Personal responsibility should apply to individuals and industry alike

Personal responsibility should apply to individuals and industry alike

As the Trump administration works to move our system of government entitlements and welfare closer to one where recipients must get a job in order to qualify, it becomes increasingly clear that ‘personal responsibility’ is very much at the top of the president’s agenda and the collective minds of Republican legislatures throughout the country.

And why not?

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Incentivizing people who are capable of work to do so improves lives while reducing the public’s obligation to provide basic, safety-net support. As people learn to fend for themselves, they discover the joys of contributing to both their family and the society as a whole.

 

And while we are quick to point the finger at those who fail to take personal responsibility for their lives, leaving hard working Americans to pay for many of their most basic needs, we somehow manage to dismiss, forget or give a pass to employers are doing precisely the same thing-avoiding their own personal and corporate responsibilities. 

The Trump administration, with a helping hand from many a GOP controlled state legislature, is going about the job of incentivizing people who are unemployed to get to work. The plan is to allow and encourage the states to add a work requirement for anyone who wishes to qualify for Medicaid, get a subsidy from the Department of Housing and Urban Development to pay the rent or qualify for food stamps.

Yet, there is something oddly bizarre about this new welfare and entitlements scheme.

While the individual is required to provide their services to an employer to satisfy a precondition for gaining access to government subsidies, the employer gets the benefit the worker’s services. Meanwhile, you and I, as a result of the worker providing those services, are left to subsidize the employer by picking up at least a part of the tab for the employee’s most basic needs in life.

While the idea may be to incentivize the individual to go to work, what we are actually doing is incentivizing the employer to hold back on paying anything resembling a livable wage because the taxpayer is going to do the job for them.

How does this, under any conceivable economic logic, make any sense?

Let’s take the case of Walmart.

In 2017, Walmart’s pre-tax profit was $20.5 billion. In addition, it is estimated that Walmart will benefit from tax reform to the tune of $2.5 billion annually.

Would it be asking too much that Walmart assume the personal responsibility for paying its employees enough money so that they can afford food without the taxpayer having to subsidize the corporation by providing food stamps to the company’s employees?

While we tend to view these social welfare programs as subsidies to the individual, adding the work requirement as a condition for welfare qualification simply transfers the benefits from the individual to the employer.  We know all too well, that numerous employees at Walmart continue to get public assistance in the guise of food stamps which they then proceed to spend — at Walmart

There will be no shortage of voices claiming that owning up to the failure of our employers to assume their own personal responsibility is just another way of pushing a higher minimum wage. These voices will assert that if we force employers to take responsibility for paying their employees enough to eat, pay rent and see the occasional physician, businesses will drop like flies. They will argue that some compensation for employee labor is better than no compensation at all.

Nonsense.

It is true that there are small business employers who only manage to eke out a modest living each year after paying their employees. For those employers, a little government assistance might be in order.

But if a business is earning substantial profits, paying dividends to its shareholders and allowing management to earn salaries that exceeds the average employee salary by absurd ratios, can anyone explain why the taxpayer should be helping their employees to pay for food, rent and healthcare rather than the business assuming the personal responsibility to do so itself?

Despite what we have come to believe, capitalism was never about maximizing profits by paying employees so little that we require the government to make up the difference so employees can afford the very basics of life.

Personal responsibility, and its relationship to government cheese, does not just apply to prospective employees. It must also apply to those who get the benefit of the employee’s work.

Rick Ungar is the co-host of Steele and Ungar on SiriusXM Radio and a former president of Marvel Character Group.