. Let then just have pneumonia, a broken leg, a hernia, a kidney stone, etc. Tell them to learn to live with the pain.
How do you think that’s going to work out for you? Do you think that 40 million Americans are just going to sit there and starve quietly?
The Perverse Pleasure In Paying People Less
There is this weird, perverse, toxic idea in this country that paying workers the least amount possible is a good thing. It’s almost as if people want to high-five an employer who finds a way to further reduce his employees’ wages.
“Yeah, Bob, you managed to get people to deliver those pizzas for only $8/hour instead of $9. And no sick leave or medical insurance either. What a terrific businessman you are! Good job!”
Taxpayers Are Subsidizing Low Wages
No, Bob, terrible job because now I’ve got to pay for your employees’ medical care, their housing and their food. It’s your business, Bob. They’re your employees. You should be paying them enough so that they can pay for their own medical care, housing and food instead of pushing your responsibilities on to me and my fellow taxpayers!
I shouldn’t have to pay extra taxes and support a bloated government so that “Bob” can make higher profits with cheap labor.
Paying Higher Wages Is Like Buying Fire Insurance
What’s the principle behind fire insurance? It spreads the risk.
You have a million people. This year a hundred of them see their houses burn down. Without insurance those hundred people lose everything and the 999,900 other people lose nothing.
But when the million people have fire insurance, they all spend a little for fire insurance and the hundred people get their houses replaced.
Essentially, a lot of people pay a little instead of a few people paying a lot.
Right now industries that are difficult to unionize pay full-time wages that are below the poverty level. These employees lose a lot and rely on taxpayer-funded programs to supplement their food, housing and medical care.
If their employers paid a full-time wage that was above the poverty line, the employer’s additional labor costs would be baked-into a slightly higher price for their products.
Like an insurance premium, each of their customers would pay a little more instead of a few employees losing a lot.
More importantly, the people who would be paying a little more would be volunteers, namely, the customers who choose to buy those Big Macs, Chinese-made Walmart t-shirts, and discount hotel rooms, instead of taxpayers who are all forced to pay higher taxes to cover Burger King’s and Walmart’s workers’ food and medical costs.
Low Wages Are Not A Moral Judgment Of A Market Economy
Stop thinking that low wages are a moral judgment of a market economy. Low wages are not the result of some law of nature.
Low wages are nothing more than a reflection of the low bargaining power of unskilled workers in decentralized industries.
If you want to understand how bargaining power controls price in a market economy, read my column:
The Law Of The Jungle People’s Plan B — Just Give Everybody Free Money
What’s the Law of The Jungle people’s backup plan?
“Well, if things get too bad, we’ll just give everybody free money. It’s called a Universal Basic Income.”
Their plan is to give everybody welfare? How has that worked out in the past?
Money without work is almost as bad as no money at all. It makes everything worse, just worse in a different way.
People perform work and people consume goods. Money is the medium of exchange that facilitates the transfer of work in one direction and goods in the other direction.
When you give people money without work, you unbalance the equation. You facilitate the transfer of goods to people without an counterbalancing rendition of labor.
Leaving aside the emotional damage that welfare does to recipients, the societal damage from creating a welfare class, the social damage from creating a large group of people who have no purpose and no useful activities to keep them out of trouble, money without work dilutes the efficiency of the economy by delivering goods without a counterbalancing rendition of economically useful services.
Instead of some scheme for giving people money for nothing, essentially old-fashioned socialism in a fancy new dress called “UBI”, we need to pay people an above-the-poverty-line wage to perform useful services.
The answer is to pay people enough for useful work so that they don’t qualify for welfare in the first place.
What If There Aren’t Enough Low-Skill Jobs?
There is no shortage of needed work. There is plenty of work that is worth doing.
Here’s an outline how we can employ people at a living wage to perform useful work:
Summary
Widespread poverty is bad for everyone including people who are not poor. It is toxic to the entire society.
Low wages are not the result of some law of nature called “supply and demand.” They are merely a reflection of a large imbalance in bargaining power, not the result of some natural law.
Low wages are bad for everybody except the employers who make higher profits by shifting their labor costs onto taxpayers.
Wages that are high enough to keep employees from qualifying for welfare shift the cost of welfare from taxpayers and the government to employers and the customers for those products that are made with unskilled labor, which is exactly where those costs should be.
A minimum wage that is a living wage is good for the middle class, it’s good for taxpayers, it’s good for the economy and it’s good for the health and political stability of the entire country.
Poverty for people who are willing to work is bad for everybody.
–David Grace (www.DavidGraceAuthor.com)
