'Workers drive economy, not billionaires': Woman explains free market is rigged to favor the rich
Erin pointed out that the rich tended to hoard cash while working class people always spent their money, adding value to economy.
America is at a crossroads with the working class rising up to protest starvation wages, lack of benefits and poor working conditions. The income inequality divide is growing bigger every year and while the rich get richer, the poor are getting poorer. It wasn't supposed to be this way. The boomer generation certainly got to live out the American dream but with time, wages stagnated even as inflation rose. Politicians and business owners decried and lobbied any attempts to increase the minimum wage, leaving the working class struggling to put food on the table, and a roof over their heads. Trickle-down economics has been a colossal failure. The original reasoning was that tax breaks given to the rich would eventually trickle down in the form of reinvestment into the business and subsequently create more jobs. A study by the London School of Economics revealed that almost 50 years of tax cuts to the rich have benefitted no one but the rich, reported CBS News.
While giving tax breaks has failed repeatedly, politicians are in no mood to change their ways. One concerned Twitter user, Alexandra Erin, pointed out that it was basic economics to invest in the working class rather than the billionaire class. She posted a Twitter thread explaining why and it just makes so much more sense. Here's why Erin believes the working class drives the economy and not the rich:
1.
Conservative economists are so embarrassing. You're almost 63 years old and you still believe in the invisible hand of the free market? Okay. Most of us outgrew imaginary friends before we hit the double digits, my dude.
— Alexandra Erin (@AlexandraErin) July 22, 2018
2.
"I'm gonna give tax breaks to big companies because they are job creators," says the hayseed of an economist.
— Alexandra Erin (@AlexandraErin) July 22, 2018
The big company says, "Sure, kid." and pays the money out to its wealthy stakeholders, who have nothing to spend it on and pocket it.
"I helped!"
3.
Here's some economic reality: if you can give a dollar to a billionaire or you can give it to a minimum wage worker, give it to the minimum wage worker every time.
— Alexandra Erin (@AlexandraErin) July 22, 2018
The billionaire will still get it. Because the worker will spend it, generating economic activity.
4.
Let's go sub-minimum wage. No wage. Give the dollar to someone who is broke. Destitute. Indigent. They'll spend it immediately, probably giving it to a business that employs minimum wage workers.
— Alexandra Erin (@AlexandraErin) July 22, 2018
5.
That's a dollar of business for that business. That business has taken in an extra dollar. It pays its workers in part with that dollar. The workers, making minimum wage and living paycheck to paycheck, immediately spend their wages. The dollar climbs higher up the ladder.
— Alexandra Erin (@AlexandraErin) July 22, 2018
6.
The dollar you gave the homeless person will keep being spent and keep climbing up the economic ladder until it comes to rest in fractions in the pockets of the wealthy investor class you wanted to give it to in the first place.
— Alexandra Erin (@AlexandraErin) July 22, 2018
7.
Along the way it has generated more than a single dollar's worth of GDP.
— Alexandra Erin (@AlexandraErin) July 22, 2018
Now, you've got this keen theory that when it hits the pockets of the billionaires, they're going to invest it and it will become jobs.
8.
Maybe you're right!
— Alexandra Erin (@AlexandraErin) July 22, 2018
And maybe that dollar will, for the first time in recorded history, "trickle down" in any kind of meaningful fashion. It's bound to happen sooner or later, right? Right? It's got to work sooner or later!
9.
But even if you're exactly right and the billionaire's going to do magical things with that dollar that's good for everyone, it still makes more sense to inject the money at the bottom of the economy than the top. Because it will still wind up at the top, but work all the way up.
— Alexandra Erin (@AlexandraErin) July 22, 2018
10.
The same people who talk about "trickle down economics" also say "a rising tide lifts all boats". But tides don't rise from above, my dudes. That's not a tide. That's rain. Rain doesn't lift boats.
— Alexandra Erin (@AlexandraErin) July 22, 2018
11.
Give economic relief to people who are living hand to mouth and they will immediately spend it, enriching themselves with whatever they spend it on. And the person or business they give the money to is enriched. And whoever they pass it on to is enriched.
— Alexandra Erin (@AlexandraErin) July 22, 2018
Erin points out that the current economy starves the consumers, leaving them with no money to pump back into the economy. She also made the demarcation that it wasn't the existence of businesses that created jobs but rather the act of doing business that generated jobs.
12.
Businesses don't create jobs.
— Alexandra Erin (@AlexandraErin) July 22, 2018
Business creates jobs.
Businesses can't do business if they don't have customers. Customers can't do business if they don't have money. We've built a consumer economy and our great economists keep advocating we starve the consumer class.
13.
The secret to keeping the engine of capitalism running for a million years would be: keep redistributing the money. Keep it circulating. When a dollar reaches the top kick it back to the bottom. Jeff Bezos still has his Amazon and whatnot but the money keeps moving.
— Alexandra Erin (@AlexandraErin) July 22, 2018
14.
There's this whole argument about whether wealth is earned or distributed but honestly it is created. That's the simple truth. The difference between wealth and mere resources is that wealth requires synergistic interactions to make the resources more than they are on their own.
— Alexandra Erin (@AlexandraErin) July 22, 2018
15.
And while there's certainly a tipping point where the returns vanish, allowing more interactions creates more wealth.
— Alexandra Erin (@AlexandraErin) July 22, 2018
16.
You don't want to literally have an ouroboros of money where billionaires keep emptying their wallets into the streets? Then just pay everybody enough money. Living wages, universal income, guaranteed jobs, however you want to do it. Put money back in circulation.
— Alexandra Erin (@AlexandraErin) July 22, 2018
17.
Top heavy capitalism will collapse under its own weight every time. Money has to circulate for the thing to work. And when it circulates, there's more wealth. Not just more money (that's inflation) but more wealth. More prosperity.
— Alexandra Erin (@AlexandraErin) July 22, 2018
A recent report showed that corporations were swinging money into their pockets instead of paying their workers a sustainable wage. A report by the Center for Economic and Policy Research found that the federal minimum wage would have stood at $26 an hour today if it had kept up with the economy's productivity over the last 50 years, reported CBS News. Today, the minimum wage stands at $7.25, which means for every employee paid that much, the corporations get to pocket the difference in wages. Republicans continue to scoff at the idea of raising the minimum wage to $15 dollars, let alone $26. "We have seen that complete divorce between wages and productivity and massively increased inequality with most gains going to people at the top," said Ken Jacobs, the chair of the University of California, Berkeley Center for Labor Research and Education.
Corporations right now:
— Dan Price (@DanPriceSeattle) January 12, 2022
🤑Laid off staff in 2020
🤑Received generous gov bailout
🤑Use myths of great resignation and labor shortage to understaff
🤑Shovel work on people that don’t have a better option
🤑Use the myth of inflation to raise prices
Result? All time record profits
Even as companies cite inflation to increase prices, many are still reluctant to increase the wages of employees. Thousands of employees are quitting their jobs over poor pay and benefits in what has been dubbed the "Great resignation." Gravity Payments CEO Dan Price said companies who were paying a decent wage were experiencing employee retention and record-low resignations as opposed to those paying starvation wages. “Companies that are investing in employees, companies that are following that age-old norm that we know is the right thing to do, investing in your people, they’re not experiencing The Great Resignation. And so, some people have called it ‘a great reckoning,'” he said, reported News Nation Now.
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