Senator Bernie Sanders (Ind. – Vt.) wants to tax corporations (more than 500 employees) 100% for each employee who works at the company but receives any low-income government benefit: section 8 housing, food stamps, Medicaid, children in school lunch program, etc.
At first this seems entirely reasonable. Sanders says that because the company is not paying the employee a high enough wage, taxpayers have to supplement this low wage to allow the person (or household) to stay above the poverty level.
But because most socialists are economic illiterates or poisoned by their own ideological beliefs, they can’t grasp how such proposals work in real life with real human behavior.
First of all most Americans would agree that (1) self-sufficiency is a good thing and (2) that the path to self-sufficiency is to have a job. But to get a job, the person must provide the employer with greater value than what the employer will have to pay in compensation. Any company that adds a job and hurts itself financially won’t be around very long.
This means that the most impoverished person, the individual who is receiving the greatest number of low-income programs would now, under the Sanders’ plan, be the most expensive person for the employer to hire. His or her cost to the employer would not only be the compensation paid, but would include 100% of every government benefit that person continues to receive.
Consider that about half of minimum wage workers are in households that earn three times the national poverty level. It means that these low-wage jobs are not the primary job for the household but a supplemental one. Additionally, about one-third of minimum wage jobs are filled by students who mostly reside in households considerably above the national median income.
So for the person who is in the greatest need of employment, he or she would easily be the most expensive to the employer and hence, the least likely to acquire the job.
Sanders’ bill acknowledges this problem somewhat by prohibiting the employer from inquiring about the applicant’s welfare status. But it doesn’t take a rocket scientist to determine if the prospective employee hired, say, for the Christmas season by a retailer is a 25-year-old single mother — or a prosperous looking 50-year-old, recent empty-nester woman or even a 20-year-old college sophomore looking for supplemental income.
This bill is typical of “social justice” warriors who want to dictate to others how they must live their lives. They have to interject themselves into what should be a private and voluntary agreement: between one willing to offer their services for payment and the one willing to pay them for that offered service. The government has no place to involve itself in this voluntary agreement between the two.
[This person on welfare is already less attractive simply because many on government will limit their hours or income level because their benefits get cut dramatically at certain income levels making that one additional dollar earned actually negative compensation to them because a substantial benefit was eliminated. But this is another post for another day.]
