Editorial: Who pays for low wages? Taxpayers

Last modified: 4/19/2015 12:11:59 AM
Hillary Clinton wants to be a “champion” of the middle class. At least one potential rival for the Oval Office, Chris Christie, wants to make everyone, middle class or not, work longer before collecting Social Security. And every presidential candidate this year has to pay at least lip service to America’s yawning income gap and the shrinking middle class.

What has a generation of flat or falling working class wages wrought?

About one-quarter of the nation’s adjunct faculty members are receiving some sort of public assistance, according to a study released last week by the University of California Berkeley Center for Labor Research and Education.

The same study, based largely on U.S. Census Bureau statistics, found that 73 percent of the people enrolled in at least one of four public assistance programs – food stamps, the earned income tax credit, Medicaid and children’s health, and aid to needy families – lived in a household with at least one working member. More than half of all fast-food workers – 52 percent – are on public assistance, as are 48 percent of home care workers and 46 percent of child care workers.

In New Hampshire, 65 percent of the $160 million in federal money spent on public assistance programs went to working families.

Inflation-adjusted hourly wages for American workers in 2013 were only 5 percent higher than they were in 1979, and flat or negative for the past decade for workers in the bottom 70 percent of the pay scale.

Public assistance fills the gap between what low-wage workers earn and what they and their families need – not to thrive but survive. Assistance to working families costs the federal government more than $127 billion per year and states another $25 billion. Much of that sum should be seen as a transfer of costs from corporations and their stockholders to taxpayers.

Blame what you will – changing labor needs, the demise of unions, a poorly educated workforce or the federal failure to raise minimum wage – but millions work yet can’t get by without government help.

New Hampshire lawmakers rejected an increase in the minimum wage again this year. Entitlement reform, meaning less spending on programs such as food stamps, Medicare and Medicaid, which requires a state match, and Social Security, is a mantra chanted by Republican presidential contenders. But low wages mean higher state taxes as well.

New Hampshire, in 2013, had 94,000 residents on Medicaid or CHIP, 60,000 receiving the earned income tax credit and 27,000 on the supplemental nutrition program.

Some companies were founded on the premise, or became believers along the way, that paying employees well is good social policy and good business. Think Costco, Market Basket, Trader Joe’s, and Ben and Jerry’s. Large national chains, a recent Connecticut study found, pay employees the least – in Connecticut one-third less than small and mid-sized retailers.

Wal-Mart, notorious for low wages and irregular employee hours, and McDonald’s, the target of picketing by fast-food workers, recently announced they were raising pay, but not by enough to eliminate the need for public assistance for many of their employees.

Decisions about social programs and livable wages determine what kind of society a state or nation has, each to his or her own or, as it says on the Great Seal of the United States, E pluribus unum, one out of many. Economically, and socially too, we’re all better off when everyone is at least able to meet their needs if they have a job.

The competition for retail, home care and fast-food jobs isn’t global. Raising the minimum wage won’t bankrupt companies, but it would help take taxpayers off the hook.




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