Marcus Miller, CEO of Miller Enterprises, was signing paychecks one day while his bookkeeper was on vacation when he discovered an honest oversight: he had not given Florida “Flo” Robinson a raise in nearly two years. Now she is suing him.
Flo Washington works late hours, long after Marcus Miller has typically left. The two seldom see each other, and Miller forgot that she had converted to an employee after the janitorial service she worked for had laid her off. Miller bumped her pay from $12 per hour to $14 per hour and left that day feeling better about himself. When he arrived at work the following Monday morning, Miller found a visibly disturbed Flo Washington waiting for him in his office.
When Miller walked into his office, Flo handed him the check back, saying she could not accept it. Miller launched into a confession about how she deserved a raise, she had done a great job, and he felt horrible for not doing this sooner. Flo cut him off and said, “You can’t give me a raise. If I make too much, I’m gonna lose my benefits,” and refused to accept the check. Miller was speechless but then insisted she keep the raise because she earned it. He was also concerned that if the only employee to not receive a pay increase in the past two years is African-American, Miller Enterprises would wind up getting sued by the Department of Labor. Flo stormed out of the office, and one week later, a letter threatening a lawsuit did arrive, but not from the Department of Labor, from Flo Washington’s loud attorney.
“Old white men handin’ out raises to low wage African-American wage earners is just another form of institutional racism aimed at keepin’ black folk down,” yelled civil rights attorney James Jones through a megaphone at TV cameras outside Miller Enterprises’ headquarters. Jones, who formerly worked for the National Association for the Advancement of Colored People, went on to yell, “How’s a hard workin’, single motha’ like Flo Washington supposed to advance in this country when you got old white males like Marcus Miller raisin’ her pay and makin’ her lose her benefits?” A roar of voices affirming Jones’ words came from a crowd of picketers demanding the reduction of Washington’s salary.
“Working people like Flo Washington subsist off their subsidized rent, subsidized food, supplemental income, Obama phones, and other benefits,” a quieter Jones explained to a newspaper editor. “When their compensation increases, the government starts taking those things away, and you wind up marginally worse off. If Mr. Miller’s intentions are to reward Ms. Washington with a net pay increase, he should recalibrate her salary to $45,000. Anything less is a pay cut!”
Flo Washington’s economic situation is not unique; all across the country, aspiring, low-wage workers face what is commonly called the “Benefits Cliff.” This exists when an incremental increase in compensation leads to an even larger corresponding decrease in benefits, effectively punishing an employee for earning a higher salary. Critics point to the Benefits Cliff as just another economic policy implemented by liberals that has the effect of punishing ambition, achievement, hard work, and keeps poor people poor.
NewsSkunk interviewed several liberal economists who rationalized Benefits Cliff disincentives as a net positive for the lower class. While they concede disincentives keep some poor individuals from improving economically, they are likely to continue to vote for Democrats. And Democrats are more likely to maintain benefit programs that, to paraphrase Benjamin Franklin, are designed to “keep poor people comfortably poor.”
As for CEO Marcus Miller, he tried to settle the suit by offering Ms. Washington the choice of working for $12 or $14 per hour. Ms. Washington chose neither option after a local advocacy group advised her she would be better off unemployed. When asked if he regretted giving Ms. Washington the raise, Mr. Miller replied, “I won’t make that mistake again.”
