Doing The Math — Buzz Dixon

Feb 8

Feb 8 Doing The Math

When you buy anything, be it a product or a service, you are paying for the labor that went into making the product or providing the service.

You’re all with me on this so far, right?

The worker should ideally be paid enough money to survive on. To keep things simple we’ll set a ridiculously and arbitrarily low figure of $1 an hour.

From that $1 there should be taxes, health insurance, and Social Security payments withheld; this is only fair and right if one is going to be a productive citizen.

For each let’s put aside a dime, $.10, the mere tenth-part of a dollar. That’s thirty cents right there, meaning the worker gets to take home $.70.

The worker’s employer, when tallying up the cost of the product or service so he may set a price, adds the total labor cost (in this case $1) plus the total production cost (we’ll say that costs $1 as well just so we can keep things simple), adds on his profit margin (another buckaroo) and sells it on the open market for $3.

So far, so good.

But let’s say our employer is a less than scrupulous person. They hire an undocumented worker and, instead of withholding the taxes, health insurance, and Social Security from the worker’s wages and paying that into the appropriate agencies, they pocket the difference.

They can then either drop the cost of their product or service so that it now costs $2.70, or they can continue to sell it at full price (in which case they make $1.30 in profit instead of the measly one dollar they took previously), or something in between.

Here’s our problem: The ten cents that should have gone to the government to pay for roads and firemen and pure food & drug laws and national defense and a host of other things that should be paid for if we wish to live in a civilized society…aren’t. Likewise the health insurance that should be spread out so that everybody pays fairly and nobody gets gouged, that falls short. And Social Security, which should be paid into first but absolutely will be disbursed when a person reaches retirement age, that’s short changed as well.

Somebody has to pay for those things, and that somebody is you.

You will either pay for it by driving on crappy, dangerous roads; or by seeing more of your money go to emergency room care rather than space exploration or whatever floats your boat; or by not having a big enough cushion in the Social Security pile so that everybody gets a little more, or (more likely) you will end up paying that missing $.30 when your taxes go up.

So if the real cost of your product or service was $3. And you only paid $2.70 for it, you are going to end up spending $.30 in taxes plus whatever additional costs are needed to shift resources around.

So our unscrupulous employer isn’t saving you a damn dime.

And if the employer has charged you the full $3 cost, you’re going to pay an additional $.30 + change, so the $3 item is actually going to cost you more like $3.33.

Question:Why are you letting yourself be screwed by these unscrupulous employers?

And while we have used undocumented workers*, the truth is these unscrupulous employers often hire fully documented workers but then require kickbacks; and/or demand their workers to use the company store; and/or spend money hiring prostitutes politicians to suppress efforts to raise minimum wage to a subsistence level, thus forcing their workers to go on government food assistance if they want to eat.

So when you go to Wal-Mart and think you’re getting a great deal…you’re not. You are going to pay the full retail price for it sooner or later, and if you opt for later you’re going to spend more in taxes and get back far less in services you’d like your government to do for you.

Know where the blame goes. It’s not the workers who are fncking you over.

* And I avoid the term “illegal immigrant” because an awful lot of undocumented workers are native born US citizens who through no fault of their own have to take pretty crappy under-the-table jobs if they want to have any kind of existence beyond the barest subsistence level off the government dole.