This is not about politics or to debate the examples used, it is about the consequences of our lazy thinking.

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AUTHOR: R Quinn on 10/19/2024

It’s ignoring connections and applying the reality of connections to strategic thinking.

Pretty heady stuff, eh?  Not really, just common sense or more realistically, cents. We are talking about what we say we want and the consequences of getting it. 

Corporate profits are much maligned by some people – greedy, too high and all that. Yet profits are what drive stock prices and whether they realize it or not most Americans depend on good performance in the stock market. Think IRA, 401k, pension funding, individual investments, dividend income – even jobs in some cases. About 62% of adult Americans own stocks directly or indirectly. 

There are repeated calls for a higher minimum wage, also for a providing a living wage. Most states already have a higher than federal minimum and living wage is highly variable. 

For example, the MIT living wage calculator shows for a family of four in Adair County, Kentucky  – 1 working adult – the living wage is $35.39 and hour or $73,611.2 per year. The actual median household income is $49,690. 

That same family in Barnstable County, Massachusetts requires $49.18 per hour or $102,294.4 a year. The actual is $94,387

It may be appealing to support a living wage for all, but think what that would do to prices and the economy, let alone how we would get there. 

Say we just start by raising the minimum wage and keep raising it. It creates a moving target that does not just affect the low wage workers, but salaries up the line as all workers will demand parity with the higher wages. It also affects the taxes employers pay on wages. In the end the MW worker is still at the bottom. 

Talk taxes to Americans and you will get us riled up. The fact is the U.S. is not near the highest taxed country in the world. The fact is also that we don’t pay enough taxes to fund what we spend, let alone what we want to spend. None the less, millions of Americans think they pay too much in taxes. We just don’t get the connection. 

And, it affects businesses of all sizes, the prices they must charged, their profitability and, oops, their stock price perhaps. 

I often hear envy expressed for the social programs of some European countries, why can’t we have that in America? We could if we also accepted their tax structures, including VATs (consumption tax) 20% and higher plus higher payroll taxes. 

Everyone knows the Brits and Canadians have “free” healthcare. If they can do it, why not the US? What is their secret?  A friend of mine in England is retired and pays no premiums and no out of pocket costs so his healthcare is “free” and he gets a bit annoyed if I say otherwise. Their secret is trading taxes for premiums and cost sharing at the point of service, hardly a secret. Too many Americans want the “free” part without the how part.

Are teachers underpaid? I can demonstrate they are not, but that is not the topic. Many people who feel teachers are underpaid fail to make the connection with their property taxes, the primary funding method for education – a regressive method as well. Check your property tax bill and you likely find the majority is for schools and of that more than 50% is staff pay and benefits. Raise the pay of teachers, but don’t complain about your tax bill. 

I hear calls for higher Social Security benefits, higher COLAs even – both as the trust reserve is being depleted. Before we add to the liability shouldn’t we make the trust solvent and sustainable? Shouldn’t we consider paying for what we want? 

Tariffs are a hot topic these days. No matter how you slice it, tariffs affect prices, they may affect supplies, and inflation, and in the extreme may affect jobs. The US is connected to the world. Even as tariffs may generate federal revenue, that is nominally connected to the impact on people. Do we ignore the likely retaliation by other countries?

Who doesn’t want to support American workers? But look at the tags on what you buy- everything from clothes to furniture and appliances, how much more are you willing to pay if they were all made in America- with all workers earning a livable wage? How is Walmart able to serve its lower income customers? 

I won’t go into the pros and cons of student loan forgiveness, but there is one connection question with the concept. If we were to forgive all student loans on December 31, what happens with new students after that date? Have we, by default, made college free? Surely there is a connection before and after.

Connections, consequences, call it what you will. We need to pay attention, think it through before leap toward what appears a worthy goal or simple solution, especially those labeled “free.”

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