Nel's New Day

March 18, 2014

Corporations, the Biggest Welfare Queens

My small town newspaper has a few regular writers, most of them conservatives. Because the newspaper publishes no more than one letter from each contributors, their diatribes pop up about every 30 days. A few weeks ago, one of the Obama-haters wrote about the Affordable Care Act combined with opposition to the proposed minimum wage. In her mind, both of these will hurt the economy because they take away jobs. Thrown into her inflammatory speech were references to entitlements, “illegal alien amnesty,” the deficit, and the U.S. printing money.

Fortunately, the newspaper also permits “viewpoints” of up to 700 words, giving respondents more space to refute such a collection of misperceptions and falsehoods. Here is my answer, also printed in the local newspaper.

To the Editor:

The arguments against the Affordable Care Act and raising the minimum wage in the March 5, 2014 News Times suffer from cherry-picking of facts and emotional language in an effort to persuade people that having health care for all is a bad idea. Here are other facts—and a few opinions–to follow up “Affordable Care Act: Who will pay for it all?”

The viewpoint’s primary concern is that taxpayers in the country will be forced to provide additional funds for the jobs “lost” through the new healthcare plan by 2024 and the proposed enactment of a federal minimum wage of $10.10.

The ACA, originally developed by the conservative Heritage Foundation, will boost the economy, according to CBO’s director Doug Elmendorf. With affordable health care, people now have more money to spend on other goods and services which then creates more jobs. The purported $70-billion wage loss came from a personal guesstimate of conservative columnist Mark A. Thiessen and not from the CBO report.

People who choose to stay home have been unfairly depicted as lazy. They may need to care for their children or sick relatives, be too sick to adequately perform job duties, want to retire a year of two early, or are looking for a few extra non-work hours. Some of these people may become entrepreneurs and pay more taxes through their businesses. Such conservatives such as Sens. Ted Cruz and John McCain have criticized the “job-lock” caused by high healthcare premiums.

The CBO reported that ACA will reduce the deficit by more than $1 trillion over 20 years and that people are paying less for ACA’s premiums than projected. Repealing the ACA would add $8 billion to the deficit, according to the CBO. This year’s deficit is on track to be only one-third of George W. Bush’s last budget. The stories about Joe Taxpayer paying more for insurance have all been debunked unless Joe wants junk insurance without hospitalization and other basic medical care or refuses to find lower premiums at a marketplace.

Low-income people are learning to use regular health care instead of getting expensive treatment at emergency rooms, another change that reduces taxpayer costs for health care. Premiums without taxpayer subsidies are also much less because insurance companies can no longer make huge profits by overcharging.

The second objection of the viewpoint was raising the minimum wage to $10.10. Even if this “loses” 500,000 jobs (which increasing the minimum wage doesn’t, according to several studies), this raise will decrease the taxpayer cost of food stamps by almost $4.6 billion per year. Oregon alone would save $26 million in just one year. As wages go up, taxpayer cost of ACA subsidies will go down. Increased wages also mean that people pay more taxes. If the minimum wage had kept up with inflation, it would be $10.74 today instead of $7.25. The wage can’t reach $10.10 for three years, even if it were approved now, meaning that it will always stay behind past minimum wages.

Without increasing the minimum wage, taxpayers continue to subsidize corporations. Just one company, Walmart, netted $17.2 billion last year as the 300 employees at just one Walmart store cost taxpayers almost $1 million in public benefit costs. Overall, low minimum wages cost taxpayers at least $243 billion a year–$770 per taxpayer.

Like roads, law enforcement, firefighters, education, and other services that I may not use, good health care is a good investment. As good citizens, we all pay for things that we oppose—in my case, trillions of dollars for wars and a bloated Pentagon budget as compared to only billions for health care.

At the same time that people demand rights granted by the U.S. Constitution, some of them try to avoid their responsibilities as citizens of the richest nation in the world. One of these is affordable health care that can stop deaths for thousands of people, sickness for another hundreds of thousands, and bankruptcy for millions more. Other countries write healthcare into their constitutions. We, too, should recognize our duty to each other as citizens of the United States.

[Seven hundred words didn’t allow for the following:]

The majority of people in the United States, including Republicans, and the majority of small business owners want the minimum wage raised to $10.10. The increase of the minimum wage in Washington state, the highest in the nation, proves that increasing the minimum doesn’t lose any jobs. And the increase in minimum wage barely causes prices to go up. A Big Mac would cost just one dime extra if the minimum wage were to be $10.50, and Wal-Mart shoppers would pay an average of $12 more a year if the minimum wage were $12. At this time, people who work at McDonalds and Walmart can’t even afford to eat and shop there.

One of the biggest welfare queens in the country is Walmart. Its minimum wage costs taxpayers one-third of the annual $243 billion necessary for public benefits. Together the six Waltons on the Forbes 400 list have a combined net worth of $148.8 billion, the same amount as a combined 42 percent of U.S. families. Most workers make less than $25,000 a year with an average wage of $8.81 an hour. That’s 12.4 percent less than retail workers as a whole and 14.5 percent less than workers in large retail.

Taxpayers provide public funds not only for Walmart’s employees’ benefits but also for its tax breaks, free land, infrastructure assistance, low-cost financing, and outright grants from state and local governments. In 2007 the cost to taxpayers was $1.2 billion; the amount has increased each year since then. Special tax loopholes such as those that permit avoidance of estate and inheritance taxes for Walmart family members cost taxpayers billions more in lost taxes, probably as much as $20 billon.

Walmart is a job killer, not a “job-creator.” For every two employees in their stores, almost three people lose their jobs as small businesses close and the corporation imports the merchandise from China.

Walmart is not the only nation’s welfare queen. A new report entitled “Subsidizing the Corporate One Percent” from Good Jobs First shows the billions of dollars in welfare payments from state and local governments to huge corporations. “Three-quarters of all the economic development dollars awarded and disclosed by state and local governments have gone to just 965 large corporations.” That’s $110 billion going to big companies with $63 billion alone to over 16,000 subsidies of firms on the Fortune 500.

At over $13 billion, the biggest welfare queen in the report is Boeing. Others are Alcoa ($5.6 billion), Intel ($3.9 billion), General Motors ($3.5 billion) and Ford Motor ($2.5 billion). Dow Chemical got 416 federal funding awards, followed by Berkshire Hathaway (310), General Motors (307), Wal-Mart Stores (261), General Electric (255), Walgreen (225), and FedEx (222). “Economic development” programs go to corporations that don’t need the money. They may bring some jobs to town, but they create more difficulty when they leave town with empty buildings.

Many people don’t know how they are getting screwed by the big corporations. It’s not the safety net that’s killing the economy: it’s the low wages and lack of universal health care that’s wiping out people. If the wealthy and big corporations were forced to pay their own way in taxes and a living wage for employees, unemployment would go down and the economy would go up.

It’s not the safety net that’s destroying the creativity and independence of the workers in the United States. It’s the takeover in all communities of the small businesses where the owners could take pride as these jobs are exchanged for rote positions at a pittance. The same huge corporations destroy the families because the members no longer work together for a better life in a family-owned business.


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