In part one of this post, I discussed:
- The fact that taxpayers have spent trillions of dollars on the poor with zero decrease in poor.
- The fact there are two types of poor people, those who lack the ability to earn a living (the “Can’t poor”) and those who choose to be lazy and not work (the “Won’t poor”), and that these two groups should not be treated the same, yet are.
- The issue of how long to give someone in need free money is a valid issue that is often not addressed.
Today I’m going to discuss some other aspects of this problem, as well as some possible solutions.
A “Living Wage”
A common complaint is that it’s not poor people’s fault they’re poor because they cannot earn a “living wage”. This means that can’t earn enough money at a low-paying job to cover the basic minimums of life (food, shelter, etc).
This is true. Today it’s hard for low-income people to earn a living wage at low-income jobs. The diagnosis is correct. The proposed solutions are not. The solutions to this problem usually presented are:
1. For government to increase the amount of free money it takes from the upper and middle classes and redistributes to the poor (both the Can’t poor and the Won’t poor), via welfare, food stamps, subsidized housing, and other systems, otherwise known as “income redistribution.”
2. For government to force business owners at gunpoint to pay low-wage workers more money for no reason, otherwise known as “minimum wage.”
The problem is these two “solutions” are attacking the symptoms and not the cause. In part one I already showed the facts clearly indicating that throwing more money at the poor won’t solve the problem. Moreover, I have already discussed why minimum wage isn’t a solution either. Even if it was, it’s not solving the real problem.
WHY is it harder for low-income people to earn a living wage these days? Is it because businesses are paying their employees less? Or is it because our basic necessities like food and shelter have become more expensive in real dollars?
The answer is the latter. Because of massive increases in government taxation and inflation (caused by titanic money printing since 1971 when the insane Richard Nixon destroyed Bretton Woods), everything we need to survive, like food, housing, medical care, schooling, and transportation has become much more expensive in real (non-inflationary) dollars.
This means that back in the 1960s, a low-income poor person working full time at what was then a minimum wage equivalent job was able to support himself with no major problems. He didn’t live in luxury of course, and he was still poor, but he was able to pay rent, buy food, clothing, transportation, healthcare, and perhaps even support a child or two.
Today, thanks to sky-high taxes and compounded inflation over several decades (both caused by government, mind you), he’s no longer able to do that. His basic living expenses are now too expensive to purchase on a low-paying job. As hard as this is to hear, and as weird as it sounds, big government has kicked poor people’s asses.
Shoving more money at this guy via welfare, or forcing this guy’s boss to pay him more money doesn’t solve the problem at all. (As a matter of fact, it actually makes the problem worse, for several reasons I’ll have to explain some other time.) It simply perpetuates the problem forever, if not making it worse.
The solution to the living wage problem is to simply undo what the government has done since the early 70s. This means:
1. Drastically slash all types of taxes, at least on the poor and middle classes.
2. Stop printing all this damn money. All it does is bloat government and help the super-rich.
If government does both of those things, then eventually and miraculously the working poor will be able to afford all the necessities they used to be able to afford back in the 1960s.
Think about it. If that working poor person lived in a country with zero percent income tax, zero percent payroll tax, zero or near-zero percent sales taxes, near-zero corporate taxes (which means companies didn’t have to increase the prices on their products so that he would have to pay them as a customer), and had a zero percent inflation rate where things were as cheap as they were in the 60s, he would have no problem paying his bills if he was making $8 an hour (or even less!). Again, he would still be poor, but he wouldn’t require welfare, food stamps, or wage controls to live.
So many problems created by government would simply vanish if you simply un-do what government did to cause the problem in the first place. You don’t need new laws and new systems. You need to repeal old laws and old systems. I’ve already discussed this in the context of healthcare, but it applies to just about everything else the government has messed up. Asking for more government laws or systems to fix the problems created by government laws and systems means you will simply have the same problems in society forever. Nothing will ever get fixed. Instead, everything will get worse and worse until the government goes bankrupt (which all governments that have done this eventually do).
I will discuss some more specific solutions in the next part of this post.