The Case Against “The Case Against Heartless Capitalism”

Over at The College Conservative, Alex Uzarowicz opens up an interesting discussion on the moral responsibilities that people, and corporations (which are just groups of people) have to the rest of society.

Yeah, I know, it sounds pretty weak, but let’s see what he has to say:

 

“I’m not going to cite Karl Marx’s Communist Manifesto or Ralph Nader’s rebuke of a free-market system. Instead, I’m going to go back to our very simple founding: the Founding Fathers themselves, Adam Smith’s “Theory of Moral Sentiments,” and even businessman Henry Ford.

The men listed above are certainly not communists, but all of them share something in common: their works advocate civic virtue. They understand that a republican form of government and a capitalist economy are only successful through a virtuous populous. People must take care of one another and lead moral individual lives, which happen to be the two most important commandments that Jesus declared in Saint Matthew’s Gospel: “Love the Lord your God with all your heart… [and] Love your neighbor as yourself.”

 

Well, that’s not as silly as it might have been.  In fact, I think it’s a fairly accurate description of what it takes to be a successful business these days.  Through the virtue of competition not only must you put out a great product, but you must also behave in a way that reassures people that giving you their business isn’t going to reflect poorly on them.

It’s nice we agree thus far, I’m beginning to think that this is the start of a great friendsh-

”The obvious fact is that we have lost our civic virtue.”

Uhhh…What now?

“We can all agree that love is important. However, many of today’s economic problems stem from a lack of love. Take, for example, the minimum wage fight: the debate shouldn’t be about whether or not wages should be increased, but rather about government interference. Why do we need a government to tell companies to pay a specific amount of money to its workers? Shouldn’t employers understand their own workers’ needs?

Clearly, however, they do not. And that is the core of the minimum wage problem.”

Dude, think.  Are you sure you want to go down this road?

“McDonald’s and Walmart are prime examples. The “Golden Arches” are worth almost $62 Billion, and employs about 1,900,000 employees. Despite these huge numbers, theaverage salary for a McDonald’s employee is $7.81 an hour.”

Holdupholdupholdup.

Before we go any further, I must point out that McDonald’s makes its money through FRANCHISING, so the guys over at Mickey D’s Corporate have almost NO control over labor cost.  That decision gets made by a franchisee, the guy who owns the local McDonald’s next to the Gamestop.

It is up to HIS discretion to pay people what HE thinks is a fair price to staff HIS McDonald’s.

Okay, back to the drivel.

Walmart is at least a bit better. The average salary is $20,744 per year, which amounts to about $11.75 an hour, but is still lower than the average retail wage of $12.04. Walmart claims to bring in over $400 billion in annual revenues. These giants make a lot of money. Instead of paying their employees higher wages, however, they encourage them to apply for government programs such as food stamps or Medicaid.  The “McResources” hotline, which is meant to help McDonald’s employees, does just that: it lists food pantries around the area and available government assistance. Walmart is also reported to have the most employees out of any company on food stamps.”

Two things: First, alleging that these companies are helping their employees enroll in government programs IN LIEU OF higher wages seems like a pretty difficult thing to prove, which is probably why you offered NO evidence that this is the case.  Second, in an economy like the one we’re in, the shocking thing isn’t that there are workers are on food stamps or Medicaid.  What IS shocking is that these terrible, horrible, mean-old corporations are spending money to help their employees sign up for programs that might help them up out of poverty and, quite possibly, away from their current job.  In fact, it is for that reason that I’d argue these programs are in total compliance with the concept of “Civic Virtue”.  How many employees use these programs to reduce their hours so that they can work on college? Or look after their kids?

“The U.S. House Committee on Education and the Workforce concluded that a Walmart Supercenter of about 300 employees may cost taxpayers between $904,542 and $1.75 million a year due to its abundant need for welfare.”

“Concluded”.  “May”.  Pick one.  This “study” done by the oh-so-impartial “Democratic staff of the U.S. House Committee on Education and the Workforce” is based entirely on  data out of Wisconsin then hamfistedly extrapolated and weaponized into a report with “national significance”.  I’m not an economist, but I don’t think it’s a stretch to say that not every state is like Wisconsin, so using them as a baseline for the rest of the country seems a little bit sketchy.

“So, the employees in these companies depend on the taxpayers. But so do their customers, who also frequently rely on food stamps. People on food stamps don’t go to fancy supermarkets like Whole Foods. They either go to Walmart or fast food chains. Their products are significantly cheaper due in part to the employees’ lower wages. Seriously, how can those living in poverty pass on a Dollar Menu sandwich?”

I’m not quite following the problem here.  Is it a bad thing that people on foodstamps can get more value from what they’re allotted by going to Walmart?  I don’t know about you, but if my money is going to be forcibly taken away from me and given to somebody else, I’d prefer it gets used in a cost-effective way.  As far as products being cheaper “due in part to the employees’ lower wages” goes, find me some figures on that.  How much is “in part”?  Take into consideration my previous question about part-time employees being able to take fewer hours because of their use of government programs.  What happens to the hours that employee vacates?  Does the position go unfilled?  Obviously not.  However, what’s not so obvious are the costs incurred by the business as a consequence of those vacated hours.  How much money, time, and effort goes into training new employees?  Into keeping track of an expanded workforce?

“Nutrition issues aside, government dependence of any kind is unsustainable. These kinds of welfare program promote unethical wages, and incentivize those unethical wages by acting as an indirect subsidy to big businesses. I commend Portland, Oregon, for discontinuing future investments with Walmart. That’s about $36 million in taxpayer money. Their reason is plain and simple: Walmart needs to provide better-paying jobs and benefits, not rely on welfare payments to offset their own low wages.”

In an economy where we’re dealing with sustained unemployment, particularly when it comes to younger, entry level workers (15.8% for 18 to 29 year old, 23.8% [!] for African Americans in the same age range.)  what exactly is an “Unethical Wage”?  I also have to wonder if the youths aged 16-24 who make up 29% percent of Oregon’s unemployment rate share your view on Portland’s stance on Walmart…

“Companies should follow Henry Ford’s example. Ford established shorter shifts to his workers and a $5 a day wage which helped establish a strong middle class. The government didn’t tell him to do that: his decision came from his own personal conviction that higher wages actually help employees lead stronger financial lives. Ultimately, this also meant that more customers could afford to buy Ford’s cars. Ford’s reasoning may have been driven by personal profits, but at the end of the day, Ford didn’t allow his workers to go on welfare or wait for the government to establish higher wages.”

Ah, the “$5 wage” gets trotted out again.  Well, Alex, I hate to be the killer of your dreams and destroyer of your idols, but Mr. Ford didn’t raise wages to $5 a day because he was a nice guy, or because he thought it meant his employees would buy his product (which seems like a really poor business model to be frank).  He rose them because he wasn’t sustaining his employee base.  And by “sustaining” I don’t mean making sure they were well fed and had healthcare.  I mean that the year before he raised wages to $5, he had to hire 52,000 workers in a year in order to keep a workforce of between 13,000-14,000 people.  At the time, a $2.50 wage was not enough to keep people from just up and quitting whenever they felt like it, and since training new people was an additional cost, he figured that increasing the base wage to $5 would be far less than what he was losing from employee turnover.  There was no “may” about it, Ford’s reasoning was about profits.

“Income inequality is not caused by the lack of government regulation.”

Phew!  I was worried about you for a second.  You were going a little off the deep end there.

“It is caused by a lack of concern for the common good; a lack of care for one another. It’s a symptom of a culture that falls short of valuing life, and instead embraces themes that include over-consumption, individualism, and material wealth.”

Really?  Individualism is a bad thing?  Material wealth is a bad thing?  Without individualism and the desire for material wealth we’d still be serfs tending fields.  Any idea what  THAT does to income inequality?

“Liberals prescribe the wrong solution. Increasing the minimum wage is just a band-aid over an immense cultural problem. The solution to this problem should not come from the government. What we need is a change of minds and hearts, a new culture war that devotes its time and energy to promoting justice and economic opportunities for all. Each of us has to look out for our neighbor’s successes instead of solely our own, and this change starts inside each and everyone one of us.”

Ah, finally, the end.  Sadly, this paragraph, like a lot of the others, starts off pretty strong but ends in an ivory tower.  Yes, liberals prescribe the wrong solution.  However, increasing the minimum wage is no mere band-aid; it is in fact a straight jacket on the economy, reducing employment across groups that can afford it the least.  The minimum wage promotes injustice by preventing companies from running how they want to run, and reduces economic opportunities for ALL people.

That’s not just multi-billion dollar companies like Walmart and McDonald’s, but individuals as well.  Individuals like Jeffry Tucker’s friend Tad:

I’ll give you one thing, you’re right about us needing to look out for our neighbor’s successes instead of solely our own.

That’s one of the reasons I oppose minimum wage laws, and why I’m in the fight against big government.

It’s also one of the reasons why you should change and join in the fight.