Did you ever notice that when someone tries to point out how “stingy” government support for the poor is, or how “stingy” Walmart is or how bad the conditions of the low-skilled labor markets are that they invoke a kind of rugged individualism that would make Herbert Spencer blush?
I’ve seen many an argument (and even heard one in a church discussion recently) that suggests that no one can survive on the measly $7.25 per hour minimum wage. After all, this amounts to $14,500 per year, and no one can support a family on such an income. Or better yet, imagine if the government provided a poor person with $14,500 per year – the argument goes that such a handout is a pittance, amounting to a spit in the eye of the recipient. Again, the argument seems to be assuming that we all live atomistic lives on our own.
But give me a break. We know that community is important. We know that strong families are important. We know that married couples not only earn more but that they provide an insurance mechanism that would otherwise not exist. Don’t the folks who like government keep telling us we need to run our economic lives more like a family? Don’t we get the constant stream of pleas to be more communal?
Fine. Sure. I agree. So what is preventing someone who earns $14,5000 at Walmart from marrying someone who earns $14,500 at Walmart? And if marriage ain’t for you, what’s preventing communities of low-wage folks from coming together to pool resources and lower costs? I’d suggest nothing really. Why I am being told to get into the hot-tub with total strangers when many of these total strangers do not even want to get into the hot-tub with their loved ones?
To put more meat on these bones, let’s conduct a thought experiment. Suppose that 25% of the American population is desperately poor — so poor that without charity they would starve. This is about 78 million people. Let’s imagine that we agree to provide each and every one of these people $14,500 per year in cash grants from the government. You’d probably argue that this keeps them starving and poor.
But remember that every poor person, whether young or old, working or not, gets the money. So, if folks are prudent enough to share resources, such as forming a traditional family of two parents and two children, this will yield the entire family a “salary” of $60,000 per year. And since these are government payments, these are not taxed. In other words, in this world the measly “charity” of the government leaves this family of 4 with more disposable income than my current family of 4. Mind you, I have a PhD and 21 years of schooling, a decade of work experience, a wife with a college degree and in good health. I don’t suggest this as a way to say I deserve more, not at all, but rather the opposite – I suggest this to tell you what even a moderate amount of “charity” achieves if only folks practiced what we are told to be doing.
And what of the impact on the government budget? Well, 78 million people at $14,500 per person amounts to $1.13 trillion dollars.
What does our federal government spend this year? How about $3.6 trillion.
What do our state governments spend? Almost $3 trillion.
And our current Commander in Speech is lambasting Paul Ryan for being a Social Darwinist for having the cold heart to propose a reduction in spending by $100 billion each year at the federal level. Heck, we could triple the award or triple the population eligible to receive it and still have $3 trillion to spend on public goods provision. Would any progressive sign up for that in exchange for ending the minimum wage, ending all farm subsidies, ending all welfare programs, ending all government schools, ending Social Security, for starters?