When Corporate America Doesn’t Pay a Fair Wage, Guess Who Makes Up the Difference?

One of the things we have heard over and over again is that with just one more tax break, if we’ll just give a few more subsidies to corporations, the magical fountain of trickle-down economics will overflow and we’ll be awash in a warm sea of prosperity for all. The facts have proven otherwise. Corporate subsidies in 2012 cost the taxpayer almost $100 billion and it’s likely we’ll see that number go up for 2013.

But what about wages for those of us who actually work for a living? Would it surprise you to know that, for 2011, the average wage index (AWI) shows 47% of Americans made an average of $22,466.90? 47% of us made less than $25,000 in 2011, and a full 40% brought home less than $20,000 according to the Social Security Administration.

Now here’s the part that will either shock you or make you angry — or both. In 1968, the Federal minimum wage was $1.60. Adjusted for inflation, that’s $10.74 in 2013 dollars. If you don’t believe me, you can do the math yourself on the inflation calculator.

When you couple the fact that the current minimum wage is a full $3.49 less in actual value than the 1968 rate, it’s not a far stretch to link this with our increasing debt and the reliance of so many families on social welfare programs. Then take into consideration that we have corporations hiding their profits in offshore tax havens, getting lawmakers to add tax breaks for them buried deep inside spending bills, and it all starts to come together.

Corporate America is making record profits by paying workers less and passing off the responsibility of taking care of them to the taxpayer wherever and whenever they possibly can. Just look at what just one Wal-Mart store costs taxpayers in Wisconsin. Now multiply that by the over 4,000 Wal-Mart locations, plus the 600+ Sam’s Club warehouses and their distribution centers and you come up with a pretty steep bill that we are having to foot annually. All so that they can get away with paying ridiculously low wages and avoiding health benefit costs.

A lot of people like to say that “if you don’t like working a minimum wage job, then go find something else” as they shrug off any critical thinking in regards to the problem we’re facing. Granted, a 16 year old kid flipping burgers at Wendy’s probably doesn’t have 3 children to take care of like someone ten or twenty years older — but that’s not the point. Go back again to the AWI link I posted and look at how many people are below the annual income necessary to pay a net federal income tax. What this does is put a perpetual burden on the shrinking middle class, and it is a model that is unsustainable.

Corporations should be given the choice. Either they pay their workers enough that they aren’t a burden on taxpayers, or they can start paying more in taxes to cover the cost of Medicaid and food stamps. Otherwise, things are only going to keep getting worse.

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  • Gonzo

    Hmmmmm……that link the the study about how the WalMart in Wisconsin costs $900,000 had an interesting paradox in it. The bill proposed to raise the minimum wage to $10.10 in hopes of getting some people off public assistance is followed by a brief description of a woman who apparently works for WalMart and is reported to be making $11.70 an hour but receives public assistance, food stamps, Section 8 housing, and state-funded health care
    So, how will raising the minimum wage to $1.60 below what this woman is making get people off of public assistance if she’s still relying on it for her basic needs?

    • Justin

      Keep in mind that the woman in Wal Mart is not working full time hours. Likely, she is working less than 20 hours per week.

    • paco

      if they are paying that wage in Wisconsin maybe I better move there.they do not pay that in pa.gonzo you must be a walmart lover.

      • HH

        That depends on how LONG you have been working for wal-mart, not where you live. My sister has been working there for almost 10 years and her pay is about $12 an hour. You get an automatic raise every year (a whopping 40 cents an hour I believe). She is probably not working less than 20 hours a week Justin, but most definitely less than 34, because at 35 you are considered full time and at least at my sister’s walmart just about everyone works about 33 or 34 hours a week.

    • HH

      If she makes that much at walmart then she has probably been working there about 10 years or so. Making the minimum wage higher will push everyone else’s salaries up as well. Assuming she gets the 40 cent raise each year then after 10 years her pay would be $14.10 an hour. Even if one assumes she works full time (unlikely) she currently makes just over $24,000. If she has 2 children (and no other adult in the household bringing in income) that income would qualify her for food stamps. If she made $14.10 per hour at full time that’s an extra $5,000 per year. That’s a big difference.

  • Travis

    I believe you are on to something. But let’s really help everyone and raise the minimum wage even more. Let’s make it $50 an hour and then we’ll really get some help to the poor. What the heck let’s make it $100 an hour, than we can solve all the problems.

    • Ellen P Collingsworth

      You are stupid. Corporate PROFITS are at an all time high. This is because they are NOT PAYING THEIR LABOR BILLS! The midnight procurement division of the Mob found out how to make nothing but profits too. So did plantation owners. Didn’t make it right. Basic economics dictates that super low interest rates plus a giant banking fraud scandal equal INFLATION. If you had even a lick of reading comprehension ability you would have understood the part in the article where it said that by 1968 (a prosperous period) standards today’s minimum wage is a full 1/3 less than it should be. And as a consequence, ALL workers are underpaid. My husband is an engineer with 16 years at the same company. I have a 4 year degree from a good university in an engineering management field. Our one child is an adult and works as an administrative assistant and pays us rent and pays for his own needs. We should not be poor. We did all of the stuff people are supposed to do for success. We are white, in shape, educated, emotionally stable, physically able and come from upper middle class backgrounds. We have had no race or class barriers to overcome. Our educations are in fields in demand. But we are in fact poor. Not poor like a Wal Mart employee, my husband brings in 7 times their salary by himself. But we are poor. I haven’t had a new BMW in 8 years. My husband hasn’t had a new Land Rover in 13 years! And before you start crying for me, my point here is that 13 years ago and 8 years ago we went to the dealership and plopped down the money to buy these cars new. You would think with more experience, 3% annual raises plus several promotions we should be doing BETTER. We are not. We did not do any real estate transactions/financing between 2003 and 2010 either. We are simply suffering the fact that our money is not worth what it used to be worth. We can’t buy as much with it. We have lost our spending power. For those poor souls making minimum wage, it is not possible to live on that wage. The scale is off balance. That doesn’t mean we give everyone $100 an hour, it means we set minimum wage in accordance with the financial model that creates prosperity and that does not allow corporations to make record profits while pushing the US taxpayer to pick up the slack for their workers inability to afford basic necessities. There is a financial model which adjusts for inflation and sets minimum wage in accordance with spending power. Any person working 40 hours a week should not need to be on welfare. And people like my husband and me should not be sweating our finances. You need to get paid more too. And if you are a retiree you need your nest egg protected.

      • Mandy

        My God you are suffering, I feel so bad for you. Bitching that $200-$300K is not enough for you. Do you live in a mansion. I would love to see your spending. GFYS AH

      • March EI

        Actually, she has a point though. What i’ve noticed is that there is an extremely HUGE income gap between those at the level very top probable 1% and those at the top 5%. Even the top 5% are having trouble paying off bills and maintaining a relatively “middle class” life. So even with one family of four making 100-150K a year is apparently still not enough.

      • Reynard Vulpes

        And so now you understand the wages of greed. Unrestricted greed is a very dangerous beast to allow freedom to.

        It’s pathological. It leads to war. Often civil war.

        The oligarchy is walking a very dangerous path and they know it. If you follow the news you know it too, assuming you have moderately good critical thinking skills.

        Why has the government amassed such huge military style armaments? Why the huge stockpile of ammunition and weapons for supposedly civil police use?

        Don’t you see what is coming?

      • pourmecoffee

        Yo Mandy, did you really read Ellen’s post? or you’re just too slow to understand her point?

      • Travis

        $10.50 per hour is just a number some person pulled out of
        the hind side, yes it’s all made up. So $10.50 per hour is going to be so
        great, it only makes sense that $100 per hour would even be better. Of course
        no one will make a minimum wage of $100 per hour because minimum wages are not
        about helping the poor. It’s much more about politicians buying votes with
        other people’s money. It’s also about busy bodies feeling morally superior by
        advocating for programs that show they care, but do little for the people the
        programs are supposed to help.

      • Norman Hill

        Not pulled from hind side, hat, donkey or ass. As stated in the article: “In 1968, the Federal minimum wage was $1.60. Adjusted for inflation, that’s $10.74 in 2013 dollars.”

    • Reynard Vulpes

      Argumentum Absurdum. One of the poorest of fallacious debating tactics.

      About the same as saying that if a 65 mile an hour speed limit is good, then 130mph is even better.

      Now do you have a REAL argument or are you just self pleasuring over the keyboard?

  • joe

    lets be real, the problem is save money live better walmart its for the higher anarchy for them to get everything overseas where the cost is very low for items sell them at a high markup and save money for the corporate people to make more but the the ones that are working at store level to work partime without benefits and a low wage. welcome to corperate America where the welthy get more and the working stiffs get less. and less. its not just walmart its everywhere, they just lead the way and get away with it.

  • Matthew Reece

    Abolish the minimum wage, the income tax, and corporate subsidies.

  • jovan1984

    Abolish all sales taxes permanently. They are a massive burden on those who are forced to live paycheck to paycheck due to the corporate welfare.

  • DoctorButler

    Exactly. Increase the minimum wage to something livable, and the welfare-dependency will dramatically decrease. but the greedy chiefs don’t want that. they want bigger bucks, o matter the cost, then they make you pay for it. And on top of that they turn around and accuse welfare-recipients of being “lazy”.

    It’s disgusting. Republicans are disgusting.