Frugal Friday: Who’s Worse – Wal-Mart or the Government?
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Happy Friday party people! It’s been a great week and it looks like Spring (errr Summer) is finally upon us. Just two weeks ago we were getting snow and this week I had to break down and turn on the air conditioner as it reached 102 degrees. Anyway, that’s beside the point. Today I want to draw our attention to an article I read on NBC News about the federal government and its basic funding of low wage jobs. I have written before of How to Spend Money Like the Government and What the Government Teaches Us About Living Without a Budget and this article stood out to me right away. The article discusses a study that shows how the government is funding, through various federal programs, nearly two million jobs at an hourly rate of $12.00 or less. That’s more than Wal-Mart and McDonald’s combined, which offer 1.5 million jobs paying the same wage. What the article goes on to point out is that many of these employees are unable to make ends meet at the income level provided by these jobs and subsequently find themselves relying on government assistance programs, like Food Stamps in order to make ends meet. I know that this can bring up the topic of minimum wage and whether or not it should be increased, but that is a different topic for a different time. The thing that stood out to me in this article was how broken this system is and what it means to us as a whole.
The main thrust of the article points to the fact that the companies receiving the benefits from these programs are mandated to “uphold high employment practices including prevailing wages within a particular area of work”. The jobs that have resulted from these programs cross many sectors from retail to manufacturing, but the common thread is that many of them are not looking to provide decent paying jobs, but to cut costs. The study argues that while the firms involved are expected to provide these solid jobs they’re not abiding by what’s expected of them and are just helping contribute further to the wage gap. To be honest, I can see the issue from both sides and believe that it’s not just the government to blame or just corporate America to blame, but both share the blame and likely to an equal extent. On one hand, the government is funding a program that is disastrously broke that is likely only leading to individuals leaning on additional government programs to help put food on the table. However, many of the firms receiving these direct benefits from the government are not abiding by the supposed terms of the agreement and are instead likely cutting costs and one has to question where the extra benefits are going. If you believe what the article has to say then it’s possibly going to the firm itself or the powers that be at those firms. Whatever the distribution of the blame each side shares, the brutal truth is that the program is broken. There is hope that there will be hearings on the issue, but one can only think that will be unlikely to solve the issue.
The larger problem I see, and one that the article touched on is the growing issue of low wage jobs here in the States. The article cited a study which said that three out of five jobs added after the recession have been low-wage jobs while only one in five were of the same variety before the Recession. As we’re typically not a nation of savers there is concern in this and one that is not really new to me. Being in a low-wage job does make saving and investing more difficult, but it’s not impossible. What it requires is creativity and the ability to make difficult choices that are aligned with appropriate liabilities. The challenge of this though is how to do this if you’re on a government program and being in a situation where those programs may not necessarily incent people to save and enable themselves to move out of the situation they may find themselves in.
Ok, enough of my ramblings. It was another great week in the blogosphere and I was able to read some great blog posts. If you have the time this weekend I encourage you to check out some of the blog posts I’ve selected.
Blog Post of the Week
Gee, Can I Please Walk Over a Bed of Hot Burning Coals? on The Frugal Farmer
I love Laurie’s honesty and transparency in this post, probably because I can relate so well to it. Laurie describes the choices she and her husband have made to embrace extreme frugality in order to conquer the mountain of debt they’re facing. As Laurie notes, the easy thing to do would be to throw their hands up and do the minimum or even declare bankruptcy. I’ll admit that was a feeling I dealt with when I was in debt and bankruptcy was something I wanted many days. However, Laurie and her husband have their eyes on what really counts, their future and, more importantly, their children. Children are sponges and I am confident that what their children are seeing AND learning is the importance of integrity and hard work needed to accomplish a goal that feels insurmountable at times. If you’ve not been to Laurie’s site before, I encourage you to do so as she has quickly become one of my must reads.
Other Blog Posts That Ruled
Dear Parents, Charge Your Kids Rent on Broke Millennial
TIME Magazine Millennial Cover: The Millennial Bias on A Young Pro
Your Credit Cards Are Paid Off, Now How Do You Stay Out of Debt on Eyes On The Dollar
Engagement Ring Shopping Tips on Money Smart Guides
What Advice I Would Give to my 23 Year Old Self on Retire By Forty
Should You Lend Money to Family and Friends on My Personal Finance Journey
Guide to Starting a Blog on Modest Money
Investing – What’s the point? on Make Money Your Way
Odd Search Terms
How to get Rick fast…Start running!
Can you walk into Wal-Mart without buying anything? If you’re smart you won’t even walk in!
Do I need life insurance if I am rich in Australia? I don’t know, you may want to ask Glen on that one.
I’m happy…Well good for you!
I don’t trust my stockbroker, should I? Like I would trust an ex-con staying in my house!
What makes me scratch my head so much? Can I suggest an investment in some dandruff shampoo?
Why am I always scratching my head? Looks like you need to make the same investment as the person above!
What are your thoughts? Does it surprise you that the government is funding more low-wage jobs than Wal-Mart and McD’s combined? Do you have anything fun planned for the weekend? I’ll be celebrating our twelfth anniversary by going out on a date night tonight!
Photo courtesy of: Vincent Chen