CAPITALISM WITH AIRBAGS

By Roger Kostmayer

Helping the unemployed at a modest level for a reasonable length of time should be a no brainer.  But extremists on one political pole claim disingenuously that lazy recipients are lying around in hammocks, and Senator Paul announced (also disingenuously) that unemployment checks were ruining the long term unemployed.  The opposite pole accused these heartless plutocrats of wanting to starve poor children. There are, however, objective pundits from both camps who agree the goal should be to meet the needs of both blameless individuals and of society.

Society (and our economy) need GROWTH to finally pull us out of the most devastating recession since the 1930’s; individuals need JOBS that pay a LIVING WAGE.  Today, growth is lower than is needed and available jobs are fewer than the unemployed.

The good news is the solutions to these existential challenges are symbiotic – solving one helps solve the others.  More income from unemployment checks and an increased minimum wage for the poorer strata creates demand, immediate consumption and a relatively high economic multiplier (e.g. $1.00 of investment produces $1.50 of economic benefit ) –  thus producing growth.  Growth, in turn, produces more jobs.  Said colloquially, what goes around comes around enhanced, and this can produce a bipartisan win/win.

The key is to insure jobs pay a living wage, and the fact is the federal minimum wage is (at roughly $7.00 per hour) 50% BELOW what it was 50 years ago ($10.00 in today’s dollars).

No one wants to be unemployed, especially for $300. a week plus humiliation.  Think about 5 Americans who worked and paid taxes for decades and now, through no fault of their own, are looking for a job knowing there are only 3 positions open.

Humanity and compassion aside, it’s very much in our self interest to extend unemployment benefits, create jobs by investing in infrastructure and transportation (at a time of historically low interest rates), and to then phase in increased minimum wage levels over a short period.

 

Roger c. Kostmayer

KW,  Jan. 3, 2014

[livemarket market_name="KONK Life LiveMarket" limit=3 category=“” show_signup=0 show_more=0]