Tag Archives: Poverty

Minimum Wage VI: Subsidizing

McDonalds-Brentwood

McDonalds-Brentwood (Photo credit: Wikipedia)

One common way to argue against not raising (or even just eliminating) the minimum wage is to build a case based on claims about those who work such jobs. For example, one approach is to argue that the people on minimum wage are mainly high school and college kids who are just earning spending money. As another example, it is often claimed that minimum wage jobs are temporary jobs for most workers—they will spend a little while at minimum wage and move up to better pay. While these claims are true in some cases, the reality is rather different in general. For example, the average age of fast food workers is almost thirty—they are not just school kids. Also, a significant number of people get stuck in minimum wage jobs because there is nothing else available.

As an aside, even if it were true that all those working such jobs were just earning spending money or were going to move on up, it would not follow that the minimum wage should be lower or eliminated. After all, the fairness of a wage is distinct from the motive of the person working for the job or what they might be doing next. For example, if I am selling my books to get money to buy running shoes rather than on survival necessities, it would seem odd to claim that I am thus obligated to lower my prices. Likewise, even if a kid is earning money to spend on video games rather than for putting food on the table, it would seem odd to say that she is thus entitled to less pay for the work she does.

Getting back to the main focus of this essay, the reality is that many of the folks who work minimum wage jobs are working the jobs primarily to pay for necessities and that many of them are stuck in such jobs (in large part to the current economic situation).  The reality also is that a minimum wage job will typically not provide adequate income to pay for the necessities. Interestingly, some corporations recognize this. McDonald’s, for example, generated a brief bit of controversy with its helpful guide for employees: the corporation advised employees in minimum wage jobs to have another job.

Given the gap between the actual cost of living and the pay of a minimum wage job, it is not surprising that quite a few of the folks who work for minimum wage avail themselves of state support programs, such as food stamps (which now goes by other names) and Medicaid. After all, they cannot earn enough to pay for necessities and certainly prefer not to starve or end up on the streets (although some are malnourished and struggling with housing). While one narrative about such people is that they are living easy on federal support, the reality is rather different—most especially for the working poor who have families, for those who are endeavoring to attend college or who hope to start a business.

Obviously enough, one large source for the funds for these programs is the taxpayer. That is, those who pay taxes are helping to subsidize those who received state support while working minimum wage jobs. However, there seems to be another equally plausible way of looking at the matter: the taxpayers are subsidizing those who pay minimum wage to their employees. That is, these employers can pay their employees less than what they need to survive because other people pick up the tab for this, thus allowing the employers to increase profits. If this is correct, those of us who pay taxes are involved in corporate socialism.

It could be countered that the taxpayers are not subsidizing the employers, such as McDonald’s. After all, the money for Medicaid and such are not going to the corporation, but to the workers. The obvious counter is that while this is technically true, the taxpayers are still contributing to sustaining the work forces for these employers, thus subsidizing them and allowing them to page sub-survival wages.

It could also be contended that the employer has no obligation to pay workers enough to survive on without the addition of state support. After all, there are plenty of poor people and if some cannot survive on minimum wage, then economic selection will weed them out so that those who can survive on less will take their place in the economic ecosystem. This, of course, seems rather harsh and morally dubious, at best.

Another counter is that the poor are to blame for their wages. If they had better skills, more talent, better connections and so on, then they would not be receiving that minimum wage but a better salary. As such, while it might be unfortunate that the poor are so badly paid, it is their own fault and hence their employers owe them nothing more. If the state wishes to help them out, that is hardly subsidizing the companies—they would, or so they might say, pay more for a better class of worker.

This has, obviously enough, all the moral appeal of a robber saying that it is the fault of her victims that they were not able to resist her crimes.

Overall, it does appear to be clear that the taxpayers are helping to subsidize those on minimum wage. While we could decide to let the poor slip deeper into poverty that would seem to be a wicked thing to do. It does seem to be reasonable to shift more of the cost to the employers who benefit from the work of the employees. After all, many corporations that are based on minimum wage workers have been making excellent profits—at the expense of the workers and the tax-payers.

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The Income You Deserve

I Get Money

I Get Money (Photo credit: Wikipedia)

In the previous essay, I wrote about the notion of a person having the body he deserves. In response to this T.J. Babson inquired about replacing “body” with “income.” As such, the question raised is whether or not a person has the income he deserves.

In the case of whether or not a person has the body he deserves, I argued that this is generally the case. After all, laying aside unfortunate accidents and illnesses, a person has (or is) the body that he has earned by his choices and actions. I also noted that the luck (good or bad) of birth can also be factored out in terms of what a person has earned-after all, a person would still get what he has earned given his circumstances.

Naturally, it can be contended that the same would hold true when it comes to income. After all, if unfortunate accidents are laid aside and the luck of birth is factored out, then a person surely gets the income that he deserves. After all, a person gets the income he has via his choices and actions, just as is the case with getting the body he has (or is). Thus, we all make what we deserve.

Or so it could be argued. However, there is the obvious question of whether the two situations are analogous. That is, whether the matter of deserved income is adequately similar to that of having the body one deserves.

One obvious difference is the nature of the how earning works in regards to the body and income. In the case of the body, getting the body one earns is a purely mechanical, objective and automatic matter. For example, if I choose to take in more calories than I burn, then I will start storing fat, thus altering my body in a way that I have clearly earned. As another example, if I do more speed work on the track, this will alter my body in ways that result in greater speed when running. As a third example, if I do more pushups and pull-ups, the strength of my body will increase. I get these results based entirely on what I do and they correspond perfectly to my actions and choices. As such, these results seem to be exactly what I deserve. After all, what I get stems from what I do.

In the case of income, getting what one earns is a matter of human decisions, is subjective and is not automatic. For example, my income is based largely on what other people who control the funds elect to pay me based on what they think I should be pay. This is presumably based on a subjective assessment of what I should be paid—most likely based on such factors as what they think is the lowest amount that will keep me from accepting another job and what they think it would cost to replace me with someone that could do what I do. My income is also not an automatic matter—I would not get an income just for teaching and so on. There has to be the conscious decision to provide me with the income. In the case of income, what I get might have little or even no connection to what I actually do. Thus a person might not get the income that he deserves.

A second obvious difference is that what a person gets in regards to his body is always perfectly proportional to his choices and actions. If I run X miles per week at an average pace of P, then my endurance will be E. If I spent H hours strength training at intensity I per week, then my strength will be S.  Or, if I pack in E extra calories, then I get F fatter. As such, what I get from my choices and efforts is exactly proportional to the nature of my efforts and choices: what I do and what I receive are in perfect harmony.

In stark contrast, what a person earns in terms of income can (and often is) significantly out of proportion to the nature of her efforts and choices. For example, a professor might devote considerable effort to teaching her students and be very effective at this, thus creating educated citizens who go on to add considerably to society. This teacher might receive a rather low income. As another example, a professor might be clever at making connections and hit an academic fad at the right time and become a star. This star might spend his career pontificating at conferences and on talk shows, yet contribute little of lasting value to society all the while enjoying a rather nice income. As a third example, a person might develop a cunning way to create a financial instrument to hide toxic assets and engage in clever deceits when ranking said instruments, thus making a fortune for herself while contributing to a massive recession. In such cases, these people would not seem to be getting the income they deserve.

It could be countered that a person does get the income he deserves by definition. That is, one earns what one gets, thus it is earned. Being what is earned, it is what a person deserves. This is, obviously enough, what philosophers are often accused of: mere semantic trickery.

Also, to use the obvious analogy, this would be rather like claiming that a prisoner deserves her sentence on the grounds that it is the sentence she was given and it is thus just. Obviously, the mere fact that a person has been sentenced to a certain punishment or has received a certain income is not proof that either is earned.

It could also be argued that employers decide what a person deserves and that a person can decide if he agrees. If he agrees and accepts the income, then he gets what he deserves. While this has a certain appeal, it assumes that the person is not tricked by fraud or compelled to accept the income. To use an analogy, if I agree to give a person something based on a lie or because he points a gun at me, I do not thus get what I deserve when I lose my property.

In some cases, people do get to select their income without any fraud or compulsion and they have many opportunities available to them. In most other cases, people are at a considerable disadvantage relative to those who offer income. For example, a person who works for the state is often subject to the whims of those above them in power. If a newly appointed director decides that he would prefer to relocate his department in a city near his second or third house then the employees have to choose between uprooting their lives (and often families) and losing their jobs. If they lose their jobs, then they need to find another employer and hope that their new job will last.

It might be replied that people get what they deserve even in these cases. After all, if they were smart enough to see through the fraud or capable enough to avoid being compelled, then they would have a better income.

While this has a certain appeal when it comes to economic matters and matches the ideal of the rugged individual making her fortune, this would require accepting that a person who is deceived by another is responsible for his failure to detect the deceit and that anyone who is compelled deserves the results of that compulsion. To use an unpleasant analogy, this would be rather like blaming the victim of a date rape for being raped. After all, if she had been smart enough to see through his deceit to his true intentions or strong enough to protect herself, then she would not have been raped. As such, if she is raped, then she would have gotten exactly what she deserved. Likewise, if someone was smart enough to avoid deceit or strong enough to avoid being compelled economically, then she would not have a low income.  After all, she should have been able to command a better income or start her own company. As such, if she does have a low income, she must be getting exactly what she deserves.

As such, while each person generally has the body he deserves, the same does not hold for income.

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Soon-to-Haves

 

White House Portrait of

Image via Wikipedia

 

I am working on a book on rhetoric and, as might be imagined, this year’s American political season has been a goldmine. Recently Mitch Daniels said “We do not accept that ours will ever be a nation of haves and have nots; we must always be a nation of haves and soon to haves.”

The phrase “soon to haves” is an excellent example of a euphemism (a more pleasant or appealing phrase or word substituted for one that is negative or likely to be offensive to the audience).  While euphemisms are a stock tool in politics, it is always fair to critically examine their usage to see what sort of reality they might be employed to hide or soften. As such, I will take a short look at this phrase.

Daniels, obviously enough, makes it quite clear that his euphemism is a substitute for “have-nots” (which can itself be seen as something of a euphemism for the term “poor”). “Soon to haves” is clearly a more pleasant phrase than “have nots.” After all, the have-nots are lacking and there is no implication of hope. In fact, the usual way of things is that “whoever has will be given more; whoever does not have, even what he has will be taken from him.” In the case of “soon to haves” this not only makes it clear that these folks will be haves but that this having shall come soon. One rather obvious point of concern is whether or not this euphemism matches the reality it is alleged to describe.

On the one hand, the United States (and other countries of the world) does have upward mobility. I am better off than my grandparents on my father’s side (they both had to quit school before the ninth grade in order to take jobs).  People can, obviously enough, become haves even with a start as a have not. As such, the United States (and all countries) is a land of haves and soon-to-haves.

To use an analogy, in running there are people who win races or place and those that do not. As in general life, the winners are haves and those who do not are have nots. Of course, some people who do not place in this race or that race go on to place in another race. Thus, runners could also be seen as haves and soon-to-haves rather than haves and have nots. Except, of course, the people who might never place. Fortunately, in the case of running, most runners can actually find some race in which to place in. After all, there are lots of races and with some effort and luck one can find such a race. Of course, the running analogy breaks down pretty quickly. After all, while there are plenty of races and running competition is basically fair, the same is not true of the economy. Overall, there is just one race that is going on all the time. Also, the economic race is rather clearly an unfair one. Which brings me to the other hand.

On this other hand, it is rather obvious that even though there are soon-to-haves there are also many people who are and will continue to be have-nots. True, some of these people have not because of their own decisions, choices and actions. However, many of them are in that situation due to factors beyond their power to reasonably control. For example, a leading cause of bankruptcy in America is medical debt incurred by people who find themselves unable to pay those bills (such as when their insurance coverage is exhausted). Other people find themselves in that boat when their employer goes overseas, goes out of business, or gets taken over and gutted for a profit. Some folks find themselves to be have nots when their retirement vanishes due to corporate mismanagement or clever financial manipulation.

It might be replied that even these folks can be considered soon-to-haves. After all, they do have more than nothing and will no doubt get more of something soon. Hence, they are soon-to-haves if not haves.

The obvious reply is that having more than nothing hardly is what is meant by being a have. It is also obvious that being a have is not just a matter of doing okay. After all, being a have is generally taken to mean doing very well-that is, being wealthy or even rich (which are also vague terms). The obvious reality is that the United States and most other countries have very extreme class disparities between the real haves (the top wealthy) and everyone else (the middle class on down). While there is some mobility between the classes, the transition into the dominion of the true haves is very rare indeed. After all, the true haves make up that vaunted 1%, which means that 99% of the people are not haves in that sense.

It might be objected that I have set the bar for being a have too high. What is meant is not that the soon-to-haves will be haves in the sense of being the top haves, but rather that the soon-to-haves will move from less to more (that is, upward mobility). Of course, as noted above, this would require more than going from nothing to something and even more than going from (for example) abject poverty to merely being poor.

Upward mobility does seem to be a real possibility. However, there is an obvious point of concern: if the United States is a nation of haves and soon-to-haves, how is it that there are still soon-to-haves? After all, those soon-to-haves should have become haves…well, soon. Perhaps the soon-to-haves are all new immigrants-having just arrived, they are not haves but are just a short time from being haves. Of course, this does not match the reality: there are plenty of people and families who have been here a long time and are still poor.

Perhaps some of the soon-to-haves are people who were haves. That is, there is a cycle of having and then being a soon to have. Of course, there are plenty of folks and families that were never haves.

Perhaps the soon-to-haves are kids. After all, kids are not haves but they will grow up soon and perhaps they will be the haves. However, many kids grow up in poverty, live in poverty and die in poverty.

As such, it does seem that while there are soon-to-haves, there are still plenty of have-nots.

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Can Everyone be Wealthy?

Emma Goldman

Emma Goldman (the tattoo, not the person)/

It is sometimes asked whether or not everyone can be wealthy. This depends, obviously enough, on what is meant by “wealthy.” Determining what “wealthy” means requires sorting out the nature of wealth.

As might be imagined, there is a fair amount of debate about the true nature of  personal wealth.  While this oversimplifies things, a fairly standard view of wealth is that it consists of the net economic value of a person’s assets minus their liabilities. To be a bit more specific, these assets typically include possessions (cars, guns, art, computers, books, appliances, and so on), monetary resources (cash, for example) and capital resources. Not everyone buys into the stock view, of course. For example, Emma Goldman claimed that “real wealth consists in things of utility and beauty, in things that help to create strong, beautiful bodies and surroundings inspiring to live in. But if man is doomed to wind cotton around a spool, or dig coal, or build roads for thirty years of his life, there can be no talk of wealth.” As another example, some thinkers include non-economic goods (such as knowledge) within the realm of wealth. To keep thing simple and within our current economic system, I will limit the discussion to the “stock” account of wealth (that is, economic assets).

In our current economic system, it is obviously not the case that everyone is wealthy. When this fact is brought up, some folks like to claim that even the poor of today are wealthier than the wealthy of the past. In some ways, this is true. After all, the typically poor person in North America or the United Kingdom has possessions that not even the greatest pharaoh or Caesar possessed (such as a microwave oven). In many other ways, this is not true. After all, a wealthy noble of the past would have land, structures, gold, art, and so on that would make him a wealthy man even today. Also, there is the obvious fact that there are poor people today who are as poor as the poorest people in human history in that they possess just the tatters on their backs and just enough food to not die (at least for the moment). In any case, the fact that the sum total of wealth of humanity is greater now than in the past (even taking into account that there are so many more of us) does not tell us much beyond that (such as whether the current distribution is just or whether we can all be wealthy or not).

Getting back to the main subject, what needs to be determined is what is meant by “wealthy.” As noted above, I am limiting my discussion to economic wealth, but a bit more needs to be said.

In some ways, wealth can be seen as being analogous to height. A person has height if they have any vertical measurement at all. Likewise, a person has wealth if she has any economic assets in excess of her liabilities. This could be as little as a single penny or as much as billions of dollars. Obviously, everyone could (in theory) have wealth, just as everyone can have height. But, of course, a person is not wealthy just because s/he has wealth, no more than a person is tall simply because s/he has height. On the other side, lacking wealth is described as being destitute and lacking height is described as being short.

Continuing the analogy, being wealthy or wealthier  can be seen as analogous to being tall or taller. Being tall means having more height than average  and being taller than another means having more height than that person. Likewise being wealthy would seem to mean having more wealth than average and being wealthier than another means having more wealth than that person. If this view is correct, then we cannot all be wealthy anymore than we can all be tall. Obviously, we could all have the same height or the same wealth, but the terms “tall” and “wealthy” would have no application in these cases. As such, we cannot all be wealthy-if we had the same amount of wealth, then no one would be wealthy.

It could be contended that being wealthy is not a matter of comparison to the wealth of other people, but rather a matter of having economic assets that meet a specified level. Depending on how that level was specified, then everyone could (in theory) be wealthy. Of course, the question of whether or not such a level should be considered wealthy or not would be a matter of debate.

It might be contended that focusing on whether or not everyone can be wealthy is not as important (or interesting) as the question of whether or not everyone can be well-off in the sense of having adequate resources for a healthy and meaningful existence. This is, of course, a subject for another time.

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Sterilizing the Poor

Specially sterilized for you..

Image by ebertek via Flickr

On Wednesday a student in my ethics class asked me whether or not sterilizing the poor would end poverty. Interestingly, I was not asked whether this would be morally acceptable.  I gave a fairly concise answer in class, but thought I would expand on it a bit here.

On the face of it, it does make some sense that preventing the poor from reproducing would reduce poverty. After all, poverty is often an inherited condition and having no (or far fewer) children born to poor people would reduce the number of people inheriting poverty. It could also provide people with yet another incentive to avoid being poor (although it might be wondered whether people need more incentives beyond the existing ones). Also, children are expensive and if the sterilization rules took this into account, people who would become poor because of the cost of raising kids would be prevented from doing so, thus they would not become poor. None of this, obviously, directly addresses the ethics of the matter.

In the course of the discussion, the subject of whether or not poverty has a genetic link was brought up. On the one hand, it was argued that the traits that could incline people to poverty could be linked to various genes and sterilizing the poor would presumably reduced the number of people carrying these genes.  To use an analogy, not allowing blonde haired people to reproduce would certainly reduce the number of blonde haired people in the world. On the other hand, it was also argued that there seems to be little basis for assuming a genetic cause to poverty. If so, sterilization of the poor would not have the effect of a genetic culling of the population that would reduce poverty.

One point that is well worth considering is that poverty is not created by the specific people that happen to be poor (except insofar as they serve in the role of being the poor). Rather, poverty is created by factors (mainly people) in the social system and these factors would be in effect regardless of whether the current poor were sterilized or not. On this view, sterilizing the current poor would merely have the effect of changing, to a degree, the makeup of the next generation of the poor. To use an analogy, sterilizing politicians would not eliminate this social role.  Rather, it would just mean that the people who became politicians would be the children of non-politicians. Given the way the current system works, the children the poor would have had would be replaced in the ranks of the poor by other people-either those citizens who would become poor by the way the economic system works or those who enter the country to do the poverty level work that helps sustain this system.

My considered view is that sterilizing the poor would not eliminate poverty because it fails to address the main causes of poverty, namely the aspects of the economic system that creates and relies on poverty. I do, of course, admit that sterilizing the poor would reduce the number of poor people but this reduction would be at the cost of what certainly appears to be a morally wrong method. It would seem morally preferable to address the other causes of poverty rather than engaging in this sort of economic eugenics (“ecogenics”, perhaps?).

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Bribing the Poor

Esther Duflo at Pop!Tech 2009

Image via Wikipedia

Anya Kamenetz recently wrote an article, “Bribing the Poor”,  about Esther Duflo’s strategy of giving the poor incentives to be immunized. While the article mainly just reported on the practice, it did get me thinking about the ethics of this approach. But before getting to the moral matter, a little background is in order.

In developed countries, about 90% of children receive immunization. This has had a significant impact on the health of the population. In contrast, less-developed countries tend to have far lower immunization rates. For example, India has an overall rate of 44%, but specific areas have rates that drop to 22% or even 2%. While humans can have natural resistance to diseases, the lack of immunization means that people get sick (and sometimes die) needlessly.

Duflo focused on India, and hence the best information is available for that country. Duflo found that there were various obstacles to immunization. The first is that many clinics in the rural area Duflo studied were closed because the government paid nurses did not show up for work. The second is superstition. Many people still believe in supernatural causes of illness and such people will tend to not put much faith in immunization (unless, perhaps, it was presented as magic-something that Duflo did not propose). The third is that immunizations have an image problem. When they work, there is nothing to see. When they do not work or they cause a harmful effect, the results are visible and tend to stick in people’s minds. People then tend to “reason” that immunizations are harmful in general, thus falling victim to misleading vividness, hasty generalization or the fallacy of anecdotal evidence. This is not, of course, confined to the developing world. In the United States unfounded fears about vaccination causing autism caused people to forgo immunization for their children. Irrationality, like disease, is a global phenomenon. The third is that getting immunization can require effort. The fourth is that a clear and obvious incentive (other than avoiding disease) was not provided.

Duflo’s solution involved two parts. The first was aimed at making immunization easy. This was done by setting up camps in villages. To ensure that the nurses showed up, they were paid only when they did so. This provided the nurses with a financial incentive to actually do their jobs. Making it easier to get the shots boosted the rate of immunization from 2% to 18%.

The second part was aimed at giving people a clear incentive to get immunized. As many thinkers have noted, people tend to place less value on the future and also seem to find a negative (not getting disease) less appealing than a positive (a gain, such as a gift). As such, the incentive to get immunization that will prevent something from happening latter will tend to be relatively low. However, an incentive that involves getting something right now will tend to be more effective. Duflo’s solution was to offer a $1 bag of lentils as an incentive to get one’s child immunized. This tactic increased the immunization rate from 2% to 38%, which is certainly a significant boost. As an added bonus, the overall cost was lower: the nurses are paid by the hour, so more people were immunized in less time.

While this seems like a very sensible approach, people on both the left and the right have attached it as unethical (which might be taken as evidence in its favor).

People on the left tend to advance the argument that bribing the poor to get immunized is patronizing and paternalistic. To use an analogy, it could be compared to giving a child a treat so she will cooperate and get her shots. While this is fine with an actual child (they do not know better), it might well be regarded as condescending paternalism that casts the poor as children who must be bribed to do what a rational person would do without a bribe.This would seem to be wrong.

While this does have some appeal, it can be countered. One reply would be to follow John Stuart Mill’s view: “Despotism is a legitimate mode of government in dealing with barbarians, provided the end be their improvement, and the means justified by actually effecting that end.” Swap out “paternalism” for “despotism” and keep the appeal to consequences, and this would be a possible approach. After all, the good that is done for the children and others would seem to outweigh any harm done by giving people an incentive to get immunized.

A second reply is that this incentive approach need not be paternalistic. After all, offering people an incentive hardly seems to be inherently patronizing. To use an example, students might be offered extra credit to go to an event that would benefit them. This hardly seems paternalistic. Or, to use another example, companies often provide free stuff at expos to get people to look at their goods and services. That hardly seems patronizing. Another point worth considering is that people do not claim that paying the nurses to give the immunizations is patronizing. If paying the nurse to do her duty  is not patronizing, then paying the people to do their social duty is not patronizing either.

On the right, the usual objection is that the poor should be responsible and should not be given a handout. As a moral argument it does have some appeal. After all, bribing someone to do what they should do because it is right does seem to be morally questionable (at least on some grounds). To use an analogy, if a person is given $1 when she tells the truth and tells the truth for the sake of the money, then she is not acting on the basis of morality. The person who bribes her might have good intentions, but s/he can be seen as acting wrongly, at least some views. For example, Kant would regard this in a rather negative light: for him, people are supposed to do good out of a sense of duty rather than a desire for gain.

Despite the appeal, this can be countered in various ways. One obvious way is to argue on utilitarian grounds: handing out free lentils with the free immunizations ends up preventing the harms of illness and death. Put in the financial terms so beloved to the right, it is a good investment in terms of the money saved on later medical care and the worker productivity that would be lost to illness and death. A second way to argue it is that while the parents are being bribed to do the right thing, the folks on the right should be more worried about the children than the adults. While it might be wrong to bribe parents to get their children immunized, it would be worse to allow children to go without immunization. As such, while it might be claimed that the parents have acted wrongly, it would seem that the people doing the bribing have acted rightly. Finally, the folks on the right should appreciate the value of providing financial incentives to get people to do things. After all, that is what capitalism is all about.

In light of the above arguments, bringing the poor in this manner seems to be morally acceptable.

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