With all of the recent talk of increasing the minimum wage, the mega wealthy, the tea party, and the Pope’s comments on trickle down economics. Lets look at some facts.
Lets start with trickle down economics. The economic idea of trickle down economics got its start under President Reagan. Some people still refer to it as Reaganomics. It is the belief that giving tax breaks to the wealthy will cause them to have more money and thus create more jobs and stimulate the economy. The problem is that this doesn’t account for the ever expanding greed of the mega wealthy. The Pope (Pope Francis) said it best when he said “The promise was that when the glass was full it would overflow, benefitting the poor. But what happens instead is that when the glass is full, it magically gets bigger, nothing ever comes out for the poor.” Anyone that knows me, knows that I am in fact an Atheist and feel that religion is full of it, however, I do have to give the new Pope quite a bit of credit. He is trying very hard to put the church back in line with the teachings of Christ, a man (who assuming he existed) had a very good handle on how people should be treated, with love, kindness, and forgiveness. At any rate, the Pope is correct in his assertion that trickle down economics does not work. Save for when Presidents Kennedy and Clinton were in office, the US has been following the idea of trickle down economics, and the end result is that it hasn’t worked. The rich have gotten much richer and the poor have only gotten poorer.
Right now, the poverty line (the minimum wage at which you can survive working 40 hours a week) in the US is $8.11 an hour for a single person. This amount decreases slightly if you are married and have a spouse working 40 hours a week as well. However if you are single with a school age child that wage shoots up to $10.68 an hour (infants and toddlers increase the cost much more).
Now consider that the minimum wage in the US is $7.25 an hour and factor in that none of these numbers include things like health insurance, a vehicle payment, car insurance, prescriptions, going to the doctor or *shudder* doing anything fun such as seeing a movie. A single person working 40 hours a week at minimum wage will make $1250 before taxes in a month, or a net income of $958 a month. Which until you make $7.35 an hour is enough to qualify you for food stamps (around $80). Now find a place to live, food, electric, car, gas, car insurance, and phone service for that. Now, imagine you are a single parent on that income, trying to take care of only one child. There are a lot of good people who are in that exact position. These numbers also assume that you are at work exactly 40 hours a week. If you get sick, you lose hours and thus money. Get overtime? 4 hours of overtime in a month and you will get kicked from food stamps.
Now, lets look at the other side of the fence. The richest 1% of the country owns more than a third of the country’s assets and the poorer 50% owns less than 2.5%. Lets take a look at the Walton family. These are the people who own Walmart.
From the 2013 Forbes list of Richest Americans: (including their relation to the founder Sam Walton)
- No. 6: Christy Walton (daughter-in-law), $35.4 billion
- No. 7: Jim Walton (son), $33.8 billion
- No. 8: Alice Walton (daughter), $33.5 billion
- No. 9: S. Robson Walton (son), $33.3 billion
- No. 95: Ann Walton Kroenke (niece), $4.7 billion
- No. 110: Nancy Walton Laurie (niece), $4 billion
To add that up for you, those six people are worth a total of around $144.7 billion, or as much as the bottom 42 percent of Americans (58,800,000 people) combined. First of all, its a bit absurd that 6 people have the same amount of money as 58 million people combined. Secondly these people want for nothing and at first glance, they look like the model of trickle down economics, they are very wealthy, and are job creators… right? Yes, Walmart is one of the largest employers in the world. But, that doesn’t mean much. While Walmart is posting record profits (more than $16 Billion last year), The average Walmart employee makes in a one-earner household, thousands below the $22,000 poverty line. As part of their hiring process, many Walmart locations provide the forms and information to their new hires to get on government aid programs like food stamps. This takes us back to the point of what the Pope said. As a rule, no matter how much the rich have, it will never be enough, they will not willingly of their own accord help those less fortunate. There are some exceptions to this (Bill Gates, Warren Buffet, and the like) But most of the wealthy are not going to do things to benefit the poor.
For those that think the minimum wage should go up, you are right. Had the minimum wage kept up with inflation from its inception, minimum wage would now be $23.25 an hour, or a little over $48,300 a year. Yes the argument can be made that we want to encourage those working minimum wage to get a useful skill set and get a better job, however, with as many people as are out of work after the recession (still around 10% in most places) people are working harder for less money just trying to tread water and stay afloat. Meanwhile, Republicans in congress are dolling out tax breaks for the rich while cutting funding for assistance programs that help those that are working hard and barely surviving.
Oddly enough, looking at what states receive the most federal money for things like SNAP, TANF, SSI, Medicaid, etc is quite different than you would expect from all the Rhetoric. In order from most to least money from the federal government; New Mexico, Mississippi, Alaska, Louisiana, West Virginia, North Dakota, Alabama, South Dakota, Virginia, and Kentucky. All of these states use far more in federal money than they pay in. The states that pay in far more than they take out? New Jersey, Nevada, Connecticut, New Hampshire, Minnesota, Illinois, Delaware, California, New York, Colorado. There is an interesting correlation between blue states (Democrats that are in favor of the aid programs) who pay in far more into those programs than they use, versus the red states (Republicans that are against the aid programs and want to shut them down) who use far more of the money from those programs than they pay in.
In short, trickle down economics is an economic model that’s been an overwhelming failure for 98 percent of Americans while benefitting only the richest 2 percent. Who are conveniently pulling the wool over the eyes of many, who vote them ever bigger tax cuts while cutting the much needed aid from the poor and disenfranchised who need it. The Republican party has been mostly swept away and replaced by the Tea Party, who’s sole concern are their corporate backers and are exceptionally good and convincing those that need the most help, to give that up to make the rich even richer. All of this occurring while more states become “Right to Work” states that remove the unions that fight for fair pay and safe working conditions while making it possible for you to lose your job at any time and for any reason.