Big Picture – Missed Completely

A town's two largest employers are a factory (100 workers) and a public school (50 workers). Most of the jobs in the school are white-collar jobs. If we set the average salary at $50,000 for a worker at the school and throw in some benefits, in the school this sets the wage standard for the town.

The factory worker makes on average, 20% less, $40,000 a year, and some benefits, not as cushy but livable, she doesn't have a college degree, and so that's reasonable that her wage would be lower.

Now the factory workers cry "FOUL, the teachers make too much money – they are making our property taxes too expensive." So the school district lowers the wages and benefits for the teachers 10 %. Teachers now make $45,000. We've now saved $250,000 in tax money -- or so we think.

The factory, being a business and always examining the profit margin thinks: 'If the teachers in our town just take the pay cut and are doing 'fine' then we can cut the pay of our workers, we'll manufacture some crisis – commodity prices have fallen, or the cost of transportation has gone up with the gas prices – and so now the factory workers make $36,000 – it's either that, or we lay off workers'.

So the factory workers agree – they don't want to be responsible for their shift buddy losing his job.

Now the factory worker is eligible for state-financed healthcare (she has three children and is a single mom) and reduced lunch prices from the federal government costing the state and the feds $8,000 a year in their revenues.

In addition, the teachers and the factory workers are spending $650,000 less in the small businesses in town, so three more businesses fail, some jobs are lost.

Now everyone has to drive farther for goods and services and buy from big-box stores rather than the local guy, sending money out of the community and making more need for low-wage no-skill, retail jobs.

Where do the local displaced workers go to find a job? To the retail store which pays minimum wage and hires them at 35 hours a week so they have to apply for more state and federal benefits.

Lowering wages for public workers does not reduce taxes. It only shifts tax needs from one pot to the other.

Now I'm not suggesting that teachers should be making six figure salaries or be getting more than they deserve, but realize that when you lower the wages for one group of workers in a town, other wages fall like dominoes. When you reduce the taxes in one area, another area will pay.

As my high school Economics teacher repeated every day, "There is no such thing as a free lunch."

And yes. I am very cynical.