Low Minimum Wage = Business Welfare

In 1968, the average annual poverty income level ($3,410) for a family of four was almost exactly what a minimum wage worker could earn in a year of full time work. Today, given inflation, the average annual poverty level for a family of four is $26,200, but a worker receiving the federal minimum wage working full time for a year only makes only $15,000, 43% below the poverty line.

For the last forty years, or since the beginning of the Reagan administration, Republicans and businesses have opposed raising the minimum wage, claiming that it hurt business and the economy. In truth, raising the minimum wage does hurt certain businesses, often small businesses, but that should never have been the question. The first question should have been whether it was fair to penalize workers on the edge of poverty to keep marginal businesses going. Supposedly, the idea behind the minimum wage was to keep business from taking advantage of poor workers.

Now… when minimum wage workers can’t make enough to live on, what happens? They suffer, and so do their families…and they start applying for federal and state benefits. Those benefits are paid for by taxpayers, in effect subsidizing the various businesses benefitting from paying lower wages. The use of part-time workers, who don’t make as much and don’t get benefits provides an even greater indirect subsidy to those businesses.

Those indirect subsidies aren’t primarily paid by corporations, but by individual taxpayers, including the higher paid employees at those businesses, which is another revenue stream to support this indirect business subsidy.

The second question is what is the overall economic effect of keeping the minimum wage low. Because salaried wages are to some degree pegged to the minimum wage, especially those of workers paid by the hour, this depresses wage levels compared to prices. Combined with the loss of purchasing power by minimum wage workers, the result is that a significant proportion of workers have less and less money to spend. Add to that the fact that the lower a family’s income is, the greater the percentage that’s spent. Tht means that when lower-paid workers have more money, the economy benefits more than when those funds are hoarded in corporate coffers. Because the U.S. is essentially a consumer-driven economy, people buy less and the rate of economic growth slows.

A comparison of the minimum wage to the poverty level indicates an overall trend that, on the average, there has been more economic growth when the minimum wage is closer to the poverty level and that growth rates have generally declined as the minimum wage was frozen and costs-of-living have increased.

It’s simple. When people don’t have enough money they can’t buy things. Moreover, when the government is providing a greater share of the income of underpaid workers, because they can’t earn it, not only can’t people buy as much, but the deficit also grows, the indirect subsidy to business gets greater, and economic growth slows.

And, in a way, keeping the minimum wage below the cost of living is essentially a form of fascism, supporting business through government intervention.

Future Publishing?

Over the last several years, I’ve certainly read and heard a great deal of speculation about the future of publishing and books. When ebooks were first introduced, some viewed them as a trendy but short-lived novelty, while others felt that they’d dominate the entire industry. Only a few old-time industry professionals and not many more of the newcomers foresaw the way the market has sorted itself out.

One aspect of publishing that’s overlooked is that that the non-fiction and fiction markets are very different, even though most major publishers handle both. So, if you look at overall publishing revenue, print books outsell ebooks almost four to one, but those figures don’t break out non-fiction from fiction (at least the figures I can easily find) and they don’t include the full impact of independent authors self-publishing, which is largely e-publishing. Non-fiction also tends to sell a higher percentage of print books, as opposed to ebooks, and much of the printed non-fiction sells for higher prices than fiction. So aggregated revenue figures tend to misrepresent the market.

One of the more interesting statistics I ran across was that in 2019 ebook sales comprised 18% of the total book market by revenue generated, but 36% of the number of books sold, and that 36% number tracks fairly closely to my unit sales figures – excepting audiobooks.

Not surprisingly, sales of mass market paperbacks for most authors have declined precipitously. Regardless of all the rhetoric, for most authors mass-market paperback sales have declined to a third or less of what they were twenty years ago, and that assumes that a traditional publisher will even print mass-market paperbacks for midlist (or lower) authors.

Right now, unless there’s major shift in the economics of publishing, mass market paperbacks are on the way out for most authors. Only million-copy sellers are likely to be published in mass market paperback within a decade, if not sooner. Hardcover volume for fiction seems likely hover in the same range and may even increase slightly for non-fiction.

My personal belief, backed by no statistics, is that the number of self-published “indie” authors will taper off and only track future growth of the fiction-reading public, for several reasons. First, while indie authors get a much larger percentage of sales revenue, readers expect “indie” books to be cheaper (with the growth of indie sales, some readers also expect ebooks published by traditional publishing firms to be cheaper, which I don’t see happening, except for promotional events). Second, most indie authors sell fewer copies per book. That means writing more books per year. That’s damned hard, especially if an author wants to maintain any quality, and if the author outsources editing, that adds to costs.

The other factor is that ebooks can be easily pirated, and I don’t care what anyone says or what any studies purport to show, piracy cuts revenue to authors. The drop in mass-market paperback sales has in no way been compensated for by a corresponding and equal growth in ebook revenues.

So, however it turns out, I don’t see authors or publishers getting any great windfalls from ebooks.

Comment Translations

Every once in a while, I read comments by readers, which my wife insists I shouldn’t, but, because I’m a glutton of sorts for punishment, I do. The words on the left are what the reader wrote. My translation, based on the rest of their comments, follows on the right. I will also add that such reader comments were comparatively rare… but this is my way of suggesting that some few readers are, shall we say… less than perceptive. I say that, because it should be obvious from all the years of writing and comments that, while I do have a fair amount of action, especially in some books, I don’t write action for the sake of action. I write action scenes as a result of what people think, desire, and feel.

Boring: It doesn’t have a fight, murder, battle, or explicit sex in every chapter.

Repetitive: The protagonist actually has a job and responsibilities.

Anticlimactic: No battles or deaths to end the book.

Too much military detail: Forget about logistics, training, and discipline; get on with the slaughter.

Marginal excitement: Not enough battles.

Uninspired: The protagonist succeeded as he planned.

Poor Ending: It has a happy ending.

Pedantic: There’s actually explanation.

Too much political intrigue: Wanted more action

Tedious: Too much detail.

Bland: Too subtle.

Too PC: Women are actually people in the book, and men are portrayed accurately.

Needs editing: Cut out the details and get on with the action.

Disappointing: Not enough action.

Now… those are my translations… and they’re obviously somewhat subjective, but occasionally writers get to be subjective about readers, rather than the other way around.

Denial Culture

One of the biggest reasons why Congress is deadlocked on everything, why the major political parties are polarized, and why people are at each other’s throats over politics and national policies is, in my view, because we live in a culture of denial, based on the feeling that “we” are totally right, and “they” are wrong or totally misguided.

Despite the fact that the purchasing power of the minimum wage is more than 40% lower than it was fifty years ago, and is possibly worth less than that, given the “adjustments” made to the CPI in recent years, conservatives deny that this has created enormous hardship for poor working Americans, regardless of color or class.

At the same time, while the left understands this and wants change, they deny that there are financial and fiscal limits on federal spending with the simplistic mantra that taxes on the super-rich will fund their entire array of social programs.

While I happen to agree with the fact that the ultra-rich need to be taxed more, increasing their taxes even dramatically won’t come close to solving the problem. The current federal debt is over $26 trillion. So far just this this year, the federal deficit is nearly $3 trillion dollars. According Forbes magazine, the total wealth of all 630 U.S. billionaires amounts to $3.4 trillion. That means that even confiscating the wealth of all those billionaires would barely cover the deficit for two years, let alone provide significant additional revenue for major program improvements. Even if you confiscate all the wealth of those worth $100 million, you only add another $3 trillion.

And there are plenty of other denials.

Anti-vaxxers deny the proven efficacy of vaccines, while the extreme right denies proven public health methods, such as masks and stringent social distancing, to control the spread of Covid-19.

The right denies a history of economic, political, and cultural subjugation of both the poor and minorities, while the left denies the problems created by political correctness.

Even though self-esteem movements, rampant grade inflation, and student evaluations have played a major role in dumbing down education at all levels and in turning out the most fragile students in the history of the U.S., too many of whom are largely ignorant of the history of their own country, the liberals refuse to see it, let alone address it, while the conservatives blatantly deny the negative impact of local education funding based primarily on property taxes, which effectively means that “rich” districts almost invariably get better education.

The extreme conservatives deny the human-caused aspect of global warming and the future costs of not slowing or preventing it, while the far left denies the magnitude of the costs of mitigating global warming.

The far left can’t recognize that EVERY form of power generation has environmental downsides, while the fossil-fuel intoxicated conservatives ignore the immense climate and immediate pollution created by excessive and unregulated use of fossil fuels. In fact, the best we’ll ever be able to do is fit the environmentally appropriate power source to the climate, geography, and water resources of the locale it serves.

The right denies that Trump has any significant flaws, while the left did the same for Hillary Clinton.

And both reject compromise, especially significant compromise based on verifiable facts.

How the Democrats Lose the Election

The biggest reason why the Democrats could, and likely will, lose the election [unless they change their campaign tactics] is that they’ve forgotten the basics. The election isn’t about money; it’s not about racial injustice; it’s not about Trump; it’s not about ideology; it’s not about police brutality.

It’s about power.

Now, in the U.S., power isn’t money; power’s not religion or the strength of belief; power’s not guns, or mass movements, or bodies in the streets demonstrating, peacefully or otherwise.

It’s about votes – pure and simple.

Money, ideology, civic involvement can be ways to get votes…but they don’t always translate into votes.

The Republicans have spent almost twenty years working with state laws and governments to make it harder for Democrats to vote. They’ve worked legislatures to gerrymander districts. They’ve just tried to slow down mail delivery for the same purpose.

During the last Presidential election, Hillary Clinton polled almost three million votes more than Trump… and lost. Election scholars have estimated that Democrats have to average 53% of the vote, in general, just to break even with the Republicans.

The second problem Democrats have is that they so far don’t have a single unified message. Trump does. It’s simple – keep America white. It’s not phrased that way, but it’s the basic theme.

The Democrats have lots of good ideas – and they’re still arguing over which one is best. Forget it. Now is the time to agree on a single simple theme – one like “A better life for all working people.” Don’t get hung up on details, just emphasize “a better life” or something else simple and positive that people can get behind. And then work like hell to turn out every possible voter.

An old and very successful political pro, who elected some pretty disreputable characters in his day, made this point to me: You can’t beat someone with nothing. What he meant is, no matter how awful the other guy is, you have to give voters something to vote for, not just something to vote against.

Third, all great ideas mean nothing if you can’t elect enough people to pass the laws to change things. Winning the election comes first.

Finally, most voters, especially the ones most likely to vote dependably, are risk-averse. They don’t like radical proposals, violent demonstrations, shootings, and the like. A recent study of the 1968 elections indicated that riots reduced turnout and likely support for Democrats, while peaceful actions or even peaceful protests improved turnout.

So… Democrats… if you want to hand the election to Trump, keep on with your scattered radical messages, bland unfocused generalities, and claim those messages and all the riots and violent demonstrations are just demonstrating free speech. Being “right” in that way before the election may well insure that you’ll never get the power to actually change things.