Walter E. Williams

The next question is: In order to make hiring me profitable, what must be the minimum dollar value of my contribution to your total output? If you said $531, go to the head of the class because if the value of my contribution to total output is only our agreed-upon salary of $500, you're making losses hiring me and you're going to be out of business soon. Therefore, if I am producing $531 worth of value per week, it is I who's paying the so-called employer as well as the employee share. The reason why Congress created the fiction of the employer share was to deceive us into thinking that we're paying fewer taxes than we in fact are.

By the way, all those other nonwage benefits that a worker receives are in fact paid for by the worker such as health insurance, retirement benefits and childcare services. Without these nonwage benefits, money wages would be higher. During WWII, Congress imposed wage and price controls making it illegal for companies to compete for employees by offering higher wages. That's when we saw many companies start to offer nonwage benefits, such as health insurance, as a means of competing for employees.

Nonwage benefits turn out to be good for the employee because, for the most part, he pays no taxes on them. In other words, if the employer paid the worker the cash value of, say, health insurance as wages, the worker would have to pay income taxes on it and then go out and buy health insurance.

The bottom line lesson is that if you think you're getting something for nothing, or somebody else is paying for something you receive, you'd better give it another look.

Walter E. Williams

Dr. Williams serves on the faculty of George Mason University as John M. Olin Distinguished Professor of Economics and is the author of 'Race and Economics: How Much Can Be Blamed on Discrimination?' and 'Up from the Projects: An Autobiography.'
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