Follow up to Why Trickledown Economics Doesn’t Work.

Now that we have a groundswell of pushback on the 1%, some are giving back. And some f’idiots think this sharing of funds is equivalent to things like, say, paying people a living wage or solving food insecurity.

It’s not.

Remember why trickle down doesn’t work. The real power of a dollar is in how many times it’s spent. Give it to a poor person, and it’s spent immediately, possibly locally. Give it to a rich person, and it’s hoarded, er, I mean saved or invested. If it’s spent, there’s almost no incentive to do so locally.

So when a billionaire gives back to the community, say by building a hospital wing, donating canned goods to a food bank, and so on, they’re still spending the money in a way that doesn’t serve the local economy very well.

Sure, the workers building the hospital wing are getting salaries. But this may be temporary. And are the canned goods locally sourced, or did the rich person buy pallets from a distrubution center or manufacturer that may be hundreds of miles away?

This is how they, the ultra-rich, make it seem like they deserve all the extra funds, because they’ll use some of it to support the community.

Sadly, most are not like Mr. Patagonia who literally gave it all away. Instead, what’s given back is a mere fraction of what they’ve stolen from day-to-day workers.

But.

The time-value of money has an incredible compounding impact. The rich hoarder gets interest or investment returns. Because their money is accruing interest or stock points, it’s gaining value in ways that make other rich people richer rather than helping everyday citizens.

But what if workers got to reap this over the years, instead?

What if Jeff Bezos spread around his stock shares instead of hoarding them? According to a 2021 article in Forbes, something like 90% of his wealth is this stock rather than his $81k/year salary.

What would happen if he sold this stock and gave 99% of it to Amazon employees?

We’ll show all the zeroes because it makes the math a bit easier to follow. This means $27B is $27,000,000,000.

If he kept 1% for himself, he’d get $270,000,000 on top of his $81,000 salary. I don’t know about you, but I think I could make that work 😆.

This means the remaining $26,730,000,000 would be spread across the 1,630,000 employees. To keep the math easy, let’s just say each person gets the exact same bonus. Meaning a bonus of $16,700 each.

This is the equivalent of $8/hr working 40 hour work. Which is higher than minimum wage. And many minimum wage jobs are part-time. Meaning more money per hour for more hours per week.

This. This is exactly why the argument against raising minimum wage because it’s too expensive is utter nonsense. It’s why hiring people part time at minimum wage to save money is bullshit.

This man could take home $270M a year and create an additional 1.6M full-time jobs that pay more than the current federal minimum wage.

But instead, he keeps it.

I gotta wonder how many of these 1.6M Amazon employees are part-time because it’s “too expensive” to hire them full-time. And how many of them have to work at least one or two other jobs just to make ends meet. Or how many of them are on EBT (food stamps) because they can’t find full-time employment?

All because one man can’t bring himself to live on a paltry $270,000,000 a year.

What about a business that’s privately owned instead being traded on the stock market?

Let’s say a mortgage mogul making $1B/year from a Detroit-based company with 20K employees. (Note that this was before the company’s IPO in August 2020).

In this case, the annual income is just that, income. Not stock sales, but money, um, earned.

Keeping 1% for himself would be about $10M per year. I’d still make do. I’m just sayin’.

In this case, though, the remaining funds could be split across far fewer staff members: $990,000,000 split across 20,000 employees is $49,500. Each. Per year. Or better, yet, he could hire an additional 20,000 people at this rate. What do you think that might do to metropolitan Detroit’s local economy?

Back to how this feeds the time-value of money for the average American worker.

The first interpretation of time-value is how much time each worker wastes shuffling from part-time job to part-time job, including how they miss opportunities to work some shifts due to conflicting schedules.

Keep in mind that a lot of part-time jobs don’t have set schedules. Meaning workers have no idea how much they’ll get to work next week, and subsequently have no idea how much they’ll get paid. Then toss in the added stress of never knowing what their income will be, whether their bills can be paid, or if their families can be fed.

The usual definition for the time-value of money is being able to make money by holding on to money. Or maybe by not losing as much money, such as bounced check fees, paying for additional work uniforms, or incurring multiple commute costs instead of working in one location.

Or the health costs of all this nonsense.

This is why other modern nations ensure every worker has a livable income. That everyone can get enough healthy food. And can see a doctor whenever something goes wrong. Maybe even get wellness visits to catch issues before they turn into expensive problems.

The USA is the only rich nation that doesn’t support it’s workers.

We’re the only ones who believe treating workers with dignity and respect is socialism. We’re the only ones too stupid to know it’s good business, not socialism.

Why is it good business? Because people who make enough money to live comfortable lives spend more on discretionary purchases. They make enough to be the good little consumers capitalism depends on.

In other words, smart leaders know that forcing huge swaths of the working population into austere living conditions means businesses have fewer customers, which almost always means less profit.