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How to eliminate socialism in the USA and save capitalism

Last Call

marcfrey150As of January 2014, 20 million more people were on food stamps compared to 2007. The total number of recipients is now around 47 million, more than 15 percent of the population. The SNAP (Supplemental Nutritional Assistance Program) is just one of many federal and state supported programs. I merely chose this one to drive home my point.

Granted, we lived through the second worst depression in modern U.S. economic history, but since then the economy has been making progress and unemployment figues have come down. Unfortunately, the amount of money spent on social welfare keeps climbing. The cost of the SNAP program is now 2 1/2 times higher ($74 billion) compared to 2007 ($30 billion). How can this be fied?

So here is my take: Increase pay for jobs that pay poorly. If we would adjust the minimum wage, currently $7.25 per hour, to its infltion-adjusted number of $10.74 per hour (or even better, raise it towards a living wage of around $14), we could greatly reduce the need for social programs.

As a capitalist at heart, the thought of regulating minimum wage and increasing it seemed counterintuitive at first but let’s follow the logic here for a moment.

Imagine going to work every day at McDonald’s, as an example, and being paid minimum wage. Even if you work hard and long hours, the pay is simply not enough to cover basic living expenses. As a result, you will end up going to see a McDonald’s-employed benefits consultant that helps you to enroll you into all the various benefits programs that will supplement your income or pay for certain needs.

To put it into perspective it means ALL taxpayers are paying for these programs in order for McDonald’s to be able to sell their meals at a certain price and keep their salary expenses down. To me, that makes no sense.

It simply boils down to one question: Would you rather pay 5 cents more for your burger or more taxes so the government can keep its welfare programs?

There are millions of Americans that want to go to work and take pride in performing their duties every day, but if employers are not willing to compensate them adequately and consumers are not willing to pay a tad more per transaction, we end up in a downward spiral economy, which as a result, increases the need for social programs.

There is a history lesson in our own country that suggests that my theory works. If you pay people more, they end up being more self-sufficient and consume more. In turn, we get an upward spiral economy.

In 1914, Henry Ford started an industrial revolution by more than doubling wages to $5 for an eight-hour workday. His unprecedented move shocked the capitalistic world, but as we now know, it didn’t destroy his company or capitalism. Two years later, Ford’s profit doubled. The higher wages made cars more affordable for many Americans.

So what are your thoughts? Should we raise the minimum wage or stay on our current path? As Ronald Reagan once stated, “We should measure welfare’s success by how many people leave welfare, not by how many are added.” Maybe it should be reworded, “We should measure the success of the capitalistic system by how many people leave welfare, not by how many are added.”

The minimum wage of $1.60 in 1968 would be $10.74 today when adjusted for infltion. Minimum wage in SC is $7.25.

For more related information go to “Raisetheminumwage.com


Please send your comments to my email at mfrey@freymedia.com. I would like to get your feedback on this important idea.