Yeah, let's subsidize Walmart employees with tax payer money instead of letting the poor guys pay their employees themselves. It's not like they are billionaires or anything.
What should rather happen is the exact opposite! If you work for Walmart you shouldn't be able to receive any government assistance at all because you are already working and the point of working 8 hours a day is to be able to feed and cloth yourself and if you cannot do that with that job then that job is of no use to you or anyone and should therefore stop existing.
But if it turns out that the employer or whoever benefits from that job desperately needs it, they will have to pay the employees a livable wage.
What should definitely not happen is that the tax payer ends up subsidizing privately owned businesses without getting anything in return.
And if it doesn't sit well with anyone that people get money for nothing (which is the argument pushed for EITC) then let the government employ them to do something that is at least remotely useful to the taxpayer that is footing the bill. Even just sweeping leafs off porches is better use of money.
If you give workers higher wages using the minimum wage most of the extra money they get comes from the place they work raising prices. Places that pay minimum wage, like Walmart, disproportionately have customers that aren't very well off themselves. Giving money from a household that earns $40k per year to one that earns $20k per year does make the country more equal but we can do better.
The money that goes into the EITC comes from income taxes and the top 10% of household pay more than half of the US income tax.
If we want to give money to working Americans we have to pay for it somehow. We can either do that explicitly and in a progressive fashion or we can hide the price from voters and let the burden fall repressively.
>If you give workers higher wages using the minimum wage most of the extra money they get comes from the place they work raising prices.
Employers are bound by the market when they set their prices and don't get to choose their price at random on a whim.
>The money that goes into the EITC comes from income taxes and the top 10% of household pay more than half of the US income tax.
Yes but for the most part those are just the middle class. The plutocrats pay fuck all in taxes. I do not want an MD with a networth of $10M (sweat of his own brow) subsidizing a Walton (who inherited his fortune). I want the Walton to pay the actual cost of running his goddamn shop.
Also frankly, I think minimum wage is besides the point. What should come back are strong sector wide unions like the ones that still exist in Scandinavia. The unions will take care to setup their own sector wide minimum wage and will be far more flexible in responding to the market and also the cost of living than the government can ever be.
Why couldn't that happen today? Presumably Wal-Mart could lower their executive pay and undercut Target in the current wage environment, and yet they don't.
If you raise the minimum wage, it will raise the costs of all businesses in a market by the same amount, assuming that they all have the same cost structure (same basic wage and worker efficiency). Usually that causes prices to rise uniformly.
> Why couldn't that happen today? Presumably Wal-Mart could lower their executive pay and undercut Target in the current wage environment, and yet they don't.
You're really asking why executives don't cut their own pay?
> If you raise the minimum wage, it will raise the costs of all businesses in a market by the same amount, assuming that they all have the same cost structure (same basic wage and worker efficiency).
They don't all have the same cost structure, so it would be rather silly to assume that.
There are many companies that are not gigantic corporations with overpaid CEOs. If you only care about Walmart and Target, then yes, prices will rise uniformly. But employee-owned cooperatives, for example, will be completely unaffected. Places that already pay their employees a living wage would also be unaffected.
> But employee-owned cooperatives, for example, will be completely unaffected.
Cooperatives (this will depend on details of structure, etc.) are often still subject to minimum wage laws, and of those that are, paying workers minimum wage as the only guaranteed payment with dividends/profit sharing/etc. on top is, as I understand, a not uncommon arrangement. So a minimum wage increase does increase the labor cost to the corporation (and, since wages are taxed differently than capital income, it has a net effect on the worker/owners, as well.)
Now, obviously, the effect on a labor coop or its worker/owners will be different than the effect on a traditional corporation or its shareholders, but there will not necessarily be no effect on the former.
Okay, that's technically true, but that's a distraction. My point is that increasing minimum wage rewards businesses who already paid a living wage.
Ultimately I've seen zero evidence that raising the minimum wage has any negative effects on the economy. There are only hypotheses about how it could affect it negatively, but economies are too complicated for us to be making decisions based on hypotheses without evidence.
You fundamentally misunderstand what a market is and why they are good.
The labor market is filled with many different types of people with many different goals. Who are you to tell a teenager they can't work part-time after school because the company can't afford to pay them whatever amount you believe is the amount to be paid?
Regulations are what cause the gross mis-allocation of labor and resources, when you distort the free interaction of individuals to buy and sell their goods and services you end up with perverse structures where an adult willing takes a minimum wage job at walmart if they can also qualify for food stamps and other government assistance.
Writing a law to tell walmart to pay their employees more doesn't magically fix reality. Laws don't magically make the impossible possible, believing otherwise is adolescent fantasy.
>Who are you to tell a teenager they can't work part-time after school because the company can't afford to pay them whatever amount you believe is the amount to be paid?
I wasn't making an a pro-minimum wage argument but rather an anti-EITC argument. But anyway, for your information teenagers are exempt from the right to a minimum wage.
>Regulations are what cause the gross mis-allocation of labor and resources, when you distort the free interaction of individuals to buy and sell their goods and services you end up with perverse structures where an adult willing takes a minimum wage job at walmart if they can also qualify for food stamps and other government assistance.
The market is not only about money and Wall St. branded financial products. The market is also affected by power and influence. Regulations are just another part of the market. It's the free interaction of individuals who choose to unite together as one, in order to influence the market to their own benefit.
Because after all who the fuck are you to think that you can conduct whatever business activity you like in other people's neighbourhood. It's only at their own discretion that you are allowed to do that. You don't get to benefit from their property right laws, and their courts, and the infrastructure they built and paid for, and yet expect to do as you please without any interference what so ever, even when you are obviously being detrimental to the neighbourhood that is hosting you, and allowing your commercial activities. Individuals exist but they function at all as modern businessmen only because society also exists.
Teenagers have a minimum wage, it is just different (lower).
I actually don't understand your second point, but markets can't exist without the rule of law; markets require a notion of property rights, how can anyone think otherwise?
In a well governed society laws exist to facilitate the exchange of goods and services, how can exchange occur if people cannot trust the contract they engage in will be upheld? As difficult as it might be for you to imagine, laws and arbitration can exist without a government which centrally plans the minutiae of everyday life.
Again, your argument seems to be that by the snap of fingers and the degree of those with power, walmart can just magically raise wages. That's a childish belief.
Partially true, but ignores the fact the economy and one's rewards from it, is a game. Your success is largely based on your talent in playing, and some will inevitably do better than others. But, that game also has rules that bias those already advantaged.
Politicians are the public face of this, and people realize that those who make the laws can be bought by powerful interests - they know - but believe they can't do anyting about it.
There is some unfair hatred of rich and the elite - that does exist - but there is also a resentment that comes from the realization that the promise of the "American dream" and the level playing field is not exactly that.
That's not a concern to be waived away in the press by the world's richest men, but directly addressed which will be difficult, because you have to acknowledge the problem of the bias (not level field) while simultaneously trying to get rid of the victim mentality which also plays a factor with those who are losing.
Everybody complains that the poor don't pay taxes. If they raised the minimum wage, everybody else wouldn't be stuck paying the extra tax burden of the poor because they could pay it themselves.
If any thing, we need to raise minimum wage and lower the Earned Income Tax Credit. The EITC was created by businesses lobbying the government to low wage earners a tax break in exchange for not raising the minimum wage. It has been disastrous to tax revenues and wages. Millions of Americans get to hear how they are not carrying their tax burden as well and then are attacked by the Republicans for living on government handouts.
This is a false narrative. The poor pay plenty in taxes and fees.
Between sales tax, worker payroll, SS, medicare, and various mandated fees from health insurance to car insurance to additional transportation taxes and tolls, and a million other fees and restrictions, the poor stay poor in part because of perverse government requirements.
In essence, the EITC rewards work and provides an incentive for workers to improve their skills. Equally important, it does not distort market forces, thereby maximizing employment.
I wonder about this. In a perfect market system, it's impossible to pay below-subsistence wages, because you can't work if you've starved to death. I think Adam Smith pointed this out. So, any public support for wage earners distorts the market by driving wages downward.
It's arguable that the government should subsidize wage earners, so that wages can be lower. Low wage earners receive a lot of things that they don't pay for out of their own pockets, such as education, which I support. But it should not be offered as a protection of the free market.
True, and it raises an additional point, which is that an isolated consideration of economics generally overlooks the willingness of people to cooperate with the myriad of written and unwritten rules that govern civil society.
>In a perfect market system, it's impossible to pay below-subsistence wages, because you can't work if you've starved to death.
I urge you to think about the many people who are part of a household who can contribute materially with less-than-individual-subsistence wages.
A retiree supplementing their retirement savings with a part time job; the vast majority of teenage workers. Almost anyone working while in school.
There are plenty of people who do not depend on their wage for 100% of their livelihood, but whose outcomes you worsen by pricing them out of marginal work.
It's actually a matter near and dear to my heart, as a musician. The economics of live music are strongly affected by people for whom music is not a vital source of income, and as a result, gig pay can actually drive towards zero or even negative if your locale has a "pay to play" music scene.
>I wonder about this. In a perfect market system, it's impossible to pay below-subsistence wages, because you can't work if you've starved to death.
Exactly. It's no hard to see how those who praise it so much get to immediately benefit from it by being able to hire people for wages that are ridiculously low and forcing the taxpayer to foot the bill for the rest.
Any non-market action will distort market forces. What he means is that the EITC is a softer kind of distortion. Since the EITC is essentially a matching contribution to the employee's earnings, it still allows decisions about wages to be made at the margin, as opposed to a minimum wage which mandates a hard cutoff.
Republicans like Means Testing because they know many people won't fill out the paperwork to get benefits and Congressional Democrats like it too because they are almost all lawyers and paperwork is the center of their universe.
I don't like the idea of picking certain people as being "needier" than others because it is a moving target. For instance, you might say that families need it more because they are raising kids, but one of the most troubled segments of the population are poor young men; if these guys get on their feet they are going to be in a position to raise a family and do it right.
If you do a "helicopter drop" the money is created by the central bank out of thin air which is basically why it tends to increase aggregate demand. There's more money but prices don't adjust instantly so more stuff gets bought.
Raising the minimum wage does the opposite. Hiring workers becomes more expensive and 70% of that increase in prices is empirically passed on to consumers in the form of higher prices. So now the money to price ratio goes down and aggregate demand decreases. Your plan was tried in the Great Depression and it backfired spectacularly.
Yes but I don't think we have any reason to expect major changes in that. And if that were to change then I'd expect us to see minimum wage hikes to start causing unemployment.
Actually, yes. Like a helicopter drop, a minimum wage increase shifts money from those who would save it to those who have the greatest incentive to spend it quickly. As noted in the earlier comments, what I was missing was that a helicopter drop is done by printing money, rather than shifting it from others. An EITX is closer to a helicopter drop, and I'm starting to see part of why it's a better idea.
If my understanding of the term is correct, NPMaxwell's comparison to a helicopter drop is a poor one. However, not only is it an established term of art, but he/she provided a reference for background. The glibness of your response is entirely unwarranted.
I swear, most of this is PR. How about these mega rich people give their average worker a pay raise? Nope, even though that is within their power, they don't. But...instead they petition the public to do something not within their power. Come on. This is all PR. I wish all the mega rich would just DO something instead of these endless PR 'battles'.
In most companies currently offering minimum wage, raising wages to $15/hr without changing anything else would wreck the company immediately. They would likely have to do some combination of firing people who can't do $15/hr worth of work and raising prices and hope they still have a market after that. So no, it's not so easily "in their power". Further, a lot of companies aren't run by the "mega rich", but by regular people who are just trying to get by. These are not people you want to screw over.
>In most companies currently offering minimum wage, raising wages to $15/hr without changing anything else would wreck the company immediately.
In 2015 and with some data from IRS one could estimate the actual and not just speculative impact of raising the minimum wage. One could know exactly how many jobs will be lost and one does not need to speculate any more. Once one knows the exact impact it's easy to make the decision of exactly what the optimal minimum wage should be.
Also, you seem to be alluding to small enterprises paying minimum wage. I highly doubt that. Small shops can exist only if they are doing something that is highly specialized/technical as the big competitors devour the rest of the general market. As such their employees are highly skilled and don't get paid minimum wage.
Actually, it is. Not the utopia of minimum wage to 15hr.
Let's do some quick numbers. 50 weeks a year, 35 hours a week. Equals 1,750 hours per year.
Employers raise an employee pay by $1 an hour. Hmm. That's greater than most get from EITC. $3.5 an hour raise, and that's greater than ALL EITC recipients.
Also, managers and top managers don't need their lofty salaries. That could change.
Finally, I'd never propose an immediate change. There would be a lot of business structural change to rebuild the middle class. There are other ways to redistribute the money in a more fair way, than what is currently being done.
That would imply that it would be even better, from the perspective of "stimulating consumption", to just give suitcases of cash to random bums, who spend it even faster.
Incorrect, because the bum can only spend so much at one time, practically.
You don't want a handful of random bums (your phrasing) either slowly living off the suitcase for a couple of years or quickly burning through on high-ticket items--you want a whole lot of poor people who can buy 2 more things at the checkout this week.
It still implies that you should favor cash grants to random bums, since they spend faster than the working poor, who might have the audacity to wait til Friday to buy those shoes.
If you favor cash grants to the poor over middle class (on account of the former spending faster), you should similarly favor grants to bums over the working poor.
Alternatively, just recognize that there are more considerations, when forming optimal policy, than the rate of consumption.
Doucouliagos and Stanley published a great review in 2009 with the key figure being a scatterplot of study size vs elasticity (elasticity = change in # jobs / change in min wage) [1]. This looks like a funnel centered around the true value. The funnel is wide where N is small and narrow where N is large. Two conclusions from the figure:
1. The true elasticity is ~0 (maybe ever so slightly negative). Only small increases in minimum wage were studied, so this isn't an argument in favor of drastic raises, just an argument that small raises don't hurt under prevailing conditions.
2. The funnel should be symmetrical because random error does not favor higher vs lower elasticity. Instead, the funnel is bent, which is evidence of strong publication bias in favor of results of the form "increases in minimum wage decrease the number of jobs."
FWIW I don't think minimum wage increases are a great way out of this mess because I think reduced workweek and basic income / minimum income / EITC are all better options. Still, I think this figure is pretty convincing evidence that economists place too much faith in their neoclassical model.
That's a pretty misleading statistic there. US unemployment in that time period has tended to increase in spikes on the order of a few months then fall rapidly in most cases but slowly since the 2007 recession. So you'd expect that in any randomly selected state with an unemployment rate over 7% it'll have decreased after one year in 90+% of cases.
If you're willing to be creative you can come up with a statistic that seems to support nearly anything. There are plenty of decent arguments and studies you can use in support of a minimum wage rather than something like this.
It comes from academic material, typical neoclassic economics textbooks teach this so I assume its from The Wealth of Nations. By increasing the minimum wage it locks out a portion of employees from being employed where the marginal product of labour is less than the minimum wage.
Because of this there are actually tonnes of papers studying its effects:
That really depends on how much you raise the minimum wage by. Small increases have been shown to have pretty negligible effects on unemployment, especially in the short term.
There are rich people and there are
powerful people, and there is a lot of
overlap between the two.
Some of the rich people sometimes do
relatively a lot to help the poor people.
E.g., there are Bill and Melinda Gates,
and they also got Warren Buffett to
allocate nearly all of his fortune. And
little Melinda, sweetheart, got lots of
other rich people to sign up for her 50%
or so 'giving pledge'
Net, apparently Melinda has, via Bill,
Warren, and others, moved well over $100
billion into philanthropy. Andrew
Carnegie? Lots of libraries, especially
good for poor people. Andrew Mellon? The
US National Gallery of Art -- free for
everyone. Michael Bloomberg -- $1+
billion to The Johns Hopkins University,
especially to its medical school for
progress in medicine that helps lots of
people, including poor people. And we
could construct a much longer list.
From all I can tell, if the poor people
have a valid gripe, then it is with some
of the power of the powerful people and
not much with the money of the rich
people, and here is why:
Shockingly, in simple terms, for the most
direct purposes of the poor people, the
rich people don't have much money!
Sure, each of the 1000 richest people
could buy a new Ferrari for themselves,
but they definitely can't buy a new
Ferrari for each poor person -- even if
Ferrari could make that many cars.
Or let's consider 'wealth redistribution'
and do a little arithmetic:
Let's look a little at the wealthiest
people in the US; for some data, let's
look, say, at the 2014 Forbes 400 as at
Suppose we outright 'confiscate' and
'redistribute' all this wealth across all
US citizens. So, from Google search
"US population"
we see that the US population in 2014 was
318.9 million
people.
If we were just to confiscate the full
$3,220,000,000,000
and redistribute it among the
318.9 million
people, then from the 'redistribution'
each person would get
3,220,000,000,000 / ( 318.9 * 10**6 )
= 10,097.21
dollars, that is about 10 thousand
dollars.
So, that's what each person would get if
we were to do a 'full redistribution' of
the wealth of the 1000 wealthiest US
citizens.
So, right, $10,097.21 per person is not
enough for a yacht, a house, a new car, or
one year of college.
And that $10,097.21 would be a one-time
thing, not each year.
So, where is the real 'wealth' for
individuals in the US? Sure, just where
it long has been: In (1) Social Security
obligations, (2) the rest of the US
'social safety net', and (3) employee
pension funds.
So, if want US citizens, including the
poorest, to be much richer, which is a
terrific goal, then, rather than
confiscate the wealth of the 1000
wealthiest, find a ways for more of the
318.9 million
people to have good jobs. Just how to do
that is more complicated than the simple
arithmetic used here.
I believe your reasoning, while correct, misses the bigger point: most of that wealth is not in the form of huge stacks of dollar bills in a bank safe, but company stocks. The only way to give a check to every citizen is to dismantle all these companies, which would destroy millions of jobs and make everyone much poorer.
No, my point is that, yes, the poor
people are poor, way too poor, and
the rich people are rich,
but the reason that the poor people
are poor is not that the
rich people somehow have scarfed up
all the money the poor people should
have that, then, would put the
poor people in the middle class.
Again, the gripe of the poor people
that the rich people have the
money the poor people should have
is at most $10,000 once, and that
wouldn't put the poor people in the
middle class.
Or to get the poor people in the
middle class will take many, Many
times the amount of money the
rich people have, say, over a lifetime,
say, working 40 years at $100,000 a year,
$4 million, that is, 400 times the
$10,000. So, that the rich people
are too rich solves, for the poor people,
at most only 0.25% of the problem of the
poor people. So, what we need for the
other 99.75% is not from the rich people
but, in a word, the powerful people.
Every time I read stuff about the 1% and income inequality I always think about the same exact logic that you outlined here. Splitting up the wealth of the top 1% and giving it to everyone else doesn't even make much of a dramatic difference to them.
I agree there are stats that show CEO pay is at an all time high. Minimum wage adjusted for inflation is not as high as it once was either.
I also think we have to solve this problem by creating better and better jobs. Paying the high school kid who takes movie tickets in Seattle a $15 an hour minimum wage is not the long term solution. We need more well paying skilled jobs.
> Splitting up the wealth of the top 1% and giving it to everyone else doesn't even make much of a dramatic difference to them.
If it was remotely feasible to confiscate the wealth of the top 1% and redistribute it, there would be enough nominal value to double the net worth (or halve the net debt) of the remaining 99% of people. That seems like a pretty dramatic difference to me.
I agree there's a long list of reasons why we shouldn't attempt this, but top 1% don't actually have much to share around isn't one of them.
Or, take a 1% person and assume
they have $100 million and we
redistribute all of it.
Then we would be giving that to
the other 99 people, call it 100,
i.e., include the (formerly)
1% person.
Then each person would get
$1 million, once.
But
for the middle class, really
want a job at $100,000 a year
for 40 years, that is,
$4 million. So the $1 million
is only 25% of the way there.
For the poor people, we still
need to find the other 75%,
that is, $3 million.
It's quite common to hear the "look how much the rich give to charity" argument. In reality this is often just a means of avoiding taxes.
Charities only have to spend 5% of their interests each year, and that can go to salaries, expenses and such. Why do you think so much of Warren Buffett's "charitable donations" go to charities he created? They are tax shelters that are run by his kids. That is his way of avoiding estate taxes.
Your point is partially correct, but
Warren told Bill and Melinda that
their foundation will get essentially
all of Warren's fortune. Then
the foundation
will decide how to use it.
I doubt if Bill and Melinda
will just sit on Warren's fortune
and draw a salary for managing it.
Instead, likely Bill and Melinda
will allocate it as best they can.
Spending $100+ billion effectively
is actually not so easy, but I
do believe that Bill and Melinda
and their foundation will spend the
money as fast as they can find
good places to spend it.
I get what you are saying. I just don't trust a word Buffet writes or says. He claims he isn't leaving any of his money to his kids, but he set each up with a billion dollar charity organization.
I once read a very good article, wish I could find the link, that talks about Buffet and says that anytime Buffet says something you should wonder what's in it for him. That while he is claiming your best interest, his hand is reaching into your pocket to steal a dollar.
You seem to be asking if
Buffett is a really nice guy.
In some ways, maybe not.
My only point was that even if
confiscate his money and pass it
out among the poor people,
the poor people will still
be poor and not in the middle
class -- even Buffett and the
rest of the Forbes 400 don't have
money enough to bring all the
poor people into the middle class
just by confiscation and redistribution.
That's not the only possible point
to make about inequality, but
by itself it is correct.
Your analysis misses a fundamental point: workers add value to an organization. The basic argument I have is that they are not sharing adequately (i.e., sustainably) in the rewards for their labor. Rather than dividing up the finite resources of a few ultra-rich, lets try to estimate how the rich have fared in comparison to...basically everyone else.
I'm going to look at 2003-2013 for the somewhat arbitrary reasons that (a) full records are available for all years in question, and (b) a decade is a reasonable and convenient length of time. The effects we'll see are somewhat emphasized from the last 3-5 years, so the effects would be diminished if you looked at, say, the last 30 or 50 years, but the trends would still exist. (That is to say, this isn't a new problem.) I'm also going to use an inflation factor of 1.27 so the analysis can be done in constant calendar year 2013 dollars. (Numbers may not add or work out exactly because of significant figures and rounding error.)
- According to the world bank, US GDP grew 14.7% from 2003 to 2013 from $14.62T to $16.77T. [1]
- The total net worth of the Forbes 400 grew 89% from $1.21T to $2.29T. [2]
- Total payroll tax receipts (which is a good proxy for total wages paid by average folks, since they phase out at higher earning levels) grew 4.6% from $0.905T to $0.947T. [3]
- Meanwhile the total workforce grew 6.1% from 146.5M to 155.4M. [4]
Based on this data, it seems fair to conclude that nearly all of the growth -- i.e., the new value created in the US economy from 2003-2013 -- went to very rich people, and very little (in fact, a negative fraction when adjusted for the growth in the workforce) went to the people actually doing the work of creating that value. Now, there isn't anything inherently wrong about that...but it a) probably isn't sustainable, and b) has created a social burden because delaying the effects requires public assistance to take up the slack -- the number of food stamp recipients rose 214% between 2003-2013.
You are saying that all or even a little
more than all of the growth went
to the rich people. Okay.
But you also wrote:
> The basic argument I have is that they are not sharing adequately (i.e., sustainably) in the rewards for their labor.
Let's see: Suppose a company has 100,000
near minimum wage employees and the
CEO got $50 million last year. So,
for some arithmetic
50 * 10**6 / 100,000 = 500
So, distributing the CEO's salary among
all the low level workers would
give each worker only about $500
more a year, that is, about the
same as working one week. Wouldn't
even start to put the worker in
the middle class.
Might argue that if the CEO does
his/her job well, then the company
will grow, hire another 50,000,
currently nearly unemployed,
low wage workers and promote some of the
present 100,000 workers to management
positions where they start to get into
the middle class.
Net, to get the poor people into the
middle class will take more money
than the CEOs get, and one of the
best approaches is to have more and
better CEOs who create more and better
jobs. One example may be the
large company (?) that recently
announced that all its employees,
many at the low level,
can go to college for free.
Again, it appears that the key to
getting the poor people into the
middle class is not rich people
but powerful people, yes, maybe
powerful because they are rich;
but to be successful they need
to use their power, and smarts,
and not just their money --
because even the rich people
do not have even 1% of the needed money.
You're looking at the wrong pot of money. Dividing up executive wages among the lowest paid workers has never been considered a reasonable proposal for solving inadequate wages for workers; a more reasonable proposal involves including worker compensation in the distribution of profits from the business. While the CEO might "only" make 50 million, the organization would be expected to make much more.
Let's take Bed Bath & Beyond (BBBY) as an example because, conveniently, their CEO made ~$50M in 2013. [1] Their annual earnings report indicates that they had a net income of $1.04B that year, and their corporate profile suggests they have ~60,000 employees. [2][3] If they spent 100% of their current profits on employee salaries it would yield ~$17k/employee. (For reference, the full-time minimum wage salary in 2013 was $15,080. [4]) Even under much more reasonable conditions -- let's say that we allocate 1/4 of net income to worker salaries -- then each of their 60,000 workers would earn an additional $3800, which is just about equal to the max EITC for a family with one child in 2013. [5]
It's really not about CEOs getting paid huge amounts, it's that workers are neither represented nor included in sharing the prosperity of their labor -- and taxpayers are subsidizing the difference.
Right, because Soros, that paid less than 1000 Euro of tax last year and is due anywhere from 7 BILLION to 14 BILLION is obviously a valuable part of community and clearly deserving the tax break.
SARCASM.
What should rather happen is the exact opposite! If you work for Walmart you shouldn't be able to receive any government assistance at all because you are already working and the point of working 8 hours a day is to be able to feed and cloth yourself and if you cannot do that with that job then that job is of no use to you or anyone and should therefore stop existing.
But if it turns out that the employer or whoever benefits from that job desperately needs it, they will have to pay the employees a livable wage.
What should definitely not happen is that the tax payer ends up subsidizing privately owned businesses without getting anything in return.
And if it doesn't sit well with anyone that people get money for nothing (which is the argument pushed for EITC) then let the government employ them to do something that is at least remotely useful to the taxpayer that is footing the bill. Even just sweeping leafs off porches is better use of money.