I have also posted this at www.radioopensource.org

[teddywolf]

I was going to comment on the air but I was defeated by time constraints.

Without getting into the race aspect for a moment (which is important) I want to address the Government's current role in maintaining poverty.

The US Government has a monetary policy, set by Alan Greenspan at the current time, that encourages a %% (by current measure) unemployment rate, which is called by many 'full employment'. In other words, policy is to have 5% of the working-age population that is willing to work and looking for work out of work. This is called sound fiscal policy by many politicians.

At the same time that the Fed holds to a policy encouraging 5% unemployment, the stated goal of some politicians is to get rid of Welfare as we know it, or just plain get rid of it. Many politicians who applaud the 5% unemployed goal deride people who are unemployed as 'lazy' or 'unmotivated' or a variety of other epithets. So, to put it bluntly, these people support an ecomomic policy of keeping people out of work and blaming these people for not having jobs. As the primary job of a politician is supposed to be representing the interests of their constituents and respecting the people for whom they are supposed to work, this seems to me like these politicians are not working in the interests of their people.

I am not an economist, so I do not know if the 5% unemployment rate is the optimal one. I know many economists say it is and I am willing to concede the point for the sake of argument. If this is the case, since Government is deciding that these people should not be working, Government should do something to keep these people from malnutrition, homelessness, poverty and ignominious death.

For those who claim that Welfare is the font that creates a dependant underclass, perhaps they don't pay attention to how it does so, because I won't argue that it does. As a rule of thumb, to get off of Welfare you have to work. Under the current system, every dollar you earn means you receive a dollar less in Welfare benefits. Seems simple enough, yes? The problem is, all dollars are not created equal. A dollar earned working is subject to taxes - Social Security, Medicare, for most people Federal, in many places State, in some cases even Local. The Welfare dollar is provided without any of those taxes being deducted. So, someone trying to leave Welfare who is earning a low wage is very effectively monetarily penalized by working. Making people pay for the right to work hasn't been a good means of encouraging workers in the past and I doubt that this has changed in modern times.

This system, by the way, is also supported by most of the same people who believe in the 5% unemployment rate and less Welfare monies handed out.

These same people also oppose increases in the minimum wage, saying it's bad for companies. Maybe some companies haven't yet figured it out, but if you don't pay your workers well they can't afford to be your customers. More to the point, they'll leave as soon as they have the chance. Tell me what's worse for a company: paying a living wage and treating your employees well, or having fewer customers along with employees willing to leave the moment they get a better offer? Ask Costco and Trader Joe's. Ask Ben and Jerry's. Ask Malden Mills. Then go ask WalMart.

A sane economic policy, one that is paying attention to itself, would include measures to ease people off of Welfare instead of sharply cutting them off. It would provide assistance without the intense stigma and shame (and hoops) for needing help, allowing a little more dignity for these people and not stepping on their spines. It would encourage a living wage. It could even encourage a solid education, the one metric most everybody agrees is a solid measure of increasing earnings.

Instead we have a system that promotes corporate bottom lines at the expense of low-wage workers. Tell me again why a CEO needs another $10,000,000 a year but a burger flipper earning $6 an hour, struggling to make ends meet, shouldn't ask for a $1 an hour raise? I must have missed that in economics class.

Comments

[sophiaserpentia.livejournal.com]

Well, feudalism had one thing going for it: zero unemployment.

You've hit on one of the primary Marxian criticisms of capitalism. People who do not own capital have no real choice but to work wage labor. If anyone who wanted a job could find one easily, employers would have to pay what labor is actually worth. However, the more desperate people are for work, the more power employers have to set their own price. Therefore the "natural unemployment rate" is actually a tool that enables mass exploitation (http://en.wikipedia.org/wiki/Exploitation).

"5%" sounds low until you realize that means one in twenty. And the way Americans count the unemployment rate is arbitrarily designed to give a lower number than the actual figure. So the real figure is higher than 5%, probably much higher. I know from my own experience that when i was out of work i would have never been counted because i never applied for unemployment benefits.

Capitalism has a "natural unemployment rate" because it cannot exist otherwise. And as you say, the people who are the victims of this, the ones who struggle to find work, are blamed for their own fate as a way of drawing attention away from the slow-motion cannibalism of the privileged.

[dpolicar]

In general I sympathize with your sentiment here. That said, if you want to buttress this argument somewhat, it's worth making a comment about typical re-employment latency.

That is, if 5% of the working population is unemployed at any given moment, but it's always a different 5%, that's a very different kettle of fish. It might be a deliberately unemployed underclass... but it might just be an indication that people are willing and able to quit jobs and live on savings for a few weeks or months until they find a new job. If it's the latter, that's actually not a bad thing at all. So it's probably worth emphasizing that we're talking about the former.

[gingicat]

People who quit don't get unemployment insurance, and therefore are not counted.

[dpolicar]

Good point.

[johnpalmer.livejournal.com]

A message, from a channeler of the spirit of the current leadership of the Republican Party:

Ah, it's clear you don't understand how important this unemployment rate is.

See, the big problem in this country, the one thing that can destroy the economy, is WAGE INFLATION. That's when the supply of labor is low, and companies have to make a good offer to get a good worker. This is a terrible thing, and completely unlike any other part of the free market. For example, it's completely different from oil, where people have to pay a high price to get oil they want when there is sufficient demand for oil, and it's completely different from people trying to buy diamonds in a marketplace with an artificially reduced supply of them.

No, wage inflation is a terrible, terrible thing because... well, just *because*. And you should understand that. Because, if you don't, well, you're stupid! Yeah! That's it! You're *stupid* if you don't understand this! I mean, *EVERYONE* knows this, right? Alan Greenspan knows this, Ronald Reagan (God Bless his Saddam Hussein supporting soul!) knew this, all prominent Republicans and all stingy business owners know this, so how can you claim to know better than them!

By keeping unemployment at 5%, wage inflation is prevented! Of course, that's not as important now with globalization, allowing companies to take advantage of dirt-cheap labor in other countries, where there is no danger of wage inflation (where there is, in fact, precious little danger of wages, in many cases). But it's still important.

If the economy grows too fast, and people need workers, and thus, workers have to be valued, well, the whole world is in terrible danger! Just trust us... we're the Republican Party, and we would never tell a lie.

[teddywolf.livejournal.com]

Ohh, I've heard that line about one thousand and twenty seven times too many :-)

[mycroft.livejournal.com]

Mostly good points, though I'm in the choir, but there is one thing that stood out to me as not quite accurate. Although taxes are withheld on essentially all wages, people whose income is below a certain level (I forget exactly what it is, but it should be easy enough to look up) are entitled to get a refund of their entire withholding. So, if you're below that line, you're not quite penalized for working.

The fact that tax law is too complicated for most people to wrap their heads around is another problem.

[teddywolf.livejournal.com]

There are no refunds on Social Security and Medicaid taxes, just state and Federal. So, there is still a penalty, albeit not quite as severe of one.

In addition to the penalty, though, there are other increased costs. Transport to and from work, babysitting and occasional meals out are there too (the latter possibly just from lack of planning, but still).

[jerusha.livejournal.com]

And ones eligibility for health insurance through the state is jeopardized - and very few of the jobs that someone fresh-from-welfare can get have insurance. So if you or a dependent are sick, you end up even further in the hole if you get a job.

(on one side, welfare + medicaid. On the other, salary less transportation, work wardrobe, child care, taxes, and out of pocket healthcare. Staying on welfare may, unfortunately, be not only the better choice but the only choice.)