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What’s Up with Goodwill?

The National Employment Law Project calculated that two out of three low-wage workers are employed by large corporations. Only one-third work for small businesses, which throws shade on the argument that raising the minimum wage will destroy the economy by slaughtering small businesses. No, two-thirds of the stingily-paid are in the employ of huge, profitable enterprises.

And some underpaid Americans work for Goodwill Industries, much to its shame. Investigative journalist John Hrabe has called the nonprofit exploitative, a racket, and the worst charity in America. Investigating for Watchdog.org, he learned that most Goodwill branches were paying disabled people less than the federally determined minimum wage.

Hrabe’s reportage contains sentences that are scarcely believable, such as this one:

More than 100 Goodwill entities employ workers through the Special Wage Certificate program, a Depression-era loophole in federal labor law that allows organizations to pay subminimum wages to people with disabilities. According to Goodwill, 7,300 of its 105,000 employees are subject to the minimum wage exemption…

Well, it’s a charity, right? It takes in used items of all kinds, and sells them cheaply to the economically disadvantaged. Maybe there simply isn’t enough money to go around. Except, there is. Goodwill was paying out more than $50 million per year to its top earners, with some individuals making $1 million a year. Hrabe gives many shocking examples of executive compensation that has really gotten out of hand.

And the travel expenses? Nearly $40 million, for a year’s worth of travel for the upper echelon. What possible need is there for people who run a charity to travel so much? Goodwill isn’t a thirsty young startup, trawling for business. It’s a long-established, staid, and supposedly trustworthy nonprofit organization. And nowadays, we have the Internet and video-conferencing, and all that good stuff. So the question is worth asking — what’s up with the urgent need to go somewhere?

Busted

Goodwill was accustomed to skating along, enjoying an excellent reputation that received bushels of good press — and didn’t expect its labor practices to be questioned. Some reporters latched on in the early 2000s, and found that the workers were making as little as 20 cents per hour, but their complaints did not gain much traction. In 2012, it was 22 cents an hour.

When you hear someone disparage the minimum wage because it supposedly prevents less-abled people from ever getting jobs, don’t listen. That is a downright fib, as they very well know or ought to. In government, for every regulation, there is a waiver. In this case, a thing called the Special Minimum Wage Certificate allows companies to pay some people far less than the legal minimum.

So, even if the minimum wage went up to $50 an hour, the government would still be willing to cut a deal for businesses that find and exploit the Special Minimum Wage Certificate loophole. And even though Goodwill is nominally a nonprofit, and doesn’t pay taxes, it is one of those privileged businesses.

Hrabe learned some details from Brad Turner-Little, Director of Mission Strategy at Goodwill International, Inc. The special work certificates are only good for two years, and a massive amount of paperwork is supposed to prove that the organization complies with all the applicable regulations. Consequently, the journalist asks:

Why is Goodwill spending so much time and money on this bureaucratic nightmare? Remember, Goodwill claims that the sub-minimum wage policy helps them save money and hire more workers.

It would be nice to reassure readers that this is just a history lesson, and that all discrepancies have been remedied, but sadly this is not the case. In 2016, after four months of investigative work, Henry J. Cordes wrote a highly revealing series for the Omaha World-Herald.

Among other problems, the local Goodwill execs were quite disproportionately overpaid, in comparison with other Goodwills and other nonprofits. Here is a rather incendiary quotation:

While Goodwill Omaha runs job training and assistance programs that serve thousands annually, nearly all of those activities have been funded by government grants and contracts — not the $4 million in annual profits generated by Goodwill’s thrift stores in eastern Nebraska and western Iowa. Even its signature program that employs disabled job trainees within its stores is primarily funded by school districts.

Whoa! Did he just say Goodwill takes money from school districts? In what universe are schools so lavishly bankrolled that they can financially support an charitable organization whose bigwigs collect gigantic paychecks? This alone should be enough to inspire some real public backlash.

Reactions?

Source: “Goodwill Minimum Wage Loophole Will Shock You,” HuffingtonPost.com, 05/15/13
Source: “Goodwill’s Charity Racket: CEOs Earn Top-Dollar, Workers Paid Less Than Minimum Wage,” HuffingtonPost.com, 09/25/12
Source: “Goodwill Omaha: No Culture of Thrift,” DataOmaha.com, 10/22/16
Photo credit: Mike Mozart (JeepersMedia) via Visualhunt/CC BY

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Nonsense Around a Corporate Decision

Apparently, the minimum wage issue is vulnerable to all kinds of potential spin, depending on particular number-crunching techniques, how various terms are defined, and so forth. As in so many fields of human endeavor, unreliable data can doom to failure any attempt at meaningful analysis.

Putting that aside, there are things the voting public forgets, for better or worse. For instance, these few sentences from Garry Reed say a lot:

It’s not so much that the minimum wage is back in the news again as it’s always in the news. No matter how high it’s raised there will always be someone demanding that it be raised more. They miss the point that the minimum wage is not, was not, and never should be meant to be a “living wage” and no one should ever think that it ought to be.

Keeping that in mind, it is not surprising that in no state of the Union can a full-time minimum wage worker afford to rent a one-bedroom apartment. It is difficult to reconcile a full-time worker’s inability to afford shelter with the fact that corporate executives pull down as much as $10,000 PER HOUR.

Here is a repetition of the assertion that we just don’t understand what the minimum wage is meant to be, phrased this time by Sara Lin:

The minimum wage was never intended to be a “living wage” on which one could support oneself, let alone a family… The minimum wage was meant to be an “entry level” wage, that is a minimum wage allows an employer to hire and pay a lower wage to someone who has no job skills, let alone any experience in holding down a job.

That last bit is important. Anyone who has owned or managed a small business has stories to tell about absolutely clueless new hires. Through ignorance or carelessness or just plain inability to function in a socially acceptable way, a single employee can cause enormous damage. But they still have to be paid!

In some businesses, elderly retirees are welcomed because at least they’ve got the basics down. A person accustomed to the world of work is familiar with the concept of showing up on time, wearing shoes rather than bedroom slippers. It is possible to empathize with employers who resent compensating incompetence.

Of course, salary isn’t the only factor. There are unemployment and work comp insurances to be paid. And the phenomenon known as “wage compression,” which is what happens when starting salaries are too close to whatever the existing workers are getting. Not surprisingly, the old hands feel unappreciated and indignant, and ask for raises.

Big businesses

It is appropriate to worry about effects on small businesses, but statistically, most minimum wage workers are employed by companies with over 100 employees — in some cases, thousands and thousands of employees, who are slighted by such tricks as keeping their hours under the “full-time” limit, to avoid paying benefits. As a result, America is full of people working at two or three different minimum-wage jobs that add up to well over “full-time hours,” who are still not entitled to any benefits.

One of the behemoth corporations is Walmart, famous for the fact that its employees are so poorly compensated, many are on food stamps and other forms of government assistance financed, of course, by the taxpayers. At the top of our page is an internet meme discussed by a writer named Steve Straub in a piece titled “Another Ridiculous Liberal Minimum Wage Meme DESTROYED by Facts.”

Here is how the writer purports to annihilate the concept that Walmart could easily afford to pay its workers more:

Earlier this year, Walmart raised the starting wage for more than 100,000 of its employees. This move reportedly cost at least $1 billion to implement, though the long-term costs could potentially be far worse.

Supposedly, because of this gesture, Walmart had to not only fire 1,000 employees from its home office, but close five of its stores across the nation, affecting another 2,500 employees. As Straub predicted, it did get worse, because only weeks later Walmart announced it would close 154 stores, affecting 10,000 workers.

All, supposedly, because the extraordinarily generous (yes, that is sarcasm) company raised some workers to $9 an hour. Straub winds up with:

When either government or businesses raise the minimum wage, it skyrockets costs.
To compensate, businesses then lay off workers. So yes, some workers wind up with a more livable wage, but at the cost of a bunch of other workers winding up with NO WAGE at all!

Economists could argue about the validity of this conclusion all day. The point here is: How does any of this realistically discredit the disputed meme?

Let’s review the text:

The Walmart family is worth $144 billion. Tell me again why they can’t afford to pay their workers $15 an hour?

The question still stands. As the old saying goes, the Walmarts already have more money than God. With the family taking such a huge cut of the profits, ordinary people are indeed still asking why the Walmarts can’t afford to pay their workers better, or even a lot better.

Straub’s article didn’t even put a dent in that question. There is nothing ridiculous about wondering why the executives and shareholders of Walmart are justified in taking such a large share. The only ridiculous part is that they are able to get away with it.

Reactions?

Source: “There’s More to Minimum Wage Jobs Than Wages,” SoapBoxie.com, 03/23/17
Source: “Minimum Wage Should Not Be Living Wage,” CivilBeat.org, 05/17/13
Source: “Another Ridiculous Liberal Minimum Wage Meme DESTROYED by Facts,” TheFederalistPapers.org, 11/26/17
Image by Other 98.com

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Things People Say About Minimum Wage

When all else fails, minimum wage opponents become fervently patriotic, because freedom is at stake. Shouldn’t a person have the right to work for any amount they are willing to accept? There is one little problem with that. If everyone believed it, we would never have had labor unions, and America would have never become the economic powerhouse that gives patriots something to wave the flag about.

A version of the red, white and blue sentiment was phrased by Michael Rathbone, former policy researcher at the Show-Me Institute:

If workers do not feel that they are being fairly compensated, they are free to look for employment elsewhere.

The trouble is, America is full of people fearfully hanging onto awful jobs. Hasn’t this guy ever heard of one-industry towns? If the catfish processing plant is the only local business, you work at the catfish plant, or else as a bartender, and there are only so many bartender jobs.

On the other hand, Garry Reed wrote in an article for Soapboxie.com:

It’s true that some people get stuck in low-paying jobs and can’t get unstuck through no immediate fault of their own… Maybe they dropped out of school, had a kid, had another kid, never learned to manage their money, did drugs, weren’t willing to leave family and friends and familiar surroundings to seek out a better life, so they took the first job they could get and turned it into a rut.

So, in other words, he’s saying it is their own fault. They quit school, didn’t learn how to balance a checkbook, started drinking, didn’t use contraception, or possess quaint old family values that require caring for elderly or disabled relatives. These people, according to Reed, are victims of their own bad choices.

In which case, expecting the government to make things better, by forcing employers to pay a minimum wage — and even increase it every now and then — is grossly unfair. Making businesses subsidize low-paid workers is “wrong” and constitutes an injustice.

The thing is, somebody is going to wind up subsidizing those low-paid workers who need food, medical attention, etc., and it’s going to be the taxpayers. Shouldn’t it be instead the businesses they work for?

But wait — Reed perceives even more injustice perpetrated upon employers who, after all, provide valuable training:

And in some cases the employer of a low-skilled part time worker just may be training someone who becomes a future competitor who out-works, out-performs and out-competes that former employer and runs him or her out of business.

Wait a minute. It seems like, in line with the writer’s own tough-love philosophy, if somebody does the job better than the company where they started out, that too should be accepted as a price of freedom and the marketplace!

This sentence written by James Dorn in a Forbes article is an example of one type of the mind-boggling statement that comes up in these discussions:

But if a worker is producing $5.15 per hour and now the employer must pay $9 per hour, there will be little incentive to retain her…

The verb “produce” is interesting. While it has yet to be proven that any Chief Executive Officer, anywhere on earth, even the head of Walmart, “produces” $9,000 per hour, it never occurs to any of these theorists that, just maybe, executive compensation should be cut.

Dorn writes:

Employers have more flexibility in the long run and will find ways to economize on the higher-priced labor.

By economizing, he’s talking about such strategies as holding back on raises for the more established, higher-paid employees. Well hey, how about economizing on the millions doled out to CEOs, rather than penalizing long-term employees?

Incidentally, arguing some aspect of the minimum wage debate, another Dorn sentence goes like this:

If one gets empirical results that go against the grain of long-held economic laws, one should be very wary of advocating policies based on those results.

What??? He’s not talking about legislation, but law in the sense of the law of gravity, the laws of nature; and it doesn’t even make any sense. If empirical results — otherwise known as reality — go against “long-held economic laws,” then maybe they weren’t laws in the first place. But this is an example of the kind of mumbo jumbo that surrounds minimum wage discussions.

In his 2013 OurFuture.org article, Richard Eskow looked at another objection:

There’s also their much-beloved fantasy of the minimum wage as “racist.” Seriously. It’s a dirty argument to make — but then, there’s a lot of money at stake.

He refers to a writer named Jonah Goldberg who asserted that the original promoters of the concept were racists who instituted minimum wage because it would harm black workers, saying, “The Wall Street Journal even calls an increased minimum wage ‘The Minority Youth Unemployment Act.'”

There is one very frightening potential consequence of minimum wage legislation that is even worse than the outsourcing of jobs to workers overseas: the probability that increasing numbers of jobs will be filled by robots. Twenty years ago, many people thought the idea that supermarkets could get along without cashiers was ridiculous. Now, grocery chains have installed self-checkout operations that not only eliminate cashier jobs, but turn customers into unpaid workers for the corporation.

Reactions?

Source: “The $22 (An Hour) Question,” ShowMeDaily.org, 03/31/13
Source: “There’s More to Minimum Wage Jobs Than Wages,” Soapboxie.com, 03/23/17
Source: “The Minimum Wage Delusion, And The Death Of Common Sense,” Forbes.com, 05/07/13
Source: “Real Faces of the Minimum Wage,” OurFuture.org, 04/21/13
Image: United Food and Commercial Workers Union

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People, Robots and Minimum Wage

One of the most interesting aspects of the ongoing minimum wage debate is a warning that we will all be replaced by mechanical substitutes. An article from the Cornell Roosevelt Institute echoes a point that House the Homeless has made many times: that a person who works full-time ought to be able to support himself or herself without needing to apply for food stamps or other government assistance to get by.

There are pro and con arguments: If workers are better paid, they can buy more stuff and boost the economy in general. Human misery is ameliorated, because people don’t need to work multiple jobs just to survive. When people are happier at their jobs, they don’t engage in slacking, sabotage, embezzlement, or other acts harmful to the business. They stay in place, and employers are not faced with the expenses associated with hiring and training.

Jack Robbins quotes experts who do not foresee a higher minimum wage as leading inevitably to a catastrophic result:

According to economist Arindrajit Dube, a relatively small increase in the minimum wage could lift 4.6 million laborers out of poverty. Longer-term effects could reduce the number of people living below the poverty line by 6.8 million. Sarah Lemos of the University of Leicester finds that a 25% increase in the minimum wage would only increase aggregate prices by .4%.

On the other hand, raising the minimum wage is said to increase inflation and unemployment. When the cost to businesses is raised, business fires people, so rather than X number of workers struggling along, you get Y number of workers doing okay, and Z number of workers back out on the streets without any job.

But then comes the most devastating possibility of all: When human employees cost too much, businesses respond by installing robots. An Oxford University economist theorized that 47% of American workers are at risk of having their jobs automated — in other words, taken over by robots of one type or another, even if they don’t appear humanoid.

A counterargument to that is, whenever possible, businesses are going to go ahead and install automation anyway, regardless of whether or not they are being entreated to raise the minimum wage. So, either way, human workers are out of the picture.

On a global scale

Historically, there has been another devastating argument against even trying for a higher minimum wage in America: We had best not annoy manufacturers with further requests for decent pay, because it will only encourage them to send jobs overseas.

Today, that point is almost moot. So many manufacturing jobs have already been shipped overseas, what else can industry do to us? And if workers in one country decide to demand reasonable pay, business will just pull up stakes and move to another country that is even more deeply sunk in poverty, where workers will be satisfied with even less.

As writer Hamilton Nolan says it:

The global economy is the delightful playground of multinational corporations. They’re able to drastically lower their labor costs by outsourcing work to the world’s poorest and most desperate people. And they’re able to escape paying taxes… The global economy is extremely advantageous to corporations, who owe no loyalty to anyone or anything except their stock price…

Nolan characterizes the concept of a minimum wage as society’s assertion of its moral grounding, a “statement of our belief that the economically powerful should not have a free hand to exploit the powerless.” One answer would be to initiate a worldwide standard, a universal minimum wage that would confound businesses engaged in the race to the bottom.

Of course, getting the whole world to agree on anything is not an easy task. The writer mentions how the rich tend to scoff at proponents of a living wage, and accuse us of being naive dummies who just don’t understand the inherent and immutable rules of capitalism.

He writes:

Not true. We understand them all too well. We understand that, as history has amply demonstrated and continues to demonstrate, absent regulation, economic power imbalances will drive worker wages and working conditions down to outrageous and intolerable levels…

The system that we have — in which the vast bulk of profit flows to corporate shareholders, rather than workers and governments — is not a state of nature. It is a choice.

Nolan makes the point that we no longer tolerate outright slavery where people are paid nothing at all. (Except that we do, with prison labor — but that is a whole separate discussion.) He says:

We would never countenance buying goods produced with slave labor, just because they were cheap… Today we only tolerate economic slavery. Today’s workers are free to quit their jobs at any time, and starve to death.

Reflections from House the Homeless President Richard R. Troxell:

The remaining minimum wage jobs cannot be outsourced. For example: You cannot outsource digging a ditch to China. You must be on site to take tickets at the movie or show theaters. Babysitters must be present to kiss, hold and care for our babies as do childcare workers. Restaurant workers including servers, hostesses, busboys, and pot-shack workers must also be on site.

Construction laborers must be on the job to pick up the scraps of lumber and sweep and bag or barrel the trash. Dry clean workers must be present to take our shirts and skirts, and circle the areas of special cleaning concern. America’s retail workers must be on site to service us and restock the shelves. Farm workers must be on site to pick our cotton, tomatoes, corn, etc.

Receptionists must be on site to attend our front desk phones, to field questions and redirect calls. Nurse’s aides who clean hospital rooms, clean up vomit, empty bed pans, and even give us bed baths must be on site to care for us. Hotel and motel maids clean our rooms, change our sheets, and turn our beds to welcome us here in America. Janitors clean entire buildings including sweeping, mopping and waxing floors in schools all across our homeland.

Fast food workers who work at Bob’s Big Boy restaurant, Wendy’s, What-a-Burger, Kentucky Fried Chicken, Stub’s Bar-B- Q must be present. The Texas Chili Parlor, TGIFs, Marconi Grills, Olive Gardens, a bazillion Chinese restaurants, etc., and of course McDonald’s workers must be present, on sites all across our nation to serve our people. And they deserve to be paid a minimum amount sufficient so that they won’t require a subsidy from you and me, when it is the employer who benefits from their labor.

Also recommended: Writings by Richard R. Troxell

Higher Minimum Wage Won’t Cure Homelessness. This Will.

Open Letter to the Presidential Candidates

Livable Incomes: Real Solutions that Stimulate the Economy: A call to action to create economic stability and growth (Kindle Edition)

Reactions?

Source: “Rise of the Automaton: How Robots Change the Minimum Wage Debate,” undated
Source: “We Need an International Minimum Wage,” Gawker.com, 05/22/13
Image: Internet meme, fair use

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How Clean Does a New Broom Sweep?

homeless-vs-wall-costNobody wants to flush dollars down the toilet. Here is a sentence from “An Open Letter to the Trump Administration”; written by House the Homeless:

Attack Taxpayer Waste: Address the shortcomings of the Supplemental Security Income Stipend, SSI that will result in recipients being able to afford basic rental housing with the disability stipend they already receive.

But in the legislative environs of Washington, D.C., there are many who believe that Social Security, housing assistance, and disability stipends are the taxpayer waste. Similarly, House the Homeless would like to see the minimum wage raised, preferably in the form of the carefully designed Universal Living Wage.

However, a lot of politicians want to see no minimum wage, period.

According to the organizations that keep track of these matters, basic housing has become even less affordable in recent years. All kinds of crazy talk is going around, about messing with Social Security and other safety-net programs. There will be tax cuts, but not for those who need them. Veterans will have to struggle to get their due.

What else will the new administration mean for the half-million Americans who are experiencing homelessness? According to the Los Angeles Homeless Services Authority, 47,000 of them live in the entertainment capitol, which is where ABC’s Antony Funnell learned that:

The homeless of LA don’t fit an easy stereotype — they’re young, old, male, female, black, white, Asian and Hispanic. Some clearly have mental health issues.

Some work during the day and live on the streets at night. Some are shabbily attired, others well dressed.

Not all of them sleep on the streets. Some find accommodation in homeless shelters. But there are too many people for the services available and nowhere near enough beds for everyone.

Anyone who follows the news will have noticed stories originating from many cities, about plans to end homelessness; and a lot fewer stories announcing the end of homelessness in any actual place. LA Mayor Eric Garcetti has a plan to eradicate homelessness.

Last year the city’s minimum wage went up to $15, and voters passed a $1.2 billion bond issue that will pay for the building of 1,000 apartment units per year over a 10-year period. So, that’s a bright spot. But nationally, the big picture does not look promising.

To lead HUD (Housing and Urban Development), the new president chose a multimillionaire doctor who is of course fully on board with the tax-cut concept, and who begrudges the expenditure of federal money on anything except armaments. He is known to be “philosophically opposed” to welfare programs of all kinds, and criticizes anti-discrimination rules as “social engineering,” so this does not bode well. The department employs around 8,300 people to keep the wheels turning and, hopefully, compensate for Ben Carson’s lack of field experience other than having lived in public housing as a child.

Health care and La Migra

On the medical front, the prognosis is quite grim, since the administration plans to dismantle the Affordable Care Act. Substance abuse treatment programs are threatened. As we have seen, a large number of street people have histories of traumatic brain injury.

When less urgent levels of care are denied, hospital emergency rooms bear the brunt of the resulting acute illnesses. It goes without saying, that many unhoused people will suffer and die, and a great many currently housed people will experience homelessness for the first time after they go broke from medical bills.

As if all this were not ominous enough, Caroline Spivack reports that Brooklyn is coping with an increase in the number of people who would rather live on the streets of New York than be deported. They are afraid to go near any shelters, and with ICE agents haunting schools and churches to nab undocumented residents, this is a reasonable fear.

Admittedly, some individuals genuinely need to be taken into custody. New York is a sanctuary city and technically, there are well-defined criteria around whom to punish and eject from the country. Supposedly, “officials will not blow the whistle on non-violent undocumented immigrants who enter the shelter system.” In theory, an innocent person, even if undocumented, would have nothing to fear. But nobody is willing to take a chance, so the alleys and doorways overflow.

Reactions?

Source: “What will Donald Trump mean for America’s half a million homeless people?,” ABC.net, 02/08/17
Source: “Undocumented street homeless rises after Trump’s deportation order,” BrooklynPaper.com, 02/07/17
Image by Really American

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Next Tuesday Is Bridge Day

bridge-day-hth
That’s short for Bridge the Economic Gap Day, which is September 6, a week from today. Here are words from the President of House the Homeless, Richard R. Troxell:

During his tenure, President Obama said that income inequality is the single most important issue of our time. But the actions of the administration and Congress have created a failed federal minimum wage that still clings to the archaic and pedestrian concept that “one size fits all” in a nation of a thousand-plus economies. Who hasn’t traveled? Who hasn’t found that a meal in Washington, D.C., is at least twice as much as one in Scranton, Pennsylvania, or the rent in Austin, Texas, is almost three times that of Harlington, Texas?

The failure of Congress to reasonably and timely raise the minimum wage even at its one-size- fits-all rate has caused major, heavily populated cities to independently raise their own minimum wage out of desperation. But these $15.00 per hour increases still fall way short of living wages in these major cities, and would put small business out of business in our smaller cities. And, soon enough, time and inflation will again erode the wage.

The answer is simple. We need to index the federal minimum wage to the local cost of housing. In this fashion, if a person puts in their 40 hours of work, they will be able to afford a basic rental property… No matter what that rent escalates to, or where it’s located. This makes sense for business as it stabilizes their minimum-wage workforce. This makes sense for the local construction industry (nationwide) that will get to construct housing for the 3.5 million people experiencing homelessness. And it makes sense for the homeless minimum-wage worker who can finally attain housing.

For these reasons, the theme of the this year’s Bridge the Economic Gap Day (when we get on our nation’s bridges and fly our banners for Living Wages) is: INDEX IT! Index the wage to the local cost of housing so that as a worker, I’m drawn back in off the dole to a life of satisfaction and accomplishment… So that I can again earn a fair wage for a fair day’s pay. INDEX IT! Index it so that as a worker I can experience the true meaning of the word “opportunity.” Then, as an American with a dream, I can combine the two.

For much more information, see Katie McKaskey’s writeup from last year’s Bridge Day. Everything there is to know about the Universal Living Wage can be found in the pages of House the Homeless.

Richard’s book, Looking Up at the Bottom Line, explores the idea of economic homelessness and how we can drastically reduce the level of taxpayer dependence on such supports as food stamps, TANF, general assistance, earned income tax credits, etc. At the same time, the book points the way to stimulate the local housing industry all across America while shoring up new business startups and ending economic homelessness for over 1,000,000 minimum-wage workers.

An interesting resource is this collection of charts, like the one titled, “The last two decades were great… if you were a CEO or owner. Not if you were anyone else.” To spend some minutes musing over them is to experience a disturbing array of revelations and emotions.

Remember how Seattle made big news by raising its minimum wage? The Seattle Minimum Wage Study Team issued a report in July, and Jared Bernstein reviewed it for The Washington Post. It examines the impact of the first stage of Seattle’s wage hike, which went into effect in April of 2015.

This raise was from $9.50 to $11. The second stage will occur in 2017, when businesses with 500 or more employees are scheduled to raise the minimum to $15. Small businesses don’t have to catch up with that until 2021.

There are a lot of details to take into consideration, but the outcomes are said to “fit comfortably into a view well understood by minimum-wage advocates and increasingly accepted by economists: most increases have their intended effect of lifting the pay of low-wage workers with little in the way of job losses.”

Bernstein explains his discomfort with the way in which Seattle’s advance has been covered by the press, and many other matters too. The 120 comments appended to the piece add more layers of nuance.

Reactions?

Source: “15 Mind-Blowing Facts About Wealth And Inequality In America,” BusinessInsider.com, undated
Source: “So far, the Seattle minimum-wage increase is doing what it’s supposed to do,” WashingtonPost.com, 08/10/16
Image by House the Homeless

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Tax Day Hurts

taxesThere are a thousand different reasons for it, but the bottom line is, income tax is a huge issue for almost everyone. For more than 15 years, House the Homeless has promoted the annual “Tax Day Action!” on April 15.

This year, as always, the HtH family will take part in protests at Post Offices throughout America. Richard R. Troxell, the organization’s president, explains the rationale:

Workers have been forced in ever-increasing numbers to depend on food stamps, general assistance, and Temporary Assistance for Needy Families (TANF). Congress intended these to be emergency, stop-gap measures. Instead, many businesses use government support to save on basic payroll. This is creating an ever-increasing burden on the taxpayer.

What happens when businesses take unfair advantage of the tattered few remaining shreds of the social safety net? Children don’t have proper nourishment and are unable to get the most out of their schooling. Families can’t afford rent, and wind up living in garages, basements, vans and, in the worst-case scenarios, in shelters or constantly-harassed homeless camps.

Learn more about the Universal Living Wage concept and what to do about it. Meanwhile, let’s look at some specific issues connected with how the refusal to end homelessness impacts the taxpayer.

Whether a service is paid for by local, state or federal taxes, all taxes come from the same source: us. The government, per se, does not have any money. At the municipal, state, or federal level, the government has no money except what we hand over to it in the form of income tax, property tax, sales tax, and so forth.

Sure, the government takes in a little something from the few remaining corporations that deign to pay taxes, but how do those businesses make up what they consider to be their rightful profits? Again, they get it from us.

What happens when a business, large or small, does not pay employees fairly or adequately? Every taxpayer chips in to pay for food stamps, medical care, and other necessities for those employees and their families. There are all kinds of less obvious costs, especially when people are unable to pay to live under a roof, and experience homelessness. Taxpayers finance the building of shelters or, more likely, the repurposing of old buildings to become shelters.

Police are kept busy chasing unhoused people from one makeshift settlement to another, and arresting them for minor crimes, and who pays to keep them in jail? We all do. The mission of the police, supposedly, is to serve and protect the citizens. That mission has been perverted into serving and protecting only property owners, while making life miserable for those who need protection the most, the people who have lost almost everything and really don’t need to be served any more grief.

Courts systems waste their time and our money assessing fines that will never be paid, for rinky-dink offenses like loitering. Another thing that courts do, occasionally, is to award damages to people who have been harmed by over-zealous policing. People whose possessions have been destroyed by police sometime band together, find willing legal representation, and sue cities for damages.

It’s never an easy battle, but hospitals that dump patients on Skid Row have been fined – and one way or another, the person who ends up paying the bill is the ordinary taxpayer. The families of homeless people killed by the police have been awarded damages. Allowing homelessness to continue in America damages everyone.

Tax Day always hurts, but when the panic and the cussing are over, it is totally worth sitting down to have a good hard think, about exactly who is paying for what, and why.

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Photo credit: efile989 via VisualHunt.com/CC BY-SA

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Minimum Wage Matters

Walmart business strategyThat’s exactly what the bosses want! They want us fighting over who has the bigger pile of crumbs so we don’t realize they made off with almost the whole damn cake.

Jens Rushing wrote those words, as part of a larger message that could be condensed even further into the popular warning, “Check yourself before you wreck yourself.” In writing his manifesto, Rushing’s aim was to implore workers to wake up and stop complaining about other workers getting a raise. Someone in his own field, for instance, could easily feel resentment about a fry-basket jockey making the same hourly wage as a paramedic. Rushing and his colleagues are highly trained, extremely competent, and responsible for life-and-death decisions. But he asks everybody to stop and analyze the situation.

Among professional comics, one school of thought divides humor into “punching up” and “punching down.” Some consider it improper to make jokes at the expense of anyone who is perceived as less fortunate than the comic and the current audience. Only the powerful can be attacked: only punching up is cool.

But the corporate CEOs and politicians who own everything hope for the opposite. They want us all to punch down. They want us to form warring clans along every possible divisive line—gender and race being the most obvious, but also American-born or newly arrived; white-collar or blue-collar; tech-savvy or future-shocked; housed or experiencing homelessness. Sometimes it seems that we peasants of the “99%” enjoy finding or inventing any reason to fight amongst ourselves. Meanwhile, the Big Bosses are delighted because all the strife diverts our attention from their machinations. As Rushing says:

Why are you angry about fast food workers making two bucks more an hour when your CEO makes four hundred TIMES what you do?

On the subject of bosses that keep the whole damn cake, could there be a more perfect example than Walmart? The CEO makes more than a 1,000 times what the average “associate” makes. And the family that owns a large portion of the company? The six wealthiest members hold more wealth than the combined entire bottom 40 percent of Americans. Four of the Waltons are worth more than $30 billion apiece. Last year, the Walmart shareholders made $7.2 billion.

Walmart is America’s largest private sector employer, and if it were a country, it would have the 26th largest economy in the world. It has 2.2 million employees, which is more than the population of Houston, TX. Just because 25 people apply for every job opening, Walmart feels justified in practicing piracy. People who specialize in figuring out these things say that Walmart could pay workers $14.89 per hour without needing to raise prices. Of course, the notion that the family or the stockholders might take less of the pie is too unlikely to even consider.

But wait—there are even more shameful numbers. Apparently, each store costs the taxpayers more than $900,000 per year in public assistance for its employees. Out of all employers, Walmart is the one where the largest number of workers and their families use taxpayer-funded health insurance programs.  And what about that shady, dicey, sketchy merry-go-round where almost 20 percent of the food stamps in America are redeemed at Walmart AND, coincidentally, a huge percentage of the employees need food stamps to survive. In the comment section of a Walmart-busting website, a worker wrote:

When I started, they actually have a routine to sign you up for Food Stamps and all government assistance during the orientation process. Which is really messed up to take a job to get you away from Government assistance, only part of their plan is to help you get it… I was disgusted at the fact it was part of their written orientation.

Please read the House the Homeless document, “The Fight for $15!” and learn about the Universal Living Wage formula. Universal Living Wage also has a Facebook page. As Jens Rushing said:

Look, if any job is going to take up someone’s life, it deserves a living wage.

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Source: “Paramedic Shares Awesome Facebook Post About Minimum Wage Increase,” good.is, 08/03/15
Source: “14 Facts About Wal-Mart That Will Blow Your Mind,” BusinessInsider.com, 06/06/14
Source: “19 Facts That Show Just How Massive Walmart Really Is.” buzzfeed.com, 06/06/14
Source: “Top Reasons the Walton Family and Walmart are NOT “Job Creators”,” walmart1percent.org, March 2014
Image by Mike Licht

 

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The Fight for $15!

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Fight for $15! This is the battle cry for higher wages. Seemingly awesome. It is now taking hold on both sides of the nation. At this point, Los Angeles, San Francisco, Berkley, Oakland, Seattle, and now New York, have wage agreements that when eased in over time (3-6 years) will result in higher minimum wages!

For a decade, between 1997 and 2007, Congress failed to raise the Federal Minimum Wage at all. This set workers’ wages (coupled with normal inflation) on a trajectory that was so negative and so severe it resulted in putting the basics of life, including housing, beyond the reach of millions. In fact, the ever shrinking minimum wage relative to the cost of daily necessities has become so extreme that even such things as basic rental housing have moved beyond the reach of full time, 40 hour a week, minimum wage workers. Inaction on the part of Congress has only added to the 3.5 million people now experiencing homelessness in this nation. When the federal government failed to act, the people in desperation, jumped into the fray pushing for higher wages in their areas.

This is the very core of our American Dream…a fair wage for a fair day’s work! If you work hard, keep your head down, eventually you can get ahead, get married, and raise a family.

New York Governor Andrew Cuomo has indicated his support for recent economic changes. In fact, at a recent rally celebrating the NY wage proposal, he was noted as saying, “This is just the beginning. We will not stop until we reach true economic justice.” Awesome! Finally, we will acknowledge that the minimum wage worker, the janitor, construction laborer, hotel worker, bank teller, fast food worker, theater attendant, farm worker, receptionist, nurse’s aide, maid, poultry processor, child care worker, home care aid, garage attendant, etc. make up the socio-economic base of our society and that they all need living wages.

But wait a minute! Did we just mention farm workers? These are strictly rural workers. What about all the other minimum wage rural workers? While 80% of Americans live in urban areas according to the 2010 census, 20% of all workers are scattered throughout rural America. How will they and others in their situation, ever attain income-equity if they aren’t unionized and are too few in concentrated numbers to affect change? And by the way, ten states have passed laws that prevent local minimum wages to rise about the Federal Minimum Wage (currently set at $7.25 per hour or $2.13 per hour for agricultural workers).

And while we’re at it, when we examine the $15.00 for those who are organized and in states where it is OK to have a minimum wage above the federal minimum wage, we find that even $15 per hour falls significantly short of what is needed to become housed and to get by on a daily basis. Then we examine the common sense of the Universal Living Wage (ULW) formula, we see that it is based on three existing government guidelines:

  1. spend no more than 30% of your income on housing,
  2. work a full 40 hours per week,
  3. index the wage to the local cost of housing.

We calculate that the wage required to afford a one bedroom apartment using the HUD Fair Market Rents in a few notably cities with high costs of living-

City/State Hourly wage for an efficiency apartment Hourly wage for a one-bedroom apartment
New York, NY $23.00 $24.02
Los Angeles, CA $17.56 $21.21
Seattle, WA $18.69 $22.12
San Francisco, CA $24.15 $31.44

$15 per hour is a far cry from any of these basic requirements, and as we have seen in the past, when some of these $15 amounts go into effect as much as six years away, their value will be highly degraded due to inflation and we will be right back where we started. At the same time, currently in rural America we see that in areas such as found in a few sample cities in the table below-

City/State Hourly wage for an efficiency apartment Hourly wage for a one-bedroom apartment
Chico, CA $9.92 $12.63
Little Rock, AR $10.31 $11.90
Cumberland, MD $8.83 $10.42
Asheville, NC $9.81 $13.90
Decatur, IL $7.92 $10.12

This again is a significant distance from the $15 per hour bench mark in the opposite direction. We cannot destabilize small business throughout rural America as we work to stabilize our minimum wage workers.

What we need to do is act smart and address these two major concerns right up front. First, we have all learned by now that one size (or one wage amount) does not fit all. In fact, we have learned that we are a nation of 1,000 plus economies. Each population area throughout the nation has its own cost of living. We’ve all traveled; we know this to be true. We all know it costs much more to visit/live in Washington DC than it does to visit/live in Rapid City, South Dakota. The ULW formula takes this very real concern into account. We realize that by simply ascribing $15/ hour in an area that only requires $10 per hour would seriously hurt small business in that area. We must not saddle them with a one size fits all $15 per hour wage when it’s unnecessary and destructive to small business. Instead, we can use the HUD Fair Market Rent values to determine what a person should reasonably expect to pay for an apartment and other living necessities throughout the nation in areas about the size of counties. Then by simply making the wage relate to the cost of housing by indexing it to the local cost of housing, we ensure that no matter what that housing cost rises to, if we put in our 40 units of work per week, we’ll be able to afford basic housing and the core necessities of life without hurting small business. This is also a reason for people to be drawn away from welfare and back into work.

We need to keep the federal standard created in 1938 after the Great Depression that established The Federal Minimum Wage, in play for the entire nation. We need to be able to afford the basics in life: food, clothing and shelter (now transportation is added with the ULW formula) but we must tweak The Federal Minimum Wage so it is based locally. By using the same principle throughout the nation, but by indexing it locally, we find that over time, we are able to make the wage relate to even the most costly of housing markets in urban America without hurting small businesses in rural America.

This approach finally solves the problem of wage inequality at the minimum wage level while ensuring that a full time minimum wage worker is able to afford a roof over their head, (other than a bridge), and without adding to the existing homeless population. Finally, it gives businesses the opportunity to plan ahead by knowing exactly what the wage of employees will be now and in the future.

 

Photo: Steve Rhodes

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Livable Incomes: Solutions to Stimulate the Economy

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I have learned that, before people can think outside of their immediate needs, they must have those needs met. I refer to Maslov and the Hierarchy of Needs.

To that end, I have turned my attention to the core economics of the situation.

I have taken the existing Federal Minimum Wage (for those who can work) and tweaked it with a formula (based on existing government guidelines) that ensures that if a person puts in 40 units of work in a week , they will be able to afford basic food, clothing, housing, (utilities included) public transportation and access to the emergency room, wherever that work is done throughout the United States.

This will end homelessness for over 1,000,000,000 people instantly and prevent economic homelessness for all 20,000,000,000 minimum wage workers (immigrants included.)

You can find more details in my 2nd book, Looking up at the Bottom Line, and on the website www.UniversalLivingWage.org.

In my third book, Livable Incomes: Solutions that Stimulate the Economy, I deal with the Prevention of Homelessness. This includes fixing the Supplemental Security Income (SSI) for those who cannot work. From my perspective, looking at our capitalistic society the economy is paramount. This enables us to meet people’s basic needs.

People can either work or they can’t. At the lowest level, The Federal Government has set two standards: the Federal Minimum Wage for those who can work and SSI for those who cannot work.

Not surprisingly, the National Conference of US Mayors has said that a full time minimum wage worker cannot get into and keep (over time) a one bedroom apartment anywhere in the US. That wage is $7.25 per hour. The SSI stipend for people who cannot work is about half of that failed amount at $4.22 per hour.

Our approach to fixing this problem is different than that being promoted by the President (one size fits all) in that we recognize that we are a nation of a thousand plus economies. As a result, our formula indexes to the local cost of housing. In this fashion, if someone puts in 40 units of work (be it from one job or more) they will be able to afford the basics in life…food, clothing and shelter as outlined.

We have addressed the SSI standard in a similar fashion.

Since we devised our formula in 1997, the United States Military has converted its pay system to encompass our tenet of “Geographic Considerations” and changed from VAH, Variable Housing Allowance to BAH, Base Housing Allowance. Since then, the federal Government has similarly created “Locality Pay,” so that when people are transferred to a more expensive area, they are compensated.

Now it’s just, We The People, who are not supported this concept. As a result, 3.5 million people will again fall out of the work force and into homelessness again this year.


Image: 401(K) 2012

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