I should know better than to pay attention to the evening news on teevee. It just ticks me off. Not because I can’t handle the news, but because of the way that it’s slanted.
The other night I was watching the PBS Newshour’s feature on the 50th anniversary of LBJ’s “War on Poverty.” Among the talking heads that appeared to discuss it was Glenn Hubbard, economist for hire and notable shill for the financial services industry.
What really caught my attention the other night was this part of Hubbard’s discussion of what means the government ought to employ in order to mitigate poverty. The whole discussion is here.
JEFFREY BROWN: Let me bring you back in, Glenn Hubbard — striking that of course a lot of these same issues are now very much still on the table and back on the table, right, questions of economic inequality, and raising the minimum wage. There are the kinds of debates that we have on this program where you and Angela Blackwell might disagree on some of the policies, but you are still agreeing that something more needs to be done.
GLENN HUBBARD: These are huge issues. And something definitely needs to be done.
I guess I wouldn’t think the things like supporting higher minimum wages are the answer. I don’t think that provides employment. We do need to support skills for people coming in. And we need to support their incomes, things like the Earned Income Tax Credit. If we as a society want to provide better opportunities for work, we need to pay for it. Neither side of the aisle is in my view bold enough on this.
JEFFREY BROWN: But what — what — go ahead, Angela Blackwell.
ANGELA GLOVER BLACKWELL: Yes.
If we raise the minimum wage to $10, five million people will be bought out of poverty. People who work shouldn’t be poor.
JEFFREY BROWN: Mr. Hubbard?
GLENN HUBBARD: I agree with that, but why use the minimum wage to do that, as opposed to the Earned Income Credit?
This is something that — as a society, if we want this, we should pay for it, not in terms of job loss for others, or higher prices, or lower profits. This is something we ought to pay for.
Hubbard’s 1% agenda is on full display here.
Looking at his claims in bold above:
Raising the minimum wage if done with enough rigor, will solve the problem of the millions of working poor people. When people work, they should be paid enough to support themselves.
Supports like the earned income tax credit (for people who work but don’t get paid enough to support themselves or their family) or food stamps, housing allowances, heating assistance and medicaid have become welfare for corporations, subsidizing corporations who cut costs by paying workers too little to maintain themselves. These corporations dump those costs on us.
How much do they dump on us? Billions of dollars every year:
How you subsidize the minimum wage
According to a University of California Berkeley Labor Center and University of Illinois study out Tuesday, 52% of families of fast food workers receive assistance from a public program like Medicaid, food stamps, the Earned Income Tax Credit and Temporary Assistance for Needy Families. That’s compared to 25% of families in the workforce as a whole.
The report estimated that this public aid carries a $7 billion price tag for taxpayers each year. …
Public assistance isn’t just for those out of work, down on their luck, or in a short-term bind. It’s for those who are gainfully employed but earning such a low wage they can’t sustain themselves. Which is to say: The reason fast-food and other low-wage employers can get away with paying so little is because taxpayers subsidize the slack. The report estimates McDonald’s (ticker: MCD ) subsidy alone is worth $1.2 billion a year, which equates to more than a fifth of its 2012 profits.
If a corporation cannot afford to pay a living wage for a good or a service that it sells, we should not automatically subsidize it. If society has a need that is not being met by an enterprising corporation, it has other means of availing itself of products and services.
Raising the minimum wage meaningfully will also create jobs. As low wage worker pay rises, they will spend that money creating demand, which is the basis for the creation of jobs.
Recent research reveals that, despite skeptics’ claims, raising the minimum wage does not cause job loss.[6] In fact, throughout the nation, a minimum-wage increase under current labor market conditions would create jobs. Like unemployment insurance benefits or tax breaks for low- and middle-income workers, raising the minimum wage puts more money in the pockets of working families when they need it most, thereby augmenting their spending power. Economists generally recognize that low-wage workers are more likely than any other income group to spend any extra earnings immediately on previously unaffordable basic needs or services.
Increasing the federal minimum wage to $10.10 by July 1, 2015, would give an additional $51.5 billion over the phase-in period to directly and indirectly affected workers,[7] who would, in turn, spend those extra earnings. Indirectly affected workers-those earning close to, but still above, the proposed new minimum wage-would likely receive a boost in earnings due to the “spillover” effect (Shierholz 2009), giving them more to spend on necessities. [footnotes at link]
Hubbard’s proposal above amounts for a demand for welfare from the 1%; he wants us to subsidize their profits by paying part of their labor costs.
Just say no to the 1% when they start their poor-mouthing.
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