Trickle Down Economics Will Never Work, Because of Greedy Billionaires

Karen Banes

Image source: Bryan Angelo on Unsplash

Jeff Bezos has an estimated net worth of over $140 billion, and there is speculation that he could soon become the world’s first trillionaire. Yet in June of 2020, his company made the decision to cut the pay of Amazon warehouse workers. These workers had temporarily been granted a small extra hourly payment of $2 to reward the fact that they were expected to continue working during a pandemic that had resulted in the general population being put under 'stay at home' or 'shelter in place' orders. It's hard to know why the payment was cut. It wasn't because the pandemic was over (it was still raging). And itwasn't because Amazon's profits were falling, making it hard to pay their wage bill (they were, in fact, rising by billions of dollars).

Amazon workers already work under notoriously poor conditions, and many of them desparately needed the $2 an hour pay increase they were given, effectively as ‘danger money’ for working through the Covid-19 pandemic. Back in May, Amazon had already phased out the other temporary policy they’d brought in to protect warehouse workers, Unlimited amounts of unpaid leave due to illness was abolished, even in states where the law required it.

Bezos is not alone, of course, in hoarding his billions, while his workers struggle to make ends meet. While he may be the world’s richest individual, the world’s richest family is believed to be the Walton family (the founders of Walmart) who are reported to have a net worth of over $160 billion. Their employees meanwhile are known for having topped the list of ‘working poor’ who have to rely on government assistance, despite having jobs.

The working poor having to claim government assistance is nothing new, of course. But it’s something that’s always worth considering, before you react to the person in front of you at the grocery store using food stamps. If you must shake your head or roll your eyes, maybe aim it at Jeff Bezos or Jim Walton. They won’t care what you think, but when billionaires run companies whose employees are so poorly paid they still qualify for welfare, let’s all at least acknowledge that it’s the billionaires who are ‘leaching’ off the government, not the workers.

A common justification for the existence of something as unnecessary, nonsensical and potentially psychopathic as a multi-billionaire is ‘trickle-down economics’. Billionaires are good for everyone, the out-of-touch will claim, because they create wealth.

Trickle-down economics is founded on the belief that as the rich get richer, the poor get richer too. The basic assumption is that as the rich gain more wealth they use that wealth to create companies and jobs. And underlying that assumption is the idea that jobs create wealth for those employed.

You don’t have to be a mathematician to know that minimum wage jobs don’t create wealth. They create poverty and debt. There’s not a single state left in the USA where the average rent for a one-bedroom apartment is affordable on minimum wage. In fact, Business Insider worked out that a minimum wage worker couldn’t even afford a one-bed home if they worked two full-time jobs in most US states.

That was fine when minimum wage was just that. The absolute minimum you could expect to earn. An amount you might start on, as a high school student at your first part-time job, but wouldn’t expect to be on for long. That’s simply not how minimum wage works now. Many unskilled or low skilled jobs are permanently set to minimum wage, no matter how long you work there. And many more have no logical progression from minimum wage to decent wage, allowing millions of workers to get stuck in minimum wage jobs, or less-than-living-wage jobs, long-term.

What’s more, rich business owners don’t always pay their workers’ wages, minimum or otherwise. Businesses stealing from their employees via wage theft not only happens, but according to the New York Times, it happens more frequently than any other form of theft in America.

Image source: New York Times

So now the billionaires are stealing from their employees as well as the government. No wonder they’re so rich.

Jeff Bezos and the other members of his billionaire boys’ club are not creating trickle-down wealth. They're far too greedy to let any of their wealth trickle away. They’re holding on to their wealth, and creating a workforce who, depending on other circumstances in their life, often live in poverty or near poverty.

Economists have long realised that the idea of trickle-down economics simply doesn’t work. They’ve even pinpointed the main reasons that it never will. Yet still we pretend that it might.

Trump’s claim to have presided over the greatest economy in history was somewhat inaccurate, even before the coronavirus pandemic, but more importantly it is mostly irrelevant to a lot of ordinary Americans. A good economy does not always mean a good life (or even a living wage) for everyone. Until the billionaires’ boys club grows up and learns to share, rather than stealing from workers and taxpayers to add zeros to their bank accounts, a good economy has very little impact on the average hard-working American.

Ask any Amazon worker risking still risking their life to bolster the company's billions of dollars of profit, without even the $2 an hour extra that Bezos temporarily deemed their lives were worth.

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