You know those ads in which the very serious voice-over claims to have information “the credit card companies don’t want you to know about”? Turns out, the advertisement is for one of those credit management companies the credit card companies very much want you to know about. If you, the consumer, have decided to pursue bankruptcy – you know, as a business strategy in an effort to reposition yourself for improved operations going forward (just like big business does when jettisoning pension obligations) – the credit card companies would first like to take a look at your finances…a very close look.
To that end, they’ve developed a detailed budget format. I’ve had occasion to see one of these forms and I can assure you, it covers EVERYTHING. They’ve thought of things you haven’t. When setting up a personal budget, most people tend to think big; house payment, car payment, electricity, water. But there’s also what’s known as “the Latte Factor”. The idea is, if you stop by some local coffee stop every day and buy a four dollar latte, why, you’ve spent $120.00 month – $1,440 dollars a year you COULD have been giving to the credit card companies! (For the record, I don’t really mean to denigrate the idea. I support the notion of paying one’s bills…)
They’re looking for that. It’s the form equivalent of turning you upside down and shaking to make sure your last shiny penny isn’t hidden at the bottom of a pocket. They want to know, on average, how much you spend on birthday presents each month. I mean, it’s VERY detailed. The first time I saw one of these forms I was simultaneously impressed/sickened by the comprehensive nature of the personal invasion associated with credit card companies ensuring you’re not spending their money foolishly. (I note there was no space on the form to explain that the good job you once had that allowed you to manage your debts is now done in China and all you’ve been able to find to replace it is a job – or two – in the “service industry”…)
This, of course, brings me toward my point. (Just remember the form bit for a minute. We’ll get back to it.) Recently, I’ve been seeing “news” stories about fast-“food” workers staging one-day walkouts, agitating for higher pay. By now, we’re all familiar with the stories of Wal-Mart paying its workers so poorly they’re forced to turn to state assistance even though they’re willing to work. The other day, I heard there’s a group out there trying to get public corporations to list CEO pay as a ratio against the pay of the rank and file workers of their companies. The idea is to “shame” CEO’s into paying better wages…as though CEO’s understand the concept of “shame”…
I don’t mean to pick on McDonald’s but a quick Google search shows that McDonald’s profits for 2012 came in at $5.5 billion dollars – that’s “billion”, with a ‘B’. Wal-mart’s profits, sadly, were down a bit. They had to settle for only $15.7 billion in profits in 2012. Now remember, these are profits – the amount of money left over after all expenses (including wages) have been paid. These days, a CEO makes roughly 204 times that of their average worker’s pay.
Sorry about the numbers. I know they’re boring. But the two preceding paragraphs are a kind of compare and contrast; what’s the situation for the workers as compared to the situation for the companies? In the face of all of this, California is considering raising the state’s minimum wage from the current $8.00/hr to the incredible $10.00/hr by 2016. Woo-hoo! That means a person working full time for minimum wage in California will only fall $980 below the poverty line in three years instead of the $5,140 they fall behind now. Assuming, of course, the poverty line doesn’t change between 2013 and 2016.*
More numbers, I know. The worst part is that all of that is based against a “poverty line” that is, if I may say, ridiculous at best. For a person to try to get by in most places in California on $22k per year is…difficult, at best. You want to set a realistic “poverty” line? Use that form I mentioned at the beginning – the one where the credit card companies want a realistic look at your spending habits. Fill in real numbers. Don’t try to tell me how little I need if I just forego heat or indulge in food only every other day. (For my part, I won’t try to pretend everyone needs the newest iWhatever every time they come out with a new color…) Do it on a county by county basis – because the cost of living really is different around the state. Annualize it.
Once you’ve done that divide by 2,080. (That’s the number of hours a full time employee works each year. Did you know that?) You know what you’ll have? You’ll have a legitimate living wage. And THAT’S my actual point. It’s time to stop all the window dressing and symptom-treating and pay workers enough to live on. Let’s pass THAT law. (Yes, I know it would hurt small, mom-and-pop business so we’ll start with businesses that employ 20 or more people without any bunk regarding full or part time.)
Yes, I know all about the horrified, hand-wringing and dire, sky-is-falling predicted consequences from businesses that might have to find a way to squeeze by on profits of only $14.7 billion dollars a year. (Oh, the huMANity…) But I’ve taken enough of your time, for now, so suffice to say, for now, those calamitous predictions are wrong – just like every other worker reform that has occurred in the face of predicted destruction. But I’ll come back to it. There’s a lot that goes into this. It’s better if we take it in bite-sized pieces…
* These are my back-of-the-napkin calculations so you can see (and I can remember) how I arrived at the numbers:
Poverty line in California for one person, 2012: $21,780
Full time, 8/hr: $16,640/yr $5,140 below 2012 poverty line
Full time, 10/hr: $20,800 $980 below 2012 poverty line
Source: quick Google search, answered by Ask.com. There are no numbers provided for one person but there’s a regular increase per individual of $7,640, which I subtracted from the listed 2 person poverty line of $29,420…