The Adjusted Normal, 3.On How to Spread the Money.
I had planned to go cut my hair and turn it blue again this month, once it was safe to do so. I'll have to put it on hold again, at least until next month.
It's the same old story of deciding which purchases are the more urgent, and which can take a back seat. Or deciding between this pleasure and that pleasure. The pleasure of having my hair at a decent length that doesn't get in my eyes, tends to go to the back of the line. The pleasure of a different color even further back.
The lockdown has not helped our finances, nor those of many, many others. Thankfully, my husband has not had to apply for unemployment. During the two weeks everybody except strictly essential workers were at home, his pay was guaranteed. But my classes and my income stopped, resuming by phone at a fraction of what they had been earlier. Our daughter still had to pay the rent and eat. Now, she's taking up driving lessons in one final push to see if she gets coordinated enough to pass the driving exam. It all takes money, and less is coming in.
The government set up an Ingreso Mínimo Vital (Minimum Living Income) for those who have run out of their unemployment pay, or who simply could not find any kind of job, or whose terms of employment did not let them access unemployment benefits. The amount the beneficiary receives depends on their worth, their income, the number of family members, and how many minors are in the family. People can work and receive this benefit, though once the income is considered sufficient (and there are very specific tables where this is figured out), the benefit is taken away. I don't believe we can receive this benefit, after looking at all the requisites. Still, it's nice to know it's there in case we ever do need it.
Conservatives in the government and outside the government call this a freebie handout that is wrong and will get people accustomed to sponging off the tax payers' money. They would prefer the money go to companies, large and small, to stimulate the economy through them. But it doesn't work that way.
A hypothetical case: a family has just enough income to eat basic food (pasta, milk, and legumes from the food bank, and a few vegetables bought at the supermarket each month, meat once a month), and pay basic bills. The wife discovers a hole in her shoe. A new pair would cost around fifty euros. She could invest the fifty euros in shoes, or she could pay the electric bill. She decides to pay the electric bill and stuffs a plastic bag in the bottom of the shoe. If the family were receiving the minimum income benefit, as well as the salary she or her husband is making, she would spend the fifty euros. The shoe store would make one more sale. The company that made the shoes would receive payment for another pair, and that income would help make payroll. The extra money that family receives would go back into circulation almost immediately, contributing to other families, and, through taxes, to basic services provided by the government.
Economic stimulation happens only when the bottom layers of wage earners spend money. Customers create a demand, which is met by companies, which, if they are at all conscious of their true role in society, will meet the demand not only with a product, but also by extending the wealth they produce among their own workers, and society through taxes. It doesn't mean the company can't make a profit, but that it is socially responsible. When a large corporation receives the stimulus directly, the money generally goes to shareholders and CEO's. It doesn't get re-invested into creating more demand. It only creates more riches for the company itself, while it's own workers might even lose their jobs because there is no demand for the product.
So, I say the Minimum Income is a good idea. We may not avail ourselves of it, but many who need it will have it. And the economy will be helped out by people who now have more money to buy what they need, create demand, create jobs, and, eventually, help buoy the economy so they can earn decent salaries once more. It's a long-term proposition, but it's the correct start.
I'll just wait another month for my hair cut.
Life continues.
It's the same old story of deciding which purchases are the more urgent, and which can take a back seat. Or deciding between this pleasure and that pleasure. The pleasure of having my hair at a decent length that doesn't get in my eyes, tends to go to the back of the line. The pleasure of a different color even further back.
The lockdown has not helped our finances, nor those of many, many others. Thankfully, my husband has not had to apply for unemployment. During the two weeks everybody except strictly essential workers were at home, his pay was guaranteed. But my classes and my income stopped, resuming by phone at a fraction of what they had been earlier. Our daughter still had to pay the rent and eat. Now, she's taking up driving lessons in one final push to see if she gets coordinated enough to pass the driving exam. It all takes money, and less is coming in.
The government set up an Ingreso Mínimo Vital (Minimum Living Income) for those who have run out of their unemployment pay, or who simply could not find any kind of job, or whose terms of employment did not let them access unemployment benefits. The amount the beneficiary receives depends on their worth, their income, the number of family members, and how many minors are in the family. People can work and receive this benefit, though once the income is considered sufficient (and there are very specific tables where this is figured out), the benefit is taken away. I don't believe we can receive this benefit, after looking at all the requisites. Still, it's nice to know it's there in case we ever do need it.
Conservatives in the government and outside the government call this a freebie handout that is wrong and will get people accustomed to sponging off the tax payers' money. They would prefer the money go to companies, large and small, to stimulate the economy through them. But it doesn't work that way.
A hypothetical case: a family has just enough income to eat basic food (pasta, milk, and legumes from the food bank, and a few vegetables bought at the supermarket each month, meat once a month), and pay basic bills. The wife discovers a hole in her shoe. A new pair would cost around fifty euros. She could invest the fifty euros in shoes, or she could pay the electric bill. She decides to pay the electric bill and stuffs a plastic bag in the bottom of the shoe. If the family were receiving the minimum income benefit, as well as the salary she or her husband is making, she would spend the fifty euros. The shoe store would make one more sale. The company that made the shoes would receive payment for another pair, and that income would help make payroll. The extra money that family receives would go back into circulation almost immediately, contributing to other families, and, through taxes, to basic services provided by the government.
Economic stimulation happens only when the bottom layers of wage earners spend money. Customers create a demand, which is met by companies, which, if they are at all conscious of their true role in society, will meet the demand not only with a product, but also by extending the wealth they produce among their own workers, and society through taxes. It doesn't mean the company can't make a profit, but that it is socially responsible. When a large corporation receives the stimulus directly, the money generally goes to shareholders and CEO's. It doesn't get re-invested into creating more demand. It only creates more riches for the company itself, while it's own workers might even lose their jobs because there is no demand for the product.
So, I say the Minimum Income is a good idea. We may not avail ourselves of it, but many who need it will have it. And the economy will be helped out by people who now have more money to buy what they need, create demand, create jobs, and, eventually, help buoy the economy so they can earn decent salaries once more. It's a long-term proposition, but it's the correct start.
I'll just wait another month for my hair cut.
Life continues.
Tés razón. A economía baséase na circulación dos cartos. Esa circulación é a que crea empregos e levanta a economía.
ReplyDeleteFan máis cincocentos euros nunha familia pobre que cinco mil nunha familia rica.