There is no shortage of problems to solve, and even more ideas on how to solve them. One thing that goes quickly forgotten when discussing solutions is when the rubber meets the road. To which I mean the financial and practical implications of such a solution. While we should not let these factors bar us from brainstorming solutions, we need to make sure that we do not employ false compassion.
It was just one of those days while staying in a hotel where I was casually watching C-SPAN – as I know all of us do regularly – when I heard one of the senators mention that we should not act with false compassion. This idea was something I have often thought of and gives it a concise and memorable phrase that I am now running with. Please watch the short 46 second clip provided below to hear Senator Bill Cassidy describe it.
Based off the video above, the issue was paid family leave. The problem statement is that most people in the U.S. cannot afford to take any time off of work due to illness or family emergencies. As a result work productivity and morale are down because employees are not given adequate time to take care of themselves or family members to come back to work focused on their job. Companies and employees should be in favor of paid family leave to counter these effects. To this end the bill proposed would raise the payroll tax to pay for this benefit, thus guaranteeing paid family leave time for everyone with a job. The payroll tax is a tax that is paid for by both the employee and the employer, and thus share the cost between companies and employees alike. In this instance a problem was stated, a solution was proposed and how it would be paid for was taken into account. This is a really good start as the solution is being coupled with the way in which to pay for it. It is possible that the increase in taxes proposed will be enough to cover the cost of the service, however as mentioned by Bill Cassidy in the video, we should be cautious if it would be sustainable. The payroll tax is already responsible for paying for social security and medicare and is shared between employee and employer. So the payroll tax has to be able to absorb the increasing cost of the services it already pays for, and therefore might not be able to sustain this program as well. False compassion gets even worse when its enacted without funding in mind at all.
As of this writing the governor of Illinois vetoed a bill to increase the minimum teacher salary to $40,000 per year over 5 years [source]. Teachers play a very important role in our society by shaping future generations, and the success our education system should be of paramount concern for us as a society. However, this bill is an example of false compassion. The problem is that there is a teacher shortage in Illinois. So the bill proposes to raise the minimum teacher salary to attempt to attract more teachers to fill the shortage. At a cursory glance everything sounds good, if you want to have more of something you incentivize it. In this case that is to increase the teacher’s salary. The false compassion comes from a well meaning place, but does not follow through into execution.
The bill enforces the higher salary with out any mention of how it would be paid for. Unlike the paid family leave bill, this bill is an unfunded mandate. Which is where the government enacts something with out regards to how it will be paid for. As a result, it makes this solution worse than the one for paid family leave, which at least addressed how it would be funded. For the school districts who have teachers below the new minimum salary they need to now pay their teachers more. You might think that this is okay because teachers should be paid more. That is not the only concern though, the other concern is, where is that money going to come from?
The districts may have to increase taxes which might not be sustainable depending on how high their taxes are already. For example, increasing property taxes to pay for the increase in salary may have adverse effects on people wanting to move to that district. The other option is to cut funding from somewhere else. This might cause cuts to areas that are just as important as teacher wages, and since it is enforced at the state level it would not allow the district to incentivize teachers to work in their districts in other ways. This is not to say that teachers do not possibly deserve more money for their work or that the issue is not important, but we need to solve the problem in a sustainable way. Other solution proposals allow for individual schools or districts to increase pay for the positions they need to fill the most. Other options are to pay more for teachers who have previous experience, allowing the schools with the shortages to handle the issue instead of a state wide mandatory minimum salary increase across the board.
Social security is a hot topic when it comes to its solvency and can be considered a solution with false compassion. It is a common joke among friends my age that we have no expectation that the social security fund will still have money when we retire. According to the government’s own Social Security Administration’s website [source], the social security fund will be drained by 2037 without any changes to either payouts or social security taxes. This also matches some of what Bill Cassidy was saying in the clip, about having to take steps to keep the social security fund solvent. People might like being able to say that all Americans automatically have this benefit of having retirement savings for them when they get to retirement age. There are two big issues with this, one is that it is currently not sustainable financially speaking as mentioned above. Part of this is due to the fact that people are living longer, and we have the baby boomer generation causing a huge influx of people collecting benefits at the same time. The other issue is that it is not optional. You cannot choose to not pay into social security and not collect from it when you retire. This is a form of false compassion where you are not allowing the individual to choose for themselves what they want to do for their retirement planning.
False compassion often stems from an underlying empathy and yearning to help others. Starting with the premise that they want to solve a problem or provide a benefit to others and making that the focus while leaving behind the practical implications of any such solutions devised. Guaranteed paid family leave, reducing teacher shortages, guaranteed retirement savings, free college tuition, medicare for all, these all sound great when thinking about them in our heads. However, we must keep in mind that nothing comes for free. That applies to the literal finances themselves as well as the opportunity cost of such solutions. Opportunity costs such as raising the payroll tax to pay for paid family leave causing more strain on social security fund solvency, higher teacher wages possibly causing fund cuts to extra curricular activities, or social security tax does not allow someone to invest those funds in other retirement or non-retirement areas. Sometimes these opportunity costs are still worth paying, but often they are not even acknowledged when discussing a solution.
This is not about any of the issues mentioned in this post directly, but more of a focus on making sure that when the time comes that our solutions are well thought out. It is about making sure that we are really committed to solving the world’s issues. That we should do so honestly, full-heartedly, and with out short cuts. To admit to ourselves when a solution is just wishful thinking versus practically applicable. Let us all act with true compassion and make this world a better place to live. It takes a tremendous effort to ensure a solution will not only work but also be sustainable, but in the end if we do not do these things we can end off worse then when we started.
I Talk A Lot 