How All of Us Are Paying a Heavy Price for Corporate Greed
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There’s a new epidemic spreading across America.
It’s an epidemic of corporations turning to a business model that helps them get the maximum amount of indirect support from the federal government - by having We the People - the taxpayers - subsidize their workforces.
Basically – they get rich – while the rest of us pay.
On October 1st – United Airlines – the third largest airline in North America – is reported to be planing to outsource 630 of its gate agent jobs at 12 airports to private companies.
The move by United will affect airports in Salt Lake City – Charlotte – Pensacola - Detroit and Des Moines.
It will mean that hundreds of unionized United employees who were making up to $50,000 per year and who were able to live comfortable, middle-class lives - will be forced to find new jobs - if they even can.
And those unionized workers will be replaced with non-union workers from the private companies - who will make - on average - between $9 and $12.50 per hour and thus be members of the working poor instead of the middle class.
According to United - the decision to outsource these jobs is a strictly financial one. And boy - will the airline benefit from it.
By outsourcing these jobs to the lowest bidder - United will be, by proxy, hiring workers at a wage point that is so low - that these replacement workers are eligible for assistance from programs like food stamps and Medicaid - programs that you and I - American taxpayers - pay for.
And - while you and I are paying for their workers to survive - United will be raking in the profits.
But here’s the worst part about all of this.
United isn’t alone in its business model of internalizing profits and socializing costs.
The fast-food industry does the exact same thing.
In fact - Researchers at the University of Illinois and University of California-Berkeley found that American taxpayers pay a staggering $243 billion every year in these types indirect subsidies to the fast food industry.
That’s because the fast food industry pays such low wages that We The People are forced to make up the $243 billion difference to pay for the healthcare and other public benefits of their employees.
Americans are also paying millions in indirect corporate subsidies to Wal-Mart - the nation’s largest employer.
America’s largest retailer makes nearly $35,000 in profit every minute - and as of 2012 - the corporation’s annual sales were around $405 billion.
But those huge profits don’t trickle down to Wal-Mart employees - who on average take home just $9 per hour.
Those low wages - combined with very poor benefits - force many Wal-Mart employees to reach out to the government for assistance with healthcare - food and housing costs.
As a result - a report released by congressional Democrats found that Wal-Mart’s low wages and poor benefits cost American taxpayers between $900,000 and $1.75 million per year per store.
The bottom-line here is that the fast-food-big-box-retailer business model of internalizing profits and dumping their labor costs on society is extremely unhealthy for the American economy. And now its spreading to other industries – like the airline industry.
We need to blow up this business model now - and that can be done in a few different ways.
First – we could raise the minimum wage.
By raising the minimum wage – Americans working full-time jobs wouldn’t have to rely on assistance from food stamps of Medicaid – because they would be making enough to survive on their own without government help.