Trickle Up Poverty (32 page)

Studies conducted by David Neumark of the University of California, Irvine, indicate that the effects of living wage laws are often harmful for the populations they’re supposed to help. In general, even when wages are as much as 50 percent higher than the federal minimum wage, no increase in income levels is realized by those employed. Such laws also reduce unemployment among unskilled, low-income workers by only 3 to 6 percent. This despite the fact that the percentage of unemployed workers that fall into this category ranges from 15 to 25 percent depending on the area surveyed.

It’s a miniscule improvement that has other consequences that are insidious, among them the fact that, because the wages they’re required to pay are so high, many contractors hire skilled workers instead of unskilled labor, because skilled workers can be utilized in a number of ways, unlike unskilled workers. In addition, many potential contractors decide to opt out of such projects, meaning there’s less competition in bidding for the work. This translates into higher costs for the government, which in turn manifest as greater pressure on what is required of taxpayers.28

The consequences of living wage legislation aren’t simply measurable by statistics, though. In Oakland, California, the city invested more than $100,000 in improvements to a 3,000-square-foot restaurant location. Because the city had invested that much money in the location, this particular spot, which was being offered to restaurant companies as a location where they might open a new facility, was bound by living wage laws. Other Oakland restaurants were not operating under the same restrictions. The result?

Eight potential bidders to open a restaurant at the location decided that the additional $175,000 to $225,000 a year in operating costs that would result from their having to pay employees because of living wage laws made the project unworkable for them. Oakland’s other restaurants, because city taxpayer money had not been invested in their properties, are not required to pay a “living wage” to their employees; trying to compete with other businesses not bound by the same rules is simply not feasible, and so another employment opportunity is lost to Oakland residents.29

One commentator describes ACORN’s tactics and ties it to the financial irregularities in the group’s accounting:

“In Baltimore, the group stormed banks in an effort to shut them down over foreclosures, sought to physically disrupt auctions of foreclosed homes on the steps of the courthouse and, while television cameras rolled, broke the padlock on a foreclosed home in an effort to reclaim it for its owner. Is it any wonder that its tax advice wasn’t by the book?”30

Among other concerns that arise when living wage legislation is considered are the effects on wage-earners’ eligibility to receive other benefits. The proposal to implement living wage laws in New York City brought up this possibility:

Especially in cities like New York with a high cost of living, low-wage earners and their families often depend on public support in order to get by from month to month. For example, they may receive Medicaid, food stamps, or help with rent. But these programs are only available to families with very low incomes, and so the wage hike being proposed could potentially make families ineligible for benefits that they used to receive. Moreover, higher earnings will very likely mean higher taxes, as well as lower tax credits (such as the Earned Income Tax Credit). The fear, then, is that the families we

are concerned about might actually end up worse off under the living wage law.31

But the living wage movement also impacts the quality of life of those where such laws are in effect in other ways. One of the consequences of such legislation is that it either keeps companies such as Wal-Mart and other big box retailers out of the areas where the laws are in effect, or it drives them out after they’ve located there. This means that, not only are residents of such areas denied employment opportunities, they’re also penalized by not having access to the low priced goods that outlets such as Wal-Mart provide. Living wage laws, which broadly apply to any companies contracting with cities to do work, also dramatically raise the cost of such contracts. Because of this, they tend to level the playing field for labor unions, making them “more competitive” with nonunion contractors.

The Obama administration isn’t content to let the living wage campaign be conducted only on the local level, though. In yet another example of the president’s support for radical socialist causes, there is news of “a plan taking shape in the White House to rewrite federal contracting rules to give bidding advantages to those companies that pay higher wages and offer more health and pension benefits to workers in unskilled jobs—from janitors and landscaping crews to cafeteria workers at federal facilities.”32

In other words, the president is nationalizing what had heretofore been only local initiatives to keep, especially, inner-city minorities enslaved as members of the permanent underclass. As unproductive as the results of the campaign have been in our cities, the president is determined to nationalize yet another failed leftist agenda item.

Driving Big Box Retailers Out of Cities

In addition, though, to keeping inner-city residents on the “reservation,” so to speak, the policies supported by Obama harm the chances of our nation’s poorest for gainful employment that might make it possible for them to move out of the inner city or better their lives there and, as I’ve mentioned, also diminish their quality of life by reducing their access to low-priced goods. In the more than eighty cities that have implemented living wage laws, one of the effects has been to discourage companies such as “big box” retailers like Wal-Mart from locating stores in inner city areas.33

One of the ways ACORN has found to keep such retailers from locating in areas where they would compete with union shops and businesses that are required to pay a “living wage” is to stage demonstrations against them. Gregory Hession describes how ACORN manages such protests:

ACORN partners with wealthy trade unions that pay ACORN large sums of money to organize a labor protest. ACORN, in turn, hires protestors, paying them poverty-level wages with no benefits, to agitate against Wal-Mart and other retailers for allegedly paying poor wages and no benefits. Ironically, those ACORN picketers often earn less than the ones inside the retailers that are the object of the picketing.34

In fact, picketers working for ACORN and other advocate groups typically earn less than the federal minimum wage and less than employees of the companies against whom they’re picketing. Why am I not surprised? On one protest site in Nevada, picketers were making $6 an hour with no benefits to walk around in the blazing sun for five hours a day, with two ten-minute breaks. In the Wal-Mart against which they were picketing, workers were being paid $6.75 an hour and enjoyed air-conditioning in the workplace. ACORN “seeks exemption from paying minimum wage increases which it demands from employers it pickets, has to be forced by government to pay overtime to its employees, completely misses wage payments to many of its workers, and engages in union busting tactics against its own workers who are agitating for unions at places like Wal-Mart for sub-par wages.”35

One of the unions that hires ACORN to do its dirty work is the United Food and Commercial Workers International Union (UFCW). In fact, the UFCW has a vendetta against Wal-Mart. The headline of a screed on its website cries, “How Much Is Wal-Mart Scamming Your State.” The ironies are devastating. Even as labor unions are receiving exemptions from the so-called Cadillac Health Care Plan tax, the UFCW rails against Wal-Mart for “using tax loopholes and fancy accounting schemes” to avoid paying its fair share of taxes, this while they essentially seize dues from their members’ paychecks, demanding obeisance from the workers they “represent.”36

One commentator sums up the situation succinctly:

You can understand how living-wage legislation might seem reasonable to local legislators, so many of whom have never worked in the private economy. It puts money into the pockets of hardworking low-wage employees at no cost to the city treasury. To oppose it would make you seem like a fat-cat, top-hatted robber baron who relishes the oppression of starving workers. On the other side of the equation, how many city councilmen would understand the thick pile of studies from liberal as well as conservative economists showing conclusively that big hikes in the minimum wage ultimately kill low-wage jobs, as employers replace now-expensive receptionists with newly cost-effective voice-mail systems, say, or pile more duties onto experienced employees instead of hiring additional low-wage beginners?

And how many councilmen would understand that increasing the costs of city contractors today will require them to raise the prices they charge the city tomorrow, requiring eventual tax hikes that will drive employers—and jobs—out of town to cheaper locales, isolating the poor who are left behind? 37

The push for so-called “living wage” legislation by ACORN and other leftist groups is a perfect example of just how fatuous and dangerous community organizer “causes” can be. That’s not only for the companies and local governments they target, but for the people they’re designed to help as well.

With friends like ACORN, America’s minorities don’t need enemies.

Democratic Voter Fraud

While ACORN is certainly the most public leftist entity implicated in voter and tax fraud, in fact, it’s only part of the picture. Marxist activists have for decades been organizing and plotting a stealth overthrow of the U.S. government, and the election of Barack Obama, which was engineered on a foundation of electoral fraud and voter intimidation was seen by the left to represent the opportunity they’d been seeking for the better part of a century.

In order to seal the deal, they needed to perpetrate election fraud far beyond merely fabricating voter registration documents, although ACORN, with the Democratic candidate’s full knowledge and implicit approval, was happy to oblige with that. Barack Obama, having cut his political teeth on election fraud, was more than willing to implement many of the techniques he learned in his community organizer days to put his campaign and those of other Democrats he needed to push his agenda over the top.

In September, 2007, Obama declared, “If I am the Democratic nominee, I will aggressively pursue an agreement with the Republican nominee to preserve a publicly financed general election.”38 Earlier in the year, he’d badgered John McCain to agree to the same terms and they’d figuratively shaken hands on it.39 In one statement, Obama explained that under his plan “both major party candidates [would] agree on a fundraising truce, return excess money from donors, and stay within the public financing system for the general election…. If I am the Democratic nominee, I will aggressively pursue an agreement with the Republican nominee to preserve a publicly financed general election.”40

Of course, that was the furthest thing from Obama’s true intentions.

With Obama, you have to watch what he does, not what he says.

It quickly became apparent to his campaign that to limit his fund-raising to public financing would also severely limit the ways it could game the system. The Democratic candidate, as he has done so often in his political career, reneged on his pledge and went full speed ahead with a campaign finance strategy that included accepting money from “bundlers.” These bundlers put together packages that included, in many cases, illegal contributions from foreign donors, and rigging credit card screening in ways that disabled the capability to check the identities of those contributing by credit card.

“Bundling,” a practice perhaps unintentionally encouraged by the McCain-Feingold Campaign Finance Reform legislation in 2002, allows a single individual to collect together small donations from individual donors and “bundle” them together in one contribution. It’s the “practice of pooling together a large number of contributions from PACs and individuals in order to maximize the political influence of the bundler and the interests they represent. Most often, the bundler is a corporate executive or lobbyist, with expectations of something in return.”41

In an age in which the amount of money raised often determines a candidate’s political viability, bundling has become one of the chief methods of raising cash. In the 2008 presidential election, bundling accounted for more than 25 percent of all the money raised by Barack Obama and John McCain. And because the names of those bundling campaign contributions are not required to be disclosed, the process is ripe for manipulating.42

In one case, tens of thousands of dollars were contributed to the Obama campaign by one Monir Edwan, a bundler from the town of Rafah in the Gaza Strip. Monir had raised the money he sent Obama by selling Obama T-shirts to young Arabs for the princely sum of $9 each, a great deal of money for impoverished Gazans.43 Although it is illegal for presidential candidates to accept contributions from foreign nationals like Monir, such support poured in to the Obama campaign from over fifty countries, often in the form of small donations from contributors “with names such as ‘Hbkjb,’ ‘jkbkj,’ and ‘Doodad.”44 Perhaps the contributions from those suffering under terrorist rule in Gaza reflected their sense that the candidate they were supporting would turn out to support their hatred of Israel and their wish to eliminate the Jewish state.

Credit card fraud was one of the tactics of choice used by the president to swell his campaign coffers. Not only did the Obama campaign corrupt the system through its practice of accepting bundled contributions from foreign donors, they also employed the tactic of disabling identity checks on credit card donors in order to allow multiple contributions by single donors that exceeded the limits election law said they could donate. Normally, when systems are set up to accept credit card payments, protocols are put in place to confirm that the identity of the person making the payment matches the one to whom the credit card is assigned.

Commentator Tom Blumer explains in the case of the Obama campaign, it’s “virtually impossible that the system for accepting card contributions was inadvertently set up without adequate controls, and almost certain that existing controls were instead deliberately disabled to create untrace-ability.” The total amount thus collected very likely ran to tens of millions of dollars.45