There is a brazen lie that when corporations get their big tax break, they will pass much of it on to workers in the form of higher wages, and perhaps to consumers in the form of lower prices.
Prices are based on the law of supply and demand. Anyone selling a product or service will charge a price that maximizes profits. At no point does management say, “Hey, we’re paying lower taxes this year. We should cut the price on our product and pass the benefits along.” Why would they? They’ve already learned what customers are willing to pay and know the point where a higher price starts to reduce demand to the point that it is counter-productive, and they’ve also learned how much cutting the price will increase sales and where further cuts just mean selling the same number of products but at a lower price. And those two boundary points don’t change just because taxes — a cost of doing business — get lower. Far better to pocket that extra money for the benefit of management or for the shareholders.
But what about wages?
Why would businesses and outfits like the US Chamber of Commerce be fighting tooth and nail as they have been against every effort in cities and states across the country, and in Congress, to raise in the pathetic $7.25/hour minimum wage (a wage that has not gone up since back in 2009 at the depths of the Great Recession!)? The truth is corporations loves the subsistence level of the minimum wage because they use various taxpayer-funded welfare programs — Aid to Families with Dependent Children, Food Stamps, WIC and the like — to actually subsidize their workforce for them so they don’t need to offer workers a living wage.
If CEOs and company owners really cared about low wages paid to their workers, why would they for the last several decades have been aggressively lobbying to get the federal government to weaken labor laws as they have done so they could essentially crush the US labor movement, which today represents only 6.4% of private sector workers. That unionization rate compares to 35% of workers back in the mid-1950s, at a time when most union jobs were in the private sector. Now most remaining union jobs are in the public sector — federal, state and municipal — where the rate of unionization is still 34.4%. But public sector workers comprise such a small group overall that when combined, the unionization rate of all US workers in 2016 was a record low 10.7%, representing in total 14.6 million workers. And that is a smaller actual number of unionized workers than the number in 1983, the first year comparable data to today’s count was available, when a total of 17.7 million workers were in a union. But note that the total US population today is 27% greater than it was 35 years ago.
A 50-year uninterrupted year-on-year decline in unionization has been proceeding, by the way, despite polls that have consistently shown that most workers, when asked, say they would like to have a union representing them if they could get one. Despite generally negative media coverage of labor unions, even today according to the Gallup organization, 61 percent of Americans say they are in favor of labor unions, compared to 33% who oppose them. Clearly, if federal and state labor laws were not stacked against workers, who today (thanks to the efforts of both Republicans and Democrats in Congress and statehouses) can easily be fired for union organizing activity with no serious penalties on employers for doing so, unionization rates among American workers would be vastly higher than they are.
A Greenberg Quinlan Rosner Research poll conducted this year found 54% of workers saying that if they could have a union in their workplace they would want to have one.
Unions in the US, while they do engage in politics, exist primarily for one reason: to give workers bargaining power so they can get the boss to pay them better wages. Of course they defend workers against harassment on the job, fight for workplace safety and better working conditions too, but the big thing is using collective power to force employers to part with some of their profits to pay them better. And that is precisely why capitalists hate unions.
If a significant percentage of the workforce no longer are in unions, where is the impetus to compel greedy capitalists to part with any of their record profits to raise wages? At no time in history have capitalists willingly parted with any of their profits to raise worker compensation unless forced to by worker demands. There is going to be no gain in wages as a result of passage of this outrage of a tax “reform” bill.
Fewer and fewer people can maintain a decent life-style; more and more are falling behind. A recent survey conducted by the Federal Reserve revealed that half of Americans (49%) could not come up with $400 within 24 hours. Deregulation began under Jimmy Carter; Reagan busted unions and ingrained a hatred of “big government;” the Bushes and Clinton gutted welfare programs, repealed long-standing financial regulations, like the Glass-Stegal Act, and promoted globalization after the fall of the Soviet Union; Obama failed to reform Wall Street after the 2008 crash; Trump has focused on tax cuts for the rich justified by trickle-down economics playing on racial and xenophobic fears. Reformers are left begging for crumbs from the corporate table that will never come. Globalization and a financialized economy with little benefit for ordinary people remains the order of the day.
From
https://www.counterpunch.org/2017/12/20/the-big-lie-about-the-tax-bill-why-bosses-will-never-raise-wages/
Prices are based on the law of supply and demand. Anyone selling a product or service will charge a price that maximizes profits. At no point does management say, “Hey, we’re paying lower taxes this year. We should cut the price on our product and pass the benefits along.” Why would they? They’ve already learned what customers are willing to pay and know the point where a higher price starts to reduce demand to the point that it is counter-productive, and they’ve also learned how much cutting the price will increase sales and where further cuts just mean selling the same number of products but at a lower price. And those two boundary points don’t change just because taxes — a cost of doing business — get lower. Far better to pocket that extra money for the benefit of management or for the shareholders.
But what about wages?
Why would businesses and outfits like the US Chamber of Commerce be fighting tooth and nail as they have been against every effort in cities and states across the country, and in Congress, to raise in the pathetic $7.25/hour minimum wage (a wage that has not gone up since back in 2009 at the depths of the Great Recession!)? The truth is corporations loves the subsistence level of the minimum wage because they use various taxpayer-funded welfare programs — Aid to Families with Dependent Children, Food Stamps, WIC and the like — to actually subsidize their workforce for them so they don’t need to offer workers a living wage.
If CEOs and company owners really cared about low wages paid to their workers, why would they for the last several decades have been aggressively lobbying to get the federal government to weaken labor laws as they have done so they could essentially crush the US labor movement, which today represents only 6.4% of private sector workers. That unionization rate compares to 35% of workers back in the mid-1950s, at a time when most union jobs were in the private sector. Now most remaining union jobs are in the public sector — federal, state and municipal — where the rate of unionization is still 34.4%. But public sector workers comprise such a small group overall that when combined, the unionization rate of all US workers in 2016 was a record low 10.7%, representing in total 14.6 million workers. And that is a smaller actual number of unionized workers than the number in 1983, the first year comparable data to today’s count was available, when a total of 17.7 million workers were in a union. But note that the total US population today is 27% greater than it was 35 years ago.
A 50-year uninterrupted year-on-year decline in unionization has been proceeding, by the way, despite polls that have consistently shown that most workers, when asked, say they would like to have a union representing them if they could get one. Despite generally negative media coverage of labor unions, even today according to the Gallup organization, 61 percent of Americans say they are in favor of labor unions, compared to 33% who oppose them. Clearly, if federal and state labor laws were not stacked against workers, who today (thanks to the efforts of both Republicans and Democrats in Congress and statehouses) can easily be fired for union organizing activity with no serious penalties on employers for doing so, unionization rates among American workers would be vastly higher than they are.
A Greenberg Quinlan Rosner Research poll conducted this year found 54% of workers saying that if they could have a union in their workplace they would want to have one.
Unions in the US, while they do engage in politics, exist primarily for one reason: to give workers bargaining power so they can get the boss to pay them better wages. Of course they defend workers against harassment on the job, fight for workplace safety and better working conditions too, but the big thing is using collective power to force employers to part with some of their profits to pay them better. And that is precisely why capitalists hate unions.
If a significant percentage of the workforce no longer are in unions, where is the impetus to compel greedy capitalists to part with any of their record profits to raise wages? At no time in history have capitalists willingly parted with any of their profits to raise worker compensation unless forced to by worker demands. There is going to be no gain in wages as a result of passage of this outrage of a tax “reform” bill.
Fewer and fewer people can maintain a decent life-style; more and more are falling behind. A recent survey conducted by the Federal Reserve revealed that half of Americans (49%) could not come up with $400 within 24 hours. Deregulation began under Jimmy Carter; Reagan busted unions and ingrained a hatred of “big government;” the Bushes and Clinton gutted welfare programs, repealed long-standing financial regulations, like the Glass-Stegal Act, and promoted globalization after the fall of the Soviet Union; Obama failed to reform Wall Street after the 2008 crash; Trump has focused on tax cuts for the rich justified by trickle-down economics playing on racial and xenophobic fears. Reformers are left begging for crumbs from the corporate table that will never come. Globalization and a financialized economy with little benefit for ordinary people remains the order of the day.
From
https://www.counterpunch.org/2017/12/20/the-big-lie-about-the-tax-bill-why-bosses-will-never-raise-wages/
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