Welfare and Jobs

Thesis: Americans needs to earn high wages in order to live and ultimately, save the government money.

Higher wages will lead to a higher standard of living for American citizens. This is why companies need to raise wages. I believe the way to do this is voluntary, not through government mandated actions. This will be good PR for the companies and lead to a better overall perception in the eyes of the public.

According to a recent article published by the Wall Street Journal, the majority of Americans receiving well fare already have a job. The perception many Americans have is that well fare recipients are unemployed and lazy, with the well fare checks discouraging them to go out and find a job. While this may be true to some portion of those on well fare, it is not true in the aggregate. A study by researchers at Cal Berkeley found the majority of households receiving government assistance are headed by a working adult. “The study found that 56% of federal and state dollars spent between 2009 and 2011 on welfare programs — including Medicaidfood stamps and the Earned Income Tax Credit  — flowed to working families and individuals with jobs. In some industries, about half the workforce relies on welfare.” http://blogs.wsj.com/economics/2015/04/13/get-a-job-most-welfare-recipients-already-have-one/?mod=WSJ_hpp_MIDDLENexttoWhatsNewsForth. This clearly is a problem that needs to be corrected by these large companies many of these people work for. There is no way people should be able to work and hold a full time job, but yet, still need additional assistance from the government. In the fast food industry, 52% of workers receive some form of government aid. Luckily, this receives a lot of attention in the media and the problem seems to be getting better. McDondalds says it plans to raise wages for some of its lowest 90,000 workers. While this is a good idea and sounds like a good plan, it really will not change much. They will pay $1 dollar more than the minimum wage to these workers. In my opinion, this is still not enough. It also only includes 90,000 workers, which is minimal compared to how many works McDondalds employees around the globe. In addition, “The increases could reflect some payback after several years of wages barely keeping pace with inflation, or could indicate that skilled-workers who resorted to restaurant jobs in the economic downturn are now seeking better-paying work.” http://www.wsj.com/articles/mcdonalds-to-raise-hourly-pay-for-90-000-workers-1427916364. If wages are not keeping up with inflation, then the purchasing power of these people are increasing and thus, they are essentially getting poorer. This is a problem that needs to be corrected.

Finally, the low wages paid by companies around the country costs the US government, and tax payers, money. A recent report for that a single 300 person Walmart store in Wisconsin costs tax payers at least $904,542 per year, or about $5,815 per employee. This is crazy as this money could be put to such better use. As this illustrates, the system is messed up and the only way to fix it is for companies to provide higher wages. This will have so many positive externalities for the country now and in the future.

 

 

 

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