It seems like these activist and misguided politicians are bound to repeat the mistakes of presidents Nixon and Johnson. Any workable solution would have to be specific and comprehensive. We have groups who are prepared to discuss flaws within the system and others who are prepared to discuss flaws within the black community but few who will address both.
The lack of personal responsibility, poor education, disproportionate single-parent households, job skills, and increasing government dependency has as much to do with the state of Black America as racism does. Anywhere there is racial inequality we should fight it, but unless we’re willing to address all of the causes, we will be stuck in a perpetual civil rights movement.
• 4 •
Income Inequality
Hip hip hooray, unemployment is down. What does that mean to me in my life?
— Nancy Pelosi
While race is obviously the most emotionally charged and important of all of the inequality categories, income is the most talked about and the most universal. It makes sense. Regardless of your race, gender, sexual orientation, or religion, no one is exempt from economic risks. It is also the most subjective of all of the inequality concerns. The best way to address it is to determine if it is a problem that has reached a crisis point and to decide what role the government should play in solving the problem.
When looking at income statistics, everything is relative. In the US, people argue that the median income is not a fair wage, but most of the world lives on a fraction of that income. If you mention this as an example, you will likely hear that it is unfair to compare the US to other countries, this is the epitome of hypocrisy.
The Left is always suggesting that the US operate more like other countries. We need to impose Switzerland’s healthcare system, Australia’s gun control policies, and the Netherland’s price reforms. Venezuela was often touted as an exemplar of what America should be (prior to its recent collapse). The approach the Left routinely takes when judging the US is to point out the negative and ignore the good.
The problem with this is that it creates an illusion that we are in a desperate state. This is far from reality. Even if we concede that the US lags behind the countries mentioned above in some areas, the reality is more nuanced than they make it out to be. It does not mean that we lag behind these countries overall.
Take murder for instance. Homicide in America is a problem and needs to be addressed, but if you believed the mainstream media, we are the murder capital of the world. They constantly run stories stating, “Among developed nations, the US is far and away the most homicidal.” They openly wonder why we’re so much worse than the rest of the world. But the actual stats tell a different story. In 2017, the US was the 38th most violent country and of the 50 cities with the most homicides in the world, only Baltimore, New Orleans, and Detroit made the list, with none in the top 20.132 With the dramatic increase of violent crime in Germany, Sweden, and the United Kingdom (London surpassed NYC for the first time), we may be falling further on that list. This illustrates that the US is far from the death trap those on the left make it out to be.
A clearer analysis, like the one above, can be done in every area, but when one takes the stance that things are bad, only data which supports that belief will be considered. This is how the Left approaches income disparities. One has to be capable of pointing out areas of improvement while still acknowledging that our poor live far better than the poor in most of the world.
In any conversation about income equality, the discussion should also include those with the greatest need. We have a large number of chronically unemployed and homeless people in the US. For such a rich nation, this should be a major concern. Most will agree that we have an obligation to help those in need. The difficulty lies in two areas: how we determine the threshold for need, and who renders the help.
The Left is confused about how this is addressed from a conservative point of view. It is often said that conservatives don’t care about the poor or are unwilling to help others. They offer as proof the Republicans’ call for welfare reform. Cutting social welfare programs that help the poor would make it more difficult for them to survive, they argue. They fail to realize that the objection to these programs is the rampant fraud and the fact that they do not work.
Even if operating as intended, these social programs are largely ineffective as they focus primarily on survival. This gives those in need little assistance and does nothing to help their future. Conservatives want the focus to be on independence. They want to move people from their current position to a higher economic bracket. The programs, as they currently operate, do nothing to encourage this. In some ways, people are incentivized to remain stagnant.
The number of people who receive help is also limited. These programs have eligibility requirements. No matter what formula is used to determine this, there will always be people left out who could use assistance. Also, people have situations arise that are out of their control, like a sudden decrease in hours, a medical emergency, or job loss. There needs to be a place for people to go to get short term assistance or services tailored to their specific needs.
Once it’s determined what help is needed, the next step is to decide who administers it. This is where the differences are magnified. Progressives want the help to come from the government. They believe there should be a government safety net for everyone who needs it. Conservatives also believe the government should help, but it should be the last resort, not the first stop.
There should be fluid levels of assistance that people go to when in need. It should always start with family. They are the people closest to you with the greatest vested interest in your well-being. Of the people living in Section 8 housing or collecting welfare benefits, there has to be a sizable percentage with family who could give them aide. Why should the government subsidize a single mother and her child when she has a successful sibling nearby living alone in a two-bedroom apartment?
If there is no family around or they are unable or unwilling to assist, the person in need should try the greater community. They should seek assistance from extended family, friends, neighbors, church parishioners, and other members of the neighborhood. This is how much of the world gets by and how America supported the poor for over 200 years.
The next level of assistance should be organized charities. Shelters, soup kitchens, church programs, and other area organizations should be consulted. America is the most charitable country the world has ever known. We give billions to countless charities and when disaster strikes, here or abroad, we dig deeper. This spirit of charity is different in America, but most of us take it for granted.
We’ve all seen the turmoil Venezuela is going through. The economy has collapsed, the streets are dangers, and medical assistance is abysmal. Fabiola Zerpa has been writing articles about what he sees day-to-day in Venezuela. In an article about how bartering has become the new form of business transactions now that the currency has failed, he made an interesting observation, “Charity is also something new. I didn’t grow up with the traditions of canned-food drives and volunteerism that are common in the US.”133
This type of thinking is deemed evil on the left. They believe those in need are entitled to assistance and many Americans who struggle with poverty are increasingly subject to feel the same way. Religious adherents on the left strangely resist this approach as well. They say that, as believers, we have an obligation to help. I, and most conservatives, agree completely. This is why we donate so much. I contend that they are confused about who the Word is saying should give aide to the poor.
When the government gives aide, this has nothing to do with our obligation to give. We pay taxes and the government does as it pleases. We do not get the blame or credit for how they spend those funds. Our charity must be by choice. When America gives humanitarian aid to a foreign country, the citizens don’t get to claim a percentage as charitable giving. The same goes for the Bible’s calls to help the poor. We
are to help, independent of government deeds.
It also takes a great level of hubris to proclaim you will defeat poverty. Everyone agrees that those in need deserve our compassion and assistance, but the social engineers on the left think they can end poverty. To the Christians on the left, when Jesus said ‘The poor you will always have with you’ do you think he was wrong?
The bottom line is that assistance should flow from family to community to charities. Only after all of these have been exhausted and assistance is still needed should one go to the government for assistance. People underestimate the importance of non-governmental help. While I take issue with the lack of competence and speed in which the government administers its assistance, there is a much bigger problem.
Earlier, we discussed people falling through the cracks because they don’t meet government eligibility requirements. For many, assistance at this crucial point could be the difference between holding on and falling into despair. The current system forces them to fall into despair in order to receive assistance. This assistance, in most cases, will not be commensurate with what they will need if they are allowed to fall that low. At this point, they will have a much more difficult time getting back to where they were.
For example, take a family of three with a household income of $75,000, above the national average. They own a home, a car, and have a child in daycare. Let’s say they experience a job loss and the household income drops to $40,000. Few can absorb a 47% drop in income. They would try to cut out extras, but at such a drastic decrease, they will miss payments. Late notices will hurt their credit rating and some of the funds they saved by cutting back will go to the cost of finding a job. Most of us would agree that it is important to help this family before they lose their house or car rather than after they hit rock bottom. Government assistance for a family of this size carries a maximum income of around $27,000. They would not qualify. Fortunately, there are no guidelines for help from family and community and few from charities.
As with most things, good intentions have gotten in the way. The most effective approach would never be considered because it doesn’t play well to the crowd guided by emotion. Instead of sporadic help that exacerbates the problem, the government should deal with crisis management and move on. Some have tried, but most fail because they only address one side of the problem.
Seattle has an increasing homelessness problem and the local politicians came up with a plan to combat it. In May of 2018, the Seattle City Council unanimously passed a ‘head tax.’ This tax will implement a $275 per employee fee, a compromise from the proposed $500, on businesses with gross revenues greater than $20 million per year. The funds are slated to build affordable housing and emergency homeless services.134 The plan has a math problem.
Say, for instance, a company with $20 million in revenues and 1,000 employees has $2 million in EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This is not rare, as many industries have an average profit margin that is less than 10%. The head tax for this company would be $1.1 million. In this case, the company would pay nearly 30% of its profit in additional taxes. This also makes it punitive to hire more employees.
No responsible businessman would pay this without making operational changes. Whether it’s cutting staff to save money, passing the costs on to the consumer through increased prices or, in extreme cases, moving out of the city or closing the business; businesses will adjust. As with so many other government programs, the head tax will leave a host of negative unintended consequences in its wake.
In addition to being unfair, this plan does nothing to address the root causes of the problem. This is common, the Left throws money at a problem and walks away. A Chicago alderman has another seemingly unproductive plan. Ameya Pawar has proposed a universal basic income program. It would provide 1,000 families with a $500 monthly stipend—no strings attached.135
Pawar’s plan is silly. Giving people money with no strings attached will hurt more than help. However, I am not opposed to government funded homeless shelters or other assistance for the indigent. The problem with Seattle’s plan is the implementation of an unfair new tax and the lack of a detailed plan for the money’s use. You may be wondering where I would get the funds to assist the homeless population without increasing taxes.
The proper way to do this is to take the funds from existing appropriations. We’d start by cutting other forms of welfare. There’s nothing immoral about putting the needy behind the destitute. Homelessness is a human rights problem, a health problem, a sanitation problem and a moral problem. It’s like triage, you help those with the most immediate need first.
This is not to say we should ignore those who fall through the cracks. There will no doubt be some who are not in dire need yet or are struggling and don’t have family or friends to help. In these situations, the government can still offer assistance but in a far more ‘hands off’ way. In most of these cases, it involves a temporary situation like job loss or a medical bill. The person needs money for a few weeks or months to get by. Why not offer low interest loans with limited backing from the government? Obviously, some may default on the loans. But many would pay the loans back, drastically reducing the net amount spent on assistance. More importantly, it would encourage work ethic. The current system leads people to believe they are entitled. When you foster that belief, it calcifies.
When the social security act was enacted in 1936, eligibility began at the age of 65. However, the average life expectancy for men was 59. Life expectancy for women was 65 but most women were not eligible, nor were blacks. It’s obvious that people were never intended to receive benefits. The few who did make it to 65 were expected to die after a few months. It wasn’t retirement; it was insurance. Now people count on it to live out their days.
Selfishness affects the approach to these programs. If a politician suggests raising the retirement age, he risks being voted out of office. Whenever Congress adds a work requirement to receiving welfare benefits, they are met with opposition. Forcing someone to work for their benefits is cruel, some say. They even changed the terminology from welfare to entitlement. This is why loans are good. It doesn’t just state that the money is to be paid back, it eliminates any belief that you’re entitled to it.
Up to now, the discussion has been about the homeless and those in need of assistance. While those are major problems that need unique solutions, most of the SJWs would say that their fight is against income inequality. To that end, let’s take a look at income inequality and see how, like every other argument they make, their logic is flawed, they’re ignoring the obvious or they’re lying to advance an agenda that’s destined to fail.
One method they use to achieve equality is a minimum wage hike. For nearly a decade the Fight for 15 group has been advocating a $15 minimum wage. They have organized protests, many of which have been directed at fast-food and retail giants, McDonald’s and Wal-Mart. They are making a mistake pretending that every employer is as large as McDonald’s and Wal-Mart, but they also show that they don’t understand how businesses work.
Let’s examine McDonald’s. Let assume starting pay of $8 per hour with most making between $8 and $10 per hour their first year. They then have hourly supervisor positions that pay between $12 and $15 per hour; assistant managers who make around $35,000 and store managers who make $60,000. Now, if the starting pay went to $15 tomorrow, they’d have to pay employees who have experience more than entry-level employees, it is only fair. Let’s give them $17. Now they make more than their supervisors so they’d be in line for a raise to say, $20. That’s an annual salary of nearly $42,000. Assistant managers, in turn, would go to $50,000 and store managers $65,000.
When you tell the SJWs few businesses can absorb these enormous costs, they just shrug and say, “They have the money.” This shouldn’t determine if it’s right to raise wages, but it is most likely untrue. Here’s a quick explanation of profits to benefit the SJWs.
Ma
ny businesses operate with thin margins. Those in the service industry, industries more likely to employ low-skilled workers, rank among the lowest profit margins. The average profit margin for a grocery store, for example, is 2.5%. Restaurants and retail profits vary widely, generally 10–25%, based on whether they are high-end or value brands. Let’s look at Wal-Mart, since McDonald’s has so much tied up in real estate and the added complication of franchise revenue.
Wal-Mart has a profit margin of 8%, not a lot of money relative to their revenue. $15 an hour is a 61% increase for the average employee.136 If we did the same for Wal-Mart as we did in the above McDonald’s example, the additional labor costs would be 134% of their total profit.
Regardless of size, no business could afford giving their entire staff a raise all at once. Many would shut their doors. Those who don’t close, will drastically raise their prices. This is what happens when you set wages based on employee needs rather than what the employer can pay.
The Left’s biggest argument isn’t about the level of any individual salaries. It is their belief that the gap between the wealthiest individuals and those at the bottom of the economic wrung is unfair. They lament the fact that some have billions while others work for low hourly wages. I call this the 3E syndrome. It is a bad combination of envy, emotion, and poor understanding of economics. They like to say that capitalism only helps the 1%. This is not true, but even if it was, capitalists should reply, socialism helps 0%. Which is better?
First, they act as if there is a finite amount of money. This argument implies that in order for Jeff Bezos to be the richest man in the world, someone else has to give up something. There is no logical basis for this. I liken their beliefs on income to President Trump’s view on international trade deficits. Trump is correct in addressing countries, particularly China, who don’t hold up their end of trade agreements. Currency manipulation and theft of intellectual property are serious offenses and he is to right attack. But it’s his concern over the imbalance of trade that is no different than the Left’s concern for income inequality.
We Want Equality Page 9