Capitalism 2.0 — Part 2
“To Work, Or Not To Work — That Is The Question”
In Capitalism 2.0 — Part 1, I spoke about Business Roundtable (BRT) and its Statement on the Purpose of a Corporation signed by 181 CEOs who commit to lead their companies for the benefit of all stakeholders — customers, employees, suppliers, communities and shareholders. Among other things, it said:
“Americans deserve an economy that allows each person to succeed through hard work and creativity and to lead a life of meaning and dignity. We believe the free-market system is the best means of generating good jobs, a strong and sustainable economy, innovation, a healthy environment and economic opportunity for all”
In this post, I will elaborate on a practical solution for lifting millions above the poverty line — based on combining my Universal Job Guarantee proposal with Warren Buffett’s Earned Income Tax Credit. I call it: “Tax New Deal” — as such a framework allows to escape the minimal wage poverty without unduly pressure on MSBs. But there is more …
In Chapter 10 of my book, AI BOOGEYMAN — Dispelling Fake News About Job Losses — I asked a simple question: if we are serious about guaranteeing citizens’ well-being and keeping ALL INHABITANTS above the poverty line — why not providing Universal Job Guarantee (UJB) instead of Universal Basic Income (UBI)s?
After all, full-time jobs offer far more than financial necessities and the means to put food on a table. Such jobs offer dignity and hope — while at the same time, benefit the entire society at large.
Well-paying jobs in infrastructure, healthcare, education finance, and manufacturing, etc. — are far more beneficial to any society, than dispensing cash, or tolerating unpaid internship jobs to students and recent graduates.
Imagine, all the additional help to sick and an elderly — and not only part-time help provided by the volunteers! Offering help to our teachers in schools and kindergartens, or to municipalities, law enforcement, etc. And perhaps, some of the municipalities will even finally stop FORCING the residents (even seniors!) to clean up the snow from sidewalks — or pay a hefty fine.
As if there was not enough need for such help all around us? Just think about helping the aboriginal communities to build the affordable housing, clean the contaminated drinking water, improve healthcare services and schools’ access — or even to start growing healthy vegetables in the massive greenhouses on the reserve … Yes, it’s time for the Aboriginal Councils to receive result-oriented guidance — instead of boil water advisory …
BTW, Guaranteed Jobs don’t need to come exclusively from the government agencies. With proper policies and legislative frameworks in place — the private sector will rise to the challenge and benefit from it, too!
So, I decided to explore how we can combine Universal Job Guarantees with Warren Buffett’s Earned Income Tax Credit — as this would allow millions to escape minimal wage poverty without an unduly pressure on MSBs. It’s a practical way for the government to create a win-win policy for both: MSBs and their employees.
“The Earned Income Tax Credit is the best way to put money in the pockets of people that don’t fit well under the market system, but that are perfectly decent citizens” Buffett recently told Yahoo Finance.
The Earned Income Tax Credit (EITC) is designed to “benefit for working people with low to moderate-income,” according to the U.S. Internal Revenue Service. And Warren Buffett agrees with me that an expanded EITC is a more productive solution than raising the minimum wage.
By combining UJG & EITC we can adequately provide for those who are “unable to be financially successful in a market economy but who are willing to work”. And the well-paying jobs are far more beneficial to any society, than dispensing UBI cash …
Below is a simple example of UJG & EITC at work:
1. At $12/hour, the 40 hours/week MSB payroll amounts to $480
2. Annually, assuming 52 weeks/year — it generates an income of $24,960
3. If UJG & EITC compensation level is set at $36,000 — the hourly rate amounts to $17.30/hour ($36K / (40*52) = $17.30/hour)
4. In such a case, the EITC Program would provide the additional $5.30/hour in the form of a tax break
Now, I was EXTREMELY surprised by the quantity and the degree of insulting comments sent to me on this very subject. It included: what about the disabled that can’t work, or what about the students? As if I was proposing to eliminate any disability programs, student loans, or scholarships. Oh, please …
Naturally, the companies with $100M+ EBITDA should not receive any payroll assistance — as such are quite able and willing to pay the minimum wage of $17 dollars. But many MSBs can’t! And since 98% of all businesses do fall under the MSB category — offer UJG & EITC where it’s needed the most …
And to characterize the jobs I described as completely “meaningless” and/or “made-up” — didn’t seat well with me, either. Perhaps such remarks were made by the same individuals who would rather seat at home and play video games all day long? After all, if UBI checks are “in-the-mail” — why bother?
To me, protecting the magnificent nature in national parks and conservation areas or cleaning the lakes and rivers from the plastic bottles and other pollutants — is as meaningful as it can be. So, if the UJG & EITC combination suddenly modifies the proverbial “give the man a fish, and you feed him for a day” into a “pay the man to fish, and he will never go hungry” — we all win. Chances are, that millions of hard-working individuals will never go hungry again, either …
But there is more to it. Only 2 days ago you could find the following headlines in many Canadian news outlets, including “The Star”:
“EDMONTON — A Somali refugee has been found guilty of trying to kill a policeman outside a football game as well as four pedestrians who were struck with a U-Haul van — an attack originally investigated as possible terrorism.
Jurors convicted Abdulahi Hasan Sharif of five counts of attempted murder, along with aggravated assault against the officer, criminal flight causing bodily harm and dangerous driving.
The jury didn’t hear about how Alberta’s Integrated National Security Enforcement Team initially investigated the attack as an act of terrorism.
In the days that followed, police revealed that Sharif had been investigated two years earlier for espousing extremist views. An Islamic State flag had also been found in his car”
I don’t know if full-time employment would have made any difference in this case, but I’m sure that having such terrorists engaged in a productive 40-hour week instead of being brain-washed and radicalized by a slew of despicable religious fanatics — wouldn’t heart either …
In Capitalism 2.0 — Part 3, I will cover the enormous challenges and opportunities linked to Climate Change in line with Marc Benioff’s recommendations:
“Globally, few nations are meeting their targets to fight climate change, the current United States presidential administration remains determined to withdraw from the Paris Agreement and global emissions continue to rise. As governments fiddle, there are steps that businesses can take now, while there’s still time, to prevent the global temperature from rising more than 1.5 degrees Celsius. Every company can do something, whether reducing emissions in their operations and across their sector, striving for net-zero emissions, moving toward renewable energies or aligning their operations and supply chains with emissions reduction targets”
Oleg Feldgajer is President & CEO of Canada Green ESCO Inc. Oleg is positioning the company to become a leader in financing AI-enhanced green energy projects and ventures. CGE’s mission is to guide DISRUPTIVE businesses in ENERGY & TRANSPORTATION toward profitable business models. Oleg is passionate about such a mission and firmly believes that without AI-based innovation, we will all prematurely choke on polluted air and dirty water. CGE delivers 100% financing (levered and unlevered) to its clients — and utilizes large equity pools, and non-recourse debt. Oleg offers creative, fresh ideas to open-minded businesses — that embrace both: logic AND opportunistic intuition. CGE stands against mediocrity & its modus operandi is quite simple: If CGE is not invited to join your BOD or Advisory Board — we failed!
