Opinion: By Opposing Minimum Wage Increase, Republicans Scam Taxpayers and Endorse Poverty

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Last November the non-partisan Government Accountability Office released a report confirming what had already been widely known: the American taxpayer is effectively footing the bill for the labor that enables many of the nation’s largest corporations to reap billions of dollars in profits.

Workers at many of America’s richest companies, including Walmart and McDonald’s, are among the top beneficiaries of federal aid programs such as Medicaid and food stamps.

In effect, this means that for workers at these companies to sustain themselves–to have enough to eat, to have access to healthcare to keep themselves physically and mentally functional, to have their basic needs met to keep them alive—the American taxpayers must supplement the insufficient wages these companies pay while their profits soar and economic inequality in the U.S. continues to worsen dramatically.

And yet Republicans would have us believe that raising the minimum wage will hurt the economy by putting an undue burden on companies such Walmart, McDonald’s, Kroger, Amazon, and Dollar General—some of the worst offenders when it comes to leeching off the American taxpayer to subsidize their employee’s ability to stay alive and work—somehow it’s absolutely affordable for the average American to pick up the tab for these companies and their shareholders but receive no portion of their profits.

Indeed, it is clear that the Republican opposition to increasing the minimum wage to a livable standard is part of their longstanding overall strategy of continuing to transfer the nation’s wealth to the richest among us and to assault American workers.

Republicans are scamming American taxpayers and workers.

And let’s be clear, the lion’s share of federal aid beneficiaries—70% of the 21 million—work full time.

The party of so-called personal responsibility, I guess, means that quite literally. People need to be responsible for themselves, but corporations apparently do not.

And, to be fair, we should acknowledge that part of the Republican opposition to increasing the minimum wage is that it would really hurt small businesses.

In many ways, this argument, which is a projection and not an actuality, is belied by empirical reality. Since 2009, 24 states and the District of Columbia enacted minimum wage increases, and the worries projecting substantial job loss were proven to be unfounded. In some cases jobs were actually created because increasing wages stimulates the economy; and where there was job loss, it was minimal.

And if they are so concerned about small businesses, Republicans could propose what they did in 2007, the last time the minimum wage was increased: build in tax credits for small businesses.

But even this discussion doesn’t really get to the heart of the issue.

We need instead to look at what’s really being said when it is argued that legislating that workers earn a living wage would hurt small businesses and thus the economy.

Is that really an economy that we want to endorse? One that relies on people living in poverty?

Should we really view as a successful business one whose survival depends on its workers living in poverty?

This is really what Republicans are saying.

It’s as if they are saying, “Well, we’re really going to hurt those small plantations if we take away their slave labor.”

Of course, this isn’t so far-fetched. Let’s not forget Arkansas Senator Tom Cotton’s legislative efforts to ban the New York Times’ 1619 Project from being taught in schools were rooted in his worldview that, basically, the series gave slavery a bad rap and did not recognize the necessity of brutally enslaving people to build the world’s wealthiest economy.

This thinking, as I’ve argued elsewhere in the pages of PoliticusUsa assessing Cotton’s perspective, is just wrongheaded in believing we have to choose between a humane and a wealthy economy. History bears out that a humane economy is actually the most efficient and productive economy.

And this historical truth holds when it comes to increasing the minimum wage as well.

A study from the Illinois Economic Policy Institute, for example, highlights the many ways raising the minimum wage would significantly improve Illinois’ economy. The study contends, “By raising the minimum wage, Illinois can boost worker incomes, reduce income inequality, increase consumer spending, grow the economy, generate tax revenues, and decrease taxpayer costs for government assistance programs.”

In a nutshell, raising the minimum wage to $15 would both save taxpayers money by decreasing the need for public assistance for the working poor (saving $87 million alone in food stamp outlays, according to the study), increase the revenue the state brings in from income and sales tax (generating, the study says, $380 million in new state tax revenue), and overall generate $19 billion in economic activity.

With such a scenario, the state could actually cut taxes, putting money back in the pockets of working taxpayers, and still increase state revenues.

Indeed, while Republicans love to falsely claim that tax cuts for the wealthy pay for themselves through increased economic activity, in the case of increasing the minimum wage, it’s actually true.

Moreover, from a cultural perspective, doesn’t capitalism pretend to want self-sufficient people and to reduce the scope of the welfare state?

What we see here is that directing resources through public policy not to the wealthy, as Trump’s tax cuts did, but to the worker more than arguably contributes more powerfully to the health of the economy and overall society.

Of course, that’s not really what Republicans want. Despite their efforts to represent themselves as the party of the working class, their real agenda is simply to make the rich richer and the rest of us as poor as can be.

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Tim Libretti

Tim Libretti is a professor of U.S. literature and culture at a state university in Chicago. A long-time progressive voice, he has published many academic and journalistic articles on culture, class, race, gender, and politics, for which he has received awards from the Working Class Studies Association, the International Labor Communications Association, the National Federation of Press Women, and the Illinois Woman's Press Association.