Nevada Jobs and Corporate Welfare Part 2

NV low income jobs fam 4The list in the chart above shows jobs in Nevada which are projected to have 5,000 or more persons employed as of 2020, and the average wages assuming full time employment at 40 hours per week for 50 weeks per year.   All information comes from Nevada’s DETR.

One other assumption is that the family of four includes a head of household wage earner, and three dependents.  The optimists among us may assume that if there are two wage earners the family will avoid being eligible for SNAP (pdf) and other benefits.  However, this rosy view doesn’t take into consideration the possibility of a single parent family.  Nor, does it assume the “pro-family” ideal of the male head of household being able to support his family on the proceeds of a single job.   In short, of the common jobs available — or projected to be available by 2020, ten of the categories show average wages which are insufficient to keep an average family of two adults and two children above the income level at which they would be eligible for SNAP benefits.

One glance at the chart should demonstrate why there is conversation about increasing the minimum wage to $15.00.  Notice that those occupations in which individuals can earn $15.00 or more per hour don’t fall into the generalized category as eligible for SNAP (food stamp) benefits.

Obviously, there are two ways to cut the SNAP benefit rolls.  The first is simply to slash the funding, raise the requirements, and tell potential and current beneficiaries to wing it as best they can.  Ideologues may cheer the removal of government support which in turn should induce the “Lazy and Shiftless” to take on more work and seek “economic freedom” from “government intrusion.”   However, as evident in the chart, a single income from a low wage job is insufficient to put food on the table for an average family at present.  Two low income jobs (fast food work, stocking shelves, etc.) may serve to maintain minimal living standards — are the Ideologues recommending three or more jobs?  At this point we’re perilously close to Janis Joplin’s rendition of the lyrics “Freedom’s just another word for nothing left to lose.”

The second option is to raise the minimum wage to $15.00.   There’s an economic benefit to this: “Economists generally recognize that low-wage workers are more likely than any other income group to spend any extra earnings immediately on previously unaffordable basic needs or services.” [EPI]

The economics of this are simple — as lower income families spend more for goods and services previously unattainable the DEMAND for those goods and service increases. The greater the aggregate demand, the more hiring to satisfy that demand — remembering the First Rule of Human Resources: The only reason to hire additional personnel is because  staffing is inadequate to satisfy current demand with an acceptable level of customer service.

Even the Chicago Federal Reserve offers modest applause for this thinking: “We are skeptical that minimum wage hikes boost GDP in the long run,” Aaronson and French wrote. “Nevertheless, we do find evidence that putting money into the hands of consumers, especially low-wage consumers, leads to predictable increases in spending in the short run.”  In fact, an increase in the minimum wage to $9.00 was projected to add an overall 0.3% increase in the GDP. [MMA]  In short, we can see some economic growth by raising the minimum wage, or we can continue to offer public assistance to the employees of highly profitable corporations so that their “shareholder value” (bottom lines) are at record levels.

“New research shows more than half of low-wage workers at fast-food restaurants rely on public assistance to survive – a rate double that of the overall workforce. According to researchers at the University of California, Berkeley, low wages in the fast-food industry cost American taxpayers nearly $7 billion every year – that’s more than the entire annual budget of the Centers for Disease Control and Prevention. A companion report by the National Employment Law Project found McDonald’s alone costs Americans $1.2 billion annually by paying its workers insufficient wages. Last year the top 10 largest fast-food companies alone made more than $7.4 billion in profits.”  [DN]

Then there are the landscapers, the stock clerks, the dishwashers, the customer service clerks, the security guards, and the retail sales clerks.  A 2009 ASPE study tells us a bit more about these people.   As of 2001, approximately 58.9% were female, only 17.3% of all low wage workers were under 20 years old, and 64% were White.  Only 14.4% were divorced or separated, 39.1% were married, 46.5% had never married. {Exh.2}

The bottom line concerns the bottom line.  If free market capitalism is the way we are supposed to be conducting business, then public assistance subsidies would be unnecessary IF the private sector paid wages which enabled the generation of sufficient aggregate demand to grow the economy.

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