Corporations Already Provide What Sen. Warren Decrees by Force

Corporations Already Provide What Sen. Warren Decrees by Force
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“This wage war isn’t winnable.” Those are the words of Ann Harten, human resources chief for Holland, MI-based corporation Haworth. She was describing the challenges of finding good employees to Wall Street Journal columnist John Stoll. Haworth’s solution has so far been nicer amenities along the lines of better bathrooms, along with work options that include Fridays off.

Readers can rest assured that Haworth won’t be unique in its offering of a four-day workweek. The bet here is that the latter will become very common in the coming decade as a consequence of worker-productivity surges (thank you, automation) alongside intense competition for human capital. The other bet here is that this profound change whereby 3-day weekends become the norm will birth what will be called “The Entertainment Economy.”

The future of work will be defined by rising pay in concert with reduced hours earning that pay. The result will be soaring demand for entertainment and travel, and exciting jobs that will be an effect of workers having more money and more time to spend it. Jobs that don’t seem at all like work will become common. “They pay you do to that?” will be so regularly asked as to become a cliche.

Regardless of what happens, Haworth’s use of perks to attract workers are a worthwhile way to address Sen. Elizabeth Warren’s promise (if elected president) to provide “universal, free public college,” along with federal forgiveness of up to $50,000 in student loan debt in households with total earnings of less than $100,000. 

That presidents can’t offer trillion dollar programs, or even $1 programs without Congressional approval doesn’t seem to bother Warren. Nor any presidential aspirant for that matter. But that’s a digression. What’s important for the purposes of this piece is that Warren is offering voters things with the money of others. She (with Congress’s assent) can provide these goodies only insofar as private actors created the taxable wealth to pay for them first.

In short, Warren is offering voters nothing. The wealth was already created. She’s merely promising to use the force of government to take from one set of pockets in order to fill the pockets of others. All of which raises a basic question: why? Why would she do by force that which private companies are already doing on their own?

Considering college tuition, Starbucks and Uber already offer paid college tuition (Arizona State the educator) as a lure meant to attract baristas and drivers. This is the stuff of economic growth. The more investment there is, the more valuable are workers given their rising ability to produce more with less. So with human capital at a premium, businesses are more and more offering free tuition to their work forces.

And as readers can doubtless imagine, tuition assistance and free tuition is not limited to Starbucks and Uber. Disney provides it for promising employees, so does Walmart, UPS does, so do Intel, Fidelity and Publix. The list is long. They didn’t need a law, nor do they. They’re just aware of how valuable the people who show up for work each day are to their success.

Student loans are no different. Precisely because they can be onerous, the willingness of corporations to help employees pay them off grows by the day. As CNBC reported last year, “[S]tudent loan assistance, which started as a niche offering by a handful of companies, is finding its way into the mainstream menu of workplace benefits.” Well, of course. Though government would ideally have zero role in the provision of student loans, the debt isn’t high solely because of “government.” More realistically it’s a market signal of what’s already happening in the private sector: college students are willing to run up large debts precisely because businesses are already doing with shareholder money what Warren would like to do with funds taken from others. As the economy grows, the burden of student debt will shrink as competitive businesses more and more shoulder the burden.

Hopefully politicians will take note of this market-driven development. When companies are growing, they attract the kind of investment that is directed toward advances that greatly increase the value of what workers and machines produce each day. The result is that both worker and machine become more valuable to the corporation.

It’s all a reminder that when politicians go out of their way to tax businesses, they’re ultimately penalizing the employees of those businesses. The corporate tax reduces the amount of capital that can be re-invested in said corporation, and the employees of said corporation lose. All this ignores another basic truth that corporations as taxpaying entities are a fiction. Individuals own corporations, which means the corporate tax penalizes the businesses that are presently competing with perks to win the services of American workers. Taxes penalize us even when they’re not directed at us. Readers should remember the previous truth the next time they cheer the imposition of tax on “others.” With taxation there's no such thing as “others.” We all suffer the desire of politicians to take in order to mis-allocate.

Back to Warren, the desperate to be loved Senator’s swagger is not hers. She stole it. Or intends to steal it. Better yet, the former law professor is superfluous. Businesses are already offering what she can only decree by force. Yet she claims to be a “liberal.” No, she’s an authoritarian. Get it?

John Tamny is editor of RealClearMarkets, Director of the Center for Economic Freedom at FreedomWorks, and a senior economic adviser to Toreador Research and Trading ( His new book is titled They're Both Wrong: A Policy Guide for America's Frustrated Independent Thinkers. Other books by Tamny include The End of Work, about the exciting growth of jobs more and more of us love, Who Needs the Fed? and Popular Economics. He can be reached at  

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