How To Handle The Poor - Part 2 - Caleb Jones

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.

4 Comments on “How To Handle The Poor – Part 2

  1. The problem with anti-inflationary monetary policy is that it increases imports and decreases exports (since foreign goods become less expensive relative to domestic good). So while it would make it cheaper to buy goods and services, it would hurt US companies by restricting how much product they are able to sell, which means fewer jobs.

  2. Then how do you explain the massive boom of the 1950s-60s? We were under Bretton Woods and weren’t printing trillions, and we had the biggest and longest boom in American history.

    And to be clear, I’m not saying never print any money ever. I’m saying we’re doing it way, way, WAY too much, to the point where it’s very harmful unless you’re one of the super rich.

  3. 2. For government to force business owners at gunpoint to pay low-wage workers more money for no reason, otherwise known as “minimum wage.”

    you say no reason, but statistically, productivity has increased SUBSTANTIALLY, so thus your workers are making you more money than ever before by working harder than ever before, yet there is no reward for their loyalty. i dont know if you are truly an honest rational intellectual person, but im willing to chance the discussion to test it. I work for a retailer, a large corporate retailer. With the territory comes forecasts for our sales. those forecasts each year continue to grow despite any market fluctuations, as these are not included in any calculations. Even during time of economic downturn we defeat those forecasts by 15% on average annually.(the increase that is forecasted was already about 10-15% of the previous year on average)so that means on a good year, we improve ourselves by 30% annually. at 14.50 an hour, do you know what raise they offered me? 0.15 an hour increase. I personally earn 2 mil + annually for my company and i take pride in doing it, and i come in every day with a positive attitude and give 150%, as an individual salesperson i am expected to earn about 300.00 an hour for my company otherwise i face possible disciplinary action. each year that hourly earnings expectation grows. and i will add that i crush that goal each week(i happen to be the top salesman in our branch, second to NONE)so you honestly believe our demand for better pay is for “no reason”? my raise was 1% of my total income, yet i earned them 30% over the previous year. i am NOT proposing that ceo’s and corporations be forced to give up the farm, but tie raises to actual productivity. The only option a worker has in this current system is to quit a job like this… but then you will all just label him a lazy person who doesnt want to work for a living, but i say, i work HARD to still not make a living. My boss got a HUGE bonus because we crushed the sales goals. he hasnt been on the sales floor in 4 months, and he came through to complain about a sticker that some customer’s kid left on a product. since our system is based on the honor system for what employees get paid and what raises are given, they need to honor that system, if they cannot, then it is up to the government to restore balance. How does my situation jive with your comments?

  4. productivity has increased SUBSTANTIALLY, so thus your workers are making you more money than ever before by working harder than ever before

    Productivity has increased because of technology, not because workers are working harder. The minimum wage worker in an air-conditioned cubicle or behind the counter at a McDonalds isn’t working hard at all compared to the 1910s factory worker.

    so that means on a good year, we improve ourselves by 30% annually. at 14.50 an hour, do you know what raise they offered me? 0.15 an hour increase. I personally earn 2 mil + annually for my company and i take pride in doing it, and i come in every day with a positive attitude and give 150%, as an individual salesperson i am expected to earn about 300.00 an hour for my company otherwise i face possible disciplinary action. each year that hourly earnings expectation grows.

    Then your company is treating you like shit and ripping you off, and you need to quit and find a better job.

    Some companies suck. Some are great. Some are so-so. None of this means the government needs to put a gun to the head of every business owner in America and force them to pay them a certain wage.

    so you honestly believe our demand for better pay is for “no reason”?

    No. Obviously I wasn’t talking about your individual circumstances.

    I’m talking about a know-nothing government bureaucrat who’s never run a business in his life walking into a company, putting a gun to the head of the owner, and saying, “I think all of your workers need to be paid X! Now fucking pay them that or you go to jail!” He’s enforcing completely arbitrary wage controls for absolutely no reason.

    The only option a worker has in this current system is to quit a job like this

    Correct. They’re ripping you off. Get the hell out of there and go work for someone who will pay you what you’re worth.

    but then you will all just label him a lazy person who doesnt want to work for a living

    No I won’t! A guy who quits and gets a better job I will label a very smart and able go-getter. Before I started my own business I quit my jobs all the time, constantly getting better ones. It’s the best way to increase your income as an employee.

    Now if you quit and then sit on your ass for a year and live on food stamps and unemployment, THEN YES, I will call you a lazy bastard. But that’s not what I’m recommending.

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