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Friday, October 28, 2016

Nov. 13 (Bloomberg) — It seems that welfare queens are back in the news these days. The old stereotype was an inner-city unwed mother — that’s dogwhistle-speak for black — having multiple babies to get ever bigger welfare checks (throw in a new Cadillac and the myth is complete). Regardless, welfare reform of the 1990s ended that narrative.

No, the new welfare queens are even bigger, richer and less deserving of taxpayer support. The two biggest welfare queens in America today are Walmart and McDonald’s.

This issue has become more known as we learn just how far some companies have gone in putting their employees on public assistance. According to one study, American fast-food workers receive more than $7 billion dollars in public assistance. As it turns out, McDonald’s has a “McResource” line that helps employees and their families enroll in various state and local assistance programs. It exploded into the public when a recording of the McResource line advocated that full-time employees sign up for food stamps and welfare.

Walmart, the nation’s largest private-sector employer, is also the biggest consumer of taxpayer supported aid. According to Florida congressman Alan Grayson, in many states, Walmart employees are the largest group of Medicaid recipients. They are also the single biggest group of food stamp recipients. Walmart’s “associates” are paid so little, according to Grayson, that they receive $1,000 on average in public assistance. These amount to massive taxpayer subsidies for private companies.

Why are profitable, dividend-paying firms receiving taxpayer subsidies? The short answer is, because they can. The longer answer is more complex and nuanced.

Both McDonald’s and Walmart are engaging in perfectly legal behavior. The system was set up long ago in ways that failed to imagine companies doing this. Yes, they are taking advantage of the taxpayer, but they are also operating within the law.

Which means it is time to change those outdated rules.

The simplest solution is to raise the minimum wage. If full-time employees are living below the poverty level — especially those with children — its no surprise that they are going to need public assistance. Raising the minimum wage over a period of time will eliminate much of this corporate welfare. The costs will be slightly higher prices at fast-food restaurants and low-end retailers.

The next proposal is more severe: Charge back the amount of public assistance any employee receives to the company he or she works for. It would be separate from tax filings, and simply be a direct penalty charged to the firm. I doubt there is much political will for this proposal, but I can see some people — especially on the left — supporting it.

The most radical idea is bit of pure fantasy: Guarantee every person in America a minimum salary. That is a proposal under discussion today in Switzerland. Its hard to even imagine such a concept gaining traction in the U.S. outside of the Great Depression era.

My politics are pretty middle-of-the-road, and I find myself offended by subsidizing profitable companies this way. As a taxpayer, there are much better things I would like to see my monies go towards. Some rule changes are needed to end this wasteful spending.

We should get corporate welfare queens off of the public teat. Regardless of your politics, it is an issue that politicians on both the left and the right can agree upon.

Photo: JKCarl via Wikimedia Commons

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Copyright 2013 The National Memo
  • Mortalc01l

    The combination of Corporate welfare and Corporate tax breaks, combined with the ability of the mega-rich to “shelter” themselves from taxes, is directly responsible for the declines and shortfall in tax revenues in the USA. In what alternate Universe is it OK for the middle class to shoulder the burden of taxes and the wealthy get to pay a Mitt Romneyesque 11% rate, or none at all!

    Google, Facebook, GE and countless other American corporations routinely avoid paying taxes on their billions, which they have stashed around the World in various schemes, shelters and downright fraudulent accounts, PURELY for the avoidance of paying taxes. If the average American citizen was up to this kind of shenanigans they would be in jail. If “Corporations are people, my friend” as Romney asserts, then why do corporations get to skate on their taxes and why are more of their CEO’s and CFO’s not being punished/

    Until we can stop giving billions of dollars to the most profitable businesses in the World (big oil) and stop subsidizing the employees of McDonald’s, Walmart etc, we are going to continue to have a portion of this country that resembles the Third World.

    We HAVE to make Corporations pay their fair share; they got the benefit of starting their businesses and growing them, courtesy of the USA and it’s people and Government. They got access to cheap money, Government bought infrastructure, the market of 300 million taxpayers that bought their products and made them a success, the LEAST they can do, is pay their damn taxes.

    And before some Troll jumps in with the usual Faux News talking points, our EFFECTIVE Corporate tax rate is among the lowest in the World; the actual, on paper tax rate for Corporations isn’t ever paid by any Corporation in the USA. A battalion of accountants and tax lawyers makes sure that never happens. Here’s an excerpt from Money Magazine explaining how it REALLY works.

    “Even when foreign, state and local taxes were taken into account, the companies paid only 12.6% of their worldwide income in taxes in 2010.”

    “The federal corporate tax rate stands at 35%, and jumps to 39.2% when state rates are taken into account. But thanks to things like tax credits, exemptions and offshore tax havens, the actual tax burden of American companies is much lower.

    In a report commissioned by Senators Carl Levin (D-Mich.) and Tom Coburn (R.-Okla.), the GAO looked at taxes paid by profitable U.S. corporations with at least $10 million in assets.”

    • LoneWolf93

      This can only happen by electing like minded individuals to congress and the WH. We need more Senators like Warren out of Mass.

    • ThomasBonsell

      More on corporate taxes.

      Following World War Ii, when the American economy was humming along and creating millions of new jobs, businesses paid 43 percent of the taxes to the federal government with individuals picking up the remaining 53 percent. That has been gradually shifted over the years with business taxes now account for less than 10 percent with individuals getting stuck for the remaining 90-plus percent

      The rational for constantly cutting business – especially corporate – taxes was that it was needed so businesses could invest to create new jobs. The jobs were never created – in fact they were reduced by corporations – and we never experienced the economic paradise always promised.

      But we keep hearing that taxes need to be cut even more so business can create more invisible jobs.

      • spam 90210

        Businesses are global now. There is no reason that they need to have their headquarters in high rent places in the US with high priced US workers. The low taxes is the only thing keeping these multinational corporations here. Why would you chase them away when the US doesn’t build much these days besides movies. And movies are even being driven other places to lower the costs.

        Most economies were pretty isolated with high tariffs, high transportation costs, and terrible communication. Cell phones, skype, and high speed internet changed everything. NAFTA and getting rid of trade barriers was the final straw and nothing will ever be the same as it used to be. We are now brothers with the poor in India, China, and Mexico and competing with them for unskilled labor jobs. Their wages are rising and ours will drop until an equilibrium wage is reached and there isn’t anything anyone can do to stop that.

        If you raise tax rates on stock sales, rich people will either sell before it begins and put it somewhere else, or they just won’t sell until the rates are better again.

        Ignorant people who haven’t seen REAL rich people’s tax returns don’t realize how much they pay in taxes. The top 10% pays a whopping 70% of all taxes paid. It you extend it to the top 25% of earners, then you are talking about 87% of all taxes paid. The middle class pays very little. Stop kidding yourself. The $10K that most middle class people pay each year, pays for nothing in the big picture.

        • ThomasBonsell

          Here’s something to mull over: Tie the CEO”s compensation to the number of employees a corporation employees with the CEO getting more as the number of employees increases and see how fast those jobs will come back to the United States

          And quit crying for those poor “overtaxed” aristocrats. My history begs to differ.

          When I decided to leave the newspaper business and live off my investments, I chucked it in about Labor Day. In those months of work I paid 33.26% of my income in income and payroll taxes. Multimillionaire Mitt Romney has admitted to paying 13.9%, and none of it in the payroll tax. In the last full year I woked, I paid 29.96% of income in both income taxes and payroll taxes. Mitt Romney has admitted to paying 13.9%. I never once screamed “Taxed Enough Already.” Quite whining for the poor overtaxed Romney.

          Here’s some more info on those poor overtaxed aristocrats from the Tax Policy Center. It shows the distribution of federal income taxes paid by income level in 2011.

          It contains a number of interesting factoids, including the following:

          7,000 people made more than $1 million but paid no income tax.

          22,000 people made between $500,000 and $1 million but paid no income tax.

          81,000 people made between $200,000 and $500,000 but paid no income tax.

          381,000 people made between $100,000 and $200,000 but paid no income tax.

          So that’s 491,000 Americans who made more than $100,000 a year who paid no income tax.

          Read more:

          And you don’t seem to understand that there is very little difference between the income taxes paid and the payroll taxes paid. The figures are almost indentiical. The top-income tax payers may pay 70% of income taxes but they pay almost nothing in the payroll tax; so that means they do not pay “a whopping 70% of ALL TAXES paid” as you claim. The payroll tax is paid almost entirely by the working middle class. The top 25% do not pay 87% of all taxes paid, they only pay that in the income taxes. They pay very little of the payroll tax

  • njudah

    Richard Nixon proposed a guaranteed income plan for all Americans in the 1970s. He also proposed health care reform that was superior to Obama’s. Go figure!

    • latebloomingrandma

      And I never heard anyone call him a socialist.

      • spam 90210

        I didn’t know 60 year old people knew how to turn on a computer. I’m surprised that your eyesight is good enough to see these little letters on the screen. Do you really expect today’s conservatives to want something because a so called conservative from way before they were born…… wanted something socialist?

  • tax payer

    Like the saying ( You are what you Eat ) same as ( You earn what you are Worth ). Would you pay a Hamburger Flipper $15.00 an hour and the same to a Stock Person? Anyone can flip a burger or stock items. Drive a Commercial Bus, 18- Wheeler and earn $25.00 an hour or more and now you are Worth every dollar that’s paid to you.

    • Jimmy Cahill

      Regardless of that point, no full time worker should live below the poverty line. This could raise wages across the board, but isn’t that supposed to be good for overall economy.

      Walmart took away the mom and pop shops. They paid better wages than Walmart does, or at least they did when I was growing up in Boston 10-15 yrs ago when mom & pop stores still existed. If they could afford to pay then Walmart can too.

      You say “should we pay a burger flipper more”? I have known working in fast food and retail to be a much tougher job than some that pay at least $10/hr. I work as a tutor on a college campus, and just picked up another part time gig as a content uploader, creating online classes for the new National Online program. I get paid twice as much for the uploading, however the tutoring is much more difficult.

      • tax payer

        I know many mom and pop stores, and they hire from within such as sons, daughters, nephews and that’s the way it has been done for decades. The father and mother work there all day, and sometimes work seven days a week. I sometimes buy my Lottery Tickets at many of those stores and the same people are there daily working. Sure, in the 60’s they hired and they paid less than the minimum wage ( $1.25 an hour ) to High School Students since my brother worked in one of those stores across from our house and the pay was too low, so he quit. McDonald has always paid a low wage and the wage goes up everytime it’s a Federal Law. Walmart pays more than the minimum wage since in Texas it’s $7.25 an hour.

        • Jimmy Cahill

          The city I grew up in, East Boston, MA was built on mom & pop shops. Still is, there are very few chain stores there, though there are more than when I grew up. It benefitted everybody in the city. There is not a Walmart within Boston city limits that I am aware of, and our economy is doing better than ever, and prices are actually lower in most cases. The mom and pop restaurants have better quality of food for relatively the same price, even cheaper in some cases.

          I remember a study a few years ago when I was taking a Macro class that basically said 30¢ of every $ you spend at Walmart goes directly into CEO’s pocket. I still say we link CEO salaries directly to employee wages. That would solve a lot of this.

          • spam 90210

            Shareholders would disagree with you and it is their money. If they think it was best spent to pay the CEO nothing and the employees more, that is how it would work.

          • Jimmy Cahill

            When you figure that MAJORITY SHAREHOLDERS, the ones whose opinions actually matter, are mostly the rich elite, then of course it would be that way.

            Adam Smith, in the Wealth of Nations, where we get a large chunk of our economic ideology, talks about the invisible hand of the free market, the unseen force that controls and dictates the ebbs and flows of the market.

            At another point, he hints that a free market cannot work unless everybody has equal input. In our situation that does not exist, nor has it ever existed. He basically says that when people have too much input into the market, too much market power, the market does not respond the way it should and instead flows toward the interests of the people with the most influence. This makes the market very easy to manipulate, and this is exactly what is wrong with your statement.

            The majority shareholders at Walmart are all wealthy, very wealthy, and were probably that way before they were with Walmart. They keep things to work in their best interests even though it does not benefit anybody but them and their buddies, CEO included.

          • nirodha

            There are no Walmarts within the city limits of Boston because Tommy Menino would not grant the necessary permits. He understands how Walmarts undermines the local economy and totally screws over their employees.

    • Allan Richardson

      People do not earn what they are worth, necessarily. They earn what OTHER PEOPLE WITH POWER say they are worth. Your idea makes some sense in a time of labor SHORTAGE, but when the higher paying jobs are NOT THERE, or are there only for those who can afford to spend several years on a NEGATIVE income (i.e. not working, in order to allow time for studies, while paying out for tuition), and even then they do not pay ENOUGH TO MAKE UP THE DIFFERENCE, then the only people who can get ahead are those who are BORN into the advantages of the “lucky sperm” club.

      • tax payer

        Will a Doctor, Attorney, Teacher, Judge and so on work for minimum wage? No, they are getting paid what they feel they are worth since it took them many years to get their Degrees. Those working at a minimum wage earn what the company feels they are worth since not too many Companies want to pay more for a job ( many ) can do without too much experience. I always told my children ( go to College, so you can earn a good living ) because one day Government Benefits may come to an end. They did what I asked of them and now earn a good wage, so young teens have to think of their future, and not expect others to be there for them because sometimes it’s not going to happen.

  • Jimmy Cahill

    I have an idea. Somehow tie CEO salaries to employee wages. If employees can only make a certain amount, it would cap the amount a CEO can make. I bet they would raise employee salaries in a flash if that was the case.

    • Allan Richardson

      Not just salaries but ALL CEO income: stock “options” that subsidize the purchase price of a stock to allow senior executives to buy and low and sell high the same day, whatever day they choose, come out of the corporate treasury and are really wages disguised as “capital gains.” When the stock is selling for $75 and the executive exercises an option to buy it at $25 then turn around and sell at $75, the company itself is paying the extra $50 to buy the share on the market (OR the company bought its own stock when it was going for $25, and is giving up the $50 profit for itself to honor the stock option).

      Although it sounds like a “merit” bonus, stock options, particularly when a company expands outside of family or “founder” ownership, create a short term philosophy in the executive suite. There are lots of ways to get a company’s stock price temporarily up to a high value, at the cost of the fundamentals of preserving its means of production (e.g. by selling physical plant land and machinery that would have to be repurchased, at a higher price, in order to take advantage of future growth, or laying off employees with valuable knowledge and a sense of company loyalty, to be replaced later with less skilled and less loyal employees). Then the executive, who is only a “temporary hire” in reality, cashes in and bails, using the temporary profit and stock surge on his resume to get hired for more at another company, and leaving his former company worse off. So, basically, company “management” in this country has abandoned the concept of building a long term institution in favor of taking advantage of the existing institution’s ups and downs in profit.

      We need executives like Henry Ford (but without the anti-Semitism) again!

      • ThomasBonsell

        Sorry, Allen, but that isn’t how it is done in corporate offices. In the book (mentioned above) I use the Enron scandal to show how it is really done.

        Directors give stock options – as you point out – allowing executives to buy at low prices. But they don’t sell – as you say – because that would create taxable income. At Enron, they exercised their options at a low price, after fraudulently stated income and profits caused the stock price to soar. They then borrowed money from the company based on the price of the stock (say they bought for $10 when the price was $50) and gave the stock to the company as collateral. They never intended to redeem the stock, even when it reached a higher price because they knew it was worthless. So they walked away with a $40 tax-free profit on each share from the transaction, which could be accomplished in minutes. If they bought 1 million shares, they got a $40 million tax-free profit.

        At his death, Ken Lay was the defendant in two lawsuits demanding that he pay back two such loans than had netted him more than $150 million tax free.

        This was all possible because in Enron’s last five years of existence, the company paid taxes just one, and that was just a pittance. This scam could be taking place in corporations all over the nation, and it’s made possible because they operate mostly tax free. If they paid taxes at the rate they are supposed to, this scam would be much harder to pull off. But Congress does nothing about it.

        • stcroixcarp

          I think Ken Lay’s death was faked. It happened on a holiday and he was cremated within 24 hours. I think those were pig ashes and Ken is living high on the hog in some tropical island retreat. Did his heirs have to pay any estate taxes on the money he stole?

        • spam 90210

          he was getting the same clean energy or green energy credits that GE gets and why they don’t pay any taxes. Conservatives are all in favor of closing ALL tax breaks.

          • ThomasBonsell

            Well, the House of Representatives is controlled by those very same conservatives, and I have yet to see any of them propose closing any tax breaks that benefits corporations. And the House is where such legislation is supposed to originate, so why haven’t we seen any tax breaks for corporations go away?

    • ThomasBonsell

      I made this very proposal in the book “Saving America: Using Democratic Capitalism to Rescue the Nation from Economic Folly.”

      Included were detailed concepts that showed how it would be done and the very benefits we would get from the action.

      An idea not in the book is to outlaw paying board of directors members with ordinary corporate income. Make their pay come only from stock dividends. That would do two thins; force them to have an ownership stake in the company they supposedly direct and force money stashed overseas to come back to the United States.

      • Germansmith

        In the age of electronic voting
        Why not give the stock holders (owners) of a company the power to decide what salary is the CEO worth? let us vote on a proposal/s
        I am very uncomfortable in having government decide what can a company can pay a talented employee or CEO

        • spam 90210

          obviously you have never been a stockholder or been to a stockholder’s meeting where they elect people. If stockholders elect idiots then it is their own fault.

          • ThomasBonsell

            It’s too bad Gemansmith was not a stockholder in Enron. He/she would then see how the stockholders were hosed as bad as were the employees. Ken Lay and his band of thieves stole the company into bankruptcy. Then its still viable Portland General Electric utility was sold to Warren Buffett trying to get some money to pay Enron creditors.

            Those of us who were PGE stockholders before Enron took over the company with bad paper had the utility sold out from under us and got nothing in return.

            I do get tired of hearing people claim that shareholders always profit from actions of company executives. Shareholders often get shafted and have no recourse. Congress does nothing to stop the type of grand theft perpetrated by Enron, all made possible because Enron paid no taxes. That made it possible to claim phony “profits” that caused the stock price to rise, and that benefitted only company executives who bought stock cheap with their options, then borrowed enormous amounts of money from the company and used the phony stock as collateral.

          • Germansmith

            You are aware that not every stockholder do actually have the time or resources to go to every stockholder meeting?
            Most stockholder sign a proxy sometimes for somebody they do not know to do the voting for them.
            I have never been to a meeting as a voting member, just as director and presenter.

        • ThomasBonsell

          I proposed a better idea. Tie the CEO’s income to the number of Americans his company employes. As the number of employees increases, the CEIO’s compensation increases. You should see a flood of jobs coming back to the United States from overseas. Greed rules all.

          Then let the employees and/or stockholders decide what kind of bonuses executives receive. They would probably put an end to the “golden parachutes” CEOs give themselves (through their lackeys on the Board of Directors) after failing in their jobs.

          • Germansmith

            That is a very left twist to it and it incentivize CEO to create more jobs , which may not be, at that time to the benefit of the company and its owners

            The primary objective of a business is to legally and ethically make money for their owners, not to create employment or to set social policy (I have created businesses to create jobs for disable people, but that was my choice and not because Gov. told me to)

            Employees are valuable and to be respected, but are not owners. They do not get to decide salary and bonus paid from somebody’s else equity.
            If you give more power to the millions of stockholders of large corporations (people like you and me) we will see a lot of abuses of the large salaries, outsourcing and rape of the environment curtailed without the need for Big Brother ever growing encroachment in the private and business life of the citizen.

          • ThomasBonsell

            My ideas are a lot more detailed than what could be presented here. Also is the idea that everyone receive a certain amount of money tax free; unlike the present when the first dollar earned is taxed by the payroll tax with no write offs or deductions. The tax-free amount is capped an all other salary subjected to taxation will come from profit sharing by all at the company with the amount of “shares” pegged to the importance of employment just as wages are now determined.

            If the CEO wants a higher income, he can earn it in two ways. Make more money for the company and hire more employees to increase the number of his profit shares. That CEO will have to strike a balance; increases employment so he can “earn” more but not to over hire to the point his profit sharing will diminish. Unions, if there are any, will not engage in “featherbedding” because it would diminish the income of its members. The result will be a perfect balance. And balance is what that “render unto Caesar” thing is all about.

            About you post below, answering to Spam90210:
            do you not know that a corporate election is closer to a Soviet Union election than it is to an American election? I spent several years as an intelligence analyst for Uncle Sam and studied Soviet government and Marxist philosophy in graduate school to facilitate my employment and leaned that corporate governance in a capitalist society is closer to governance in a communist nation than it is to governance in a democratic nation.

      • spam 90210

        It would make competent experienced business leaders not want to be on the board is the only thing it would do.

        • ThomasBonsell

          That would be good. Because Board of Directors are usually comprised of the top executives of other corporations and they all work their corporations into a cabal of thieves that prey on normal Americans. Let’s get some labor leaders, educators, lawyers, professors and working men and woman on those boards. Some honesty might erupt.

  • ChrisArc

    Nobody that buys the “cheaper” products considers what the extra taxes and the growing national debt adds to the cost of the products. They just think about their little world and trying to save penny or two at the store and not how many people have been mistreated or tortured in sweatshops so the can save those pennies.

    Wal-Mart and McDonalds both are not the cheapest anymore, like they use to be.

    If Wal-Mart was still the cheapest would they need to do price matching?

    • spam 90210

      What store is cheaper than Walmart then?

      What other store will match Walmart’s prices? No one.

      Price matching is only done when a competitor tries to reduce one item to get people in the door, but that idea is dead on arrival if Walmart price matches.

      • Germansmith

        Price matching is a “marketing ruse” and have less cost to the seller than coupons. Other companies have used the “price matching” con before Walmart, it is nothing new.
        I am not going to Walmart anyway to buy any of their crap.

  • howa4x

    In this country it’s always been socialism for the rich and capitalism for the rest of us. The combination of corporate tax breaks that go so far as to eliminate taxes for companies like GE. We subsidize ADM to make ethanol and it’s one of the largest agro business in this country and the tax breaks we give to the oil companies are outrageous considering they are some of the richest companies in this country. It is one thing to seed an industry to make it competitive like we did with Big oil when we allowed Depletion allowance, in 1910. But does that mean we should give them a tax break now because one day we/they will run out of oil, like maybe in the year 3030. Wal mart is one of the worst corporations in this country mainly because the benefactors of Sam Walton are collectively worth 115 billion dollars which Is more than the entire worth of some states. One study found that it costs the state $900,000 per year for every Wal mart store that opens in the amount of subsidies their employees qualify for in food stamps, and housing assistance. What is more troubling is that Costco another large retailer with a social conscience, pays $ well above the $7.80/hr a Wal mart employee gets, and none of their employees are on public assistance. McDonalds in no better and they practice the same social criminality that Wal mart does. This is all part of the work for less strategy that the Koch’s are trying to push on Red states. Wisconsin, Michigan and NC have passed these laws to break the back of unions. What they are actually doing is building in a subsistence economy where the people making those wages will not be a contributor to the larger consumer economy, and will economically depress those states in the long run..
    So we in the middle class are paying for both the tax breaks for the wealthy and the assistance of the people affected by them. Wow aren’t we the smart ones!

    • Allan Richardson

      If oil companies are allowed to depreciate the value of the oil in the ground, and mining companies are allowed to depreciate the value of the minerals not yet mined, on the grounds that this asset is growing less valuable over time, then what is wrong with allowing WORKERS to depreciate the value of their remaining ABILITY TO WORK as they age? The tax savings could go into their personal retirement savings.

      • howa4x

        As usual I agree with you

  • Lovefacts

    If the Republicans were serious about lowering the Debt & Deficit, then they would want the minimum wage to be from $10/hour to $15/hour. If those flipping burgers or stocking shelves made a living wage, they would not be receiving: Medicaid, food stamps, aid to dependent children, rent assistance, and so on. That alone would help lower the deficit & debt. However, these corporations care about one thing, their bottom line. And they don’t care if their employees make a living wage, and why should they? They can have the government make up the difference through the safety net, while these corporations fund politicians who support their agenda while dismantling the minimal safety net that exists, all in the name of lowering government expenditures along with their taxes–both individual and corporate.

    • spam 90210

      Republicans want everyone to make $35 a hour. But wages are set by supply and demand forces, not what you want them to be. Or we would just set everyone’s salary at $250,000 a year and we would all be happy. Here are the options according to supply and demand:

      700 workers making $7/hr or

      450 workers making $10/hr

      250 workers who would have been employed now making $0/hr

      I’m not sure this reduces the welfare rolls. I’m pretty sure it adds to them.

      Instead of forcing prices on employers, we should be better educating people who make minimum wage as to what they can afford. First of all, they can’t afford to have kids. Instead of rewarding them with more money the more babies they have, we should take their kids away and put them in foster homes if they can’t afford them. Then they would have no excuses as to why they didn’t have time for a 2nd job or to get trained for a better paying job. Second, they should be encouraged to stay at home with their parents for free rent until they became responsible enough to know how to become a manager within a couple years or move on to another company that paid better.

      Liberals fail at economics and always forget that raising minimum wage always hurts the people it was intended to help. The reason for the low wages in Walmart, grocery stores, and McDonalds is because those place make very little per item sold. Higher profit areas like health care have higher pay.

  • mandinka

    HUH?? What mental gymnastics the author goes thru to support barak and trash small business. Walmart and McD have had to cut their employees hours thanks to Obamacare but the author seems to forget that part

    • spam 90210

      And McDonalds is the dumbest example ever because the CEO of McDonalds doesn’t own the McDonalds stores. He just sells products to the stores and the individual store owners have to work their butts off just to make a profit at all. A McDonald’s owner will usually make $40k (for smaller stores) to $150K for busier stores. Let’s average the 2 and say $95K. The store manager makes about $60-80k per year and almost all of them work their way up from the minimum wage spots. The owner has to fork over around $90k in fees just to have the right to own the store, has to invest about $1 mil into the store. Just to make $95k per year. How much more can you cut into that $95K before he decides it isn’t worth it? Min wage earners make about $15k per year. If you raise that by 50% then that is about $7 more per person and there are around 50 employees per store. You can raise prices, but then you are going to lose customers. You don’t go to McDonalds for the gourmet food, you go for the cheap prices. The dollar menu is already going away. Who is going to pay $4 for a Big Mac? Not enough to keep the store profitable. Because they make nothing on burgers as it is. Most of the profits are on drinks that go with the burgers.

      So what will happen is that McDonalds stores will close up left and right and those owners/investors will put their money in real estate or something where they can earn a better return. Investing in real estate doesn’t help minimum wage people at all.

  • Germansmith

    I just love how everybody here is talking about complicated solutions to a simple problem (I guess why do it simply when we can come up with lots of laws and regulations with unintended consequences like ACA)
    The cost of labor is as simple as Supply and Demand. An employer can pay as little as they want as long as somebody is willing and able to perform the job adequately.
    Mob controlled unions are not the answer. Increasing minimum wage may work for a while, but you need to remember the key customers to fast food outlets like Wallmart and Mc Donald are the poor people, so any increases in prices will affect them mostly.
    If getting people off Medicaid is important, why did Obama agreed to postpone the large employer obligation to offer adequate health insurance?
    You want to raise wages, you need to spur the economy into growth. The more opportunities willing workers have to get a better job, the more the employer will have to pay to get a good worker….even the Chinese understand that.
    Many ways we can accomplish this , but one way it will not work is by adding taxes and costs for any additional employee you hire.

    • centerroad

      “Spur the economy into growth”

      Brilliant! Why hasn’t anyone thought of that?

      Well, until they do I suggest min wage laws, support union organizing, and corporate tax levies.