In my latest reading of I'll Be Short: Essentials for a Decent Working Society, Robert Reich essentially addresses the issue of whether doing the right thing would have counter-productive consequences for businesses and workers. You hear from a number of conservatives that it would----only they would disagree with many on the Left about what the right thing is. Conservatives have argued that raising the minimum wage would result in unemployment; that unions encourage businesses to go overseas to escape union demands, or to hire fewer workers because each worker costs so much under unionization; and that Family and Medical Leave would result in the hiring of fewer women because it would be costly for businesses to train a female worker's replacement while she is on leave.
Reich argues that policies such as flexible
work hours actually help businesses because they increase worker morale
and productivity, reduce absenteeism, and keep good workers, which means that businesses would not have to spend as much money training new people.
Reich also acknowledges that there could be such a thing as too much.
If the Earned Income Tax Credit is increased, for example, then
businesses may pay their workers less because they know that the
"taxpayers would make up the difference" (page 56). Reich says that
raising the minimum wage too high could discourage employers from hiring
low-skilled workers or lead them to rely on machines rather than
working people. Reich does not think that unionization would
necessarily encourage companies to go overseas, for most low-income
people are in the "local service economy", and Reich refers favorably to
efforts to unionize health care workers and raise janitors' wages. And
yet, Reich states that "there's a limit to how high unionized wages can
go before employers find it cheaper to automate the jobs, cut back on
staffing, or not offer the services to begin with" (page 56).
Reich says that the Federal Reserve could stimulate the economy and thus
demand for low-wage workers, resulting in higher wages. But, if that
is taken too far, Reich says, the result could be inflation. Reich then
says that "the best way to make work pay is to ensure that everyone has
an education sufficient to raise their productivity and thereby warrant
higher pay" (page 57).
Reich states that "Together, a somewhat
higher minimum wage, a somewhat expanded EITC, more unionization of
low-wage workers, faster growth, and better education can lift full-time
working families out of poverty" (page 57). But Reich acknowledges
that we may have to try until we get the "ideal combination of these
measures", and yet he says that we're "rich enough and clever enough"
for such a task (page 57).
I'd also like to note something that
Reich says about welfare. Here, too, Reich seeks to understand
conservative positions about that issue. Reich says that there
was at one point resentment among working women towards welfare mothers
who were only "slightly poorer" than they, for welfare mothers got to
stay at home with their kids and receive welfare, whereas working
mothers were out there trying to earn an income for their family after
the loss of American manufacturing jobs. But Reich then goes on to say
that, now, many mothers are in the same boat, for the law aims to put
welfare recipients into the workforce. On page 59, Reich
states that "direct handouts and income transfers to do the job" result
in dependency and are hard to sustain politically, for "there's no
political will to carry them out on a large scale." Reich expresses
openness to an idea that I read about in Rick Santorum's It Takes a Family: give the poor capital.
appreciate Robert Reich's acknowledgement of nuance. I think that it's
important to try to solve problems, while also keeping an eye out for
potential drawbacks to proposed solutions. Both need to be balanced. We
shouldn't decide not to solve problems because some solutions may have
drawbacks. But we should also seeks ways to lessen the drawbacks, or to
seek better solutions.
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