Friday, December 10, 2010

Mmm, Economics.

Farmers get farm subsidies - they are paid to grow certain crops (like corn) and they are sometimes paid not to grow anything at all. This has massively screwed with farm production, skewing it heavily toward subsidized crops (which has far-reaching repercussions beyond a surplus of corn and unused farmland), and has made it difficult for farmers who want to diversify their crops to do so without losing money.

I realized today that unemployment benefits can be described as a work subsidy. We're paying people not to do anything, and we're paying them enough that getting back into the workforce at minimum wage means taking a pay cut, rather like farming eggplant instead of corn means taking a pay cut on the farm. Our system is broken. So how do we fix it? Simply raising the minimum wage won't work, clearly - it will only cause price inflation of basic goods and services (since McD's has to pay you more, their hamburgers will cost more). And dropping unemployment benefits to below the minimum wage would be fought every step of the way through congress. No one wants to lose "free" money!

Seriously though. What, therefore, should we do?

Today's reading assignment, no matter your politics or opinions on poverty:

And we expect people to take these jobs... why?

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