This is kind of an ancillary topic to the "$15 for McDonald's Workers" topic that was discussed recently. I wanted to start a new one because I have a different focus, in which the idea of minimum wages is only one part of the discussion. I want to challenge some of the accepted notions about the American economic framework, because I think that times have changed in ways that many people do not realize.

As Americans, we have a shared belief in a type of "free market capitalism". I'm not sure people really know what that means, but we think we do and that drives a lot of our attitudes. There is a general sense that "What's good for (insert corporate name here) is good for the country". As long as businesses are successful and profitable, the "rising tide" will enable everyone to benefit. Unless obviously criminal, business actions are usually accepted as being part of the pursuit of capitalist profit, and the rewards are accepted as a byproduct of capitalist success.

However, since at least 1980, our tax and national economic policies have overwhelmingly favored business and the wealthy, and the power and influence of both large corporations and the richest members of society has increased disproportionately--to the point where corporations can "rig" the game in their favor.

And here is where the fast-food industry will be used as one--but certainly not the only--example.

A recent report from the University of California-Berkeley Labor Center stated that, due to a combination of low wages and benefits, "many of the families of fast-food workers must rely on taxpayer-funded safety net programs to make ends meet." The median pay for front-line fast food jobs is $8.69/hr, with many jobs paying the minimum wage. An estimated 87 percent do not receive health care benefits through their employer.

52 percent of the families of front-line fast food workers are enrolled in one or more public programs.

The cost of public assistance--Medicaid, CHIP, food stamps, earned income tax credits--amounts to $7 billion per year. That cost does NOT include other forms of public assistance such as child-care subsidies and reduced price school lunches.


(http://laborcenter.berkeley.edu/publiccosts/fast_food_poverty_wages.pdf)

The companies who benefit from that low-cost labor earned $7.44 billion in profits last year and paid their top executives $52.7 million.

(http://www.nelp.org/page/-/rtmw/uploads/NELP-Super-Sizing-Public-Costs-Fast-Food-Report.pdf?nocdn=1)

The list includes the names you would expect: McDonald's, Burger King, Taco Bell.


The idea of this post is not to demonize the corporations. They are playing by the rules (although they are the rules that they helped set up by buying enough public officials).

I am making the point that we have gradually seen a change in the business structure of this country where large corporations--who hate "free markets" as much as any far-left socialist--can follow a practice of privatizing profit and socializing risk.

One argument against the idea of a "living wage" law is that the low wages in the fast-food industry are "market driven" -- that they are a natural result of the competitive forces faced by these businesses and any attempt to increase them would unfairly harm those businesses.

These figures suggest that is a false argument. The fact is that the low cost of fast-food labor--and thus a large portion of company profits--is actually subsidized by taxpayers.

And the fast-food industry is not the only one who enjoys this amount of public subsidy. Another study earlier this year estimated that the average WalMart store generates a significant increase in social support funds needed in the communities in which they are located.

I am not saying this justifies a "living wage" law. I am more interested in changing the cliches that usually make up these discussions. We need to get away from the idea that corporations are always the "makers" and workers are suspiciously viewed as "takers". That workers who ask for a larger share of the rewards that their labors make possible -- wages, benefits, etc --are generally viewed as selfish and greedy, while huge corporate profits, salaries, and benefits are considered "justified" because of "the market" and because of "meritocracy".

We need to take a broader view of "welfare" and "entitlements" and expand that discussion to include corporate subsidies and various ways in which corporations are allowed to control market forces so that they can't lose. We need to recognize that taxpayers pay a substantial amount in taxes to subsidize corporate profits and executive salaries, so it is fair to question those practices without being accused of being "anti business" or "socialist".