Adventures in Late-Stage Capitalism #1: Juicero Versus the Working Poor

Welcome to a new series on politics and economy in America. Today we'll begin discussing the big questions: Can our dysfunctional society survive? Are jobs disappearing? Is American capitalism going to be replaced with something else? If so, what might come next?

As a brief introduction, I'd like to ruminate on two anecdotes that I think shed light on what's gone wrong in this country.

I. Juicero!
Like juice? Well, you could squeeze packets of fresh juice into a glass. Or, thanks to the Juicero company, you could spend $700 for a machine to squeeze the packets, somewhat more slowly than you could squeeze them yourself. The Juicero machine, an engineering marvel consisting of  four hundred of custom-machined parts, apparently cost more than $1,000 to produce, but the company sold them at a loss figuring to make up the deficit by selling you a lot of expensive juice.

My point here is that savvy investors calculated that the Juicero was such a good idea, they backed it with $120 million in venture capital. In other words they were betting on the idea that so many affluent Americans had so much money to burn, they could turn a profit on a system based around a superfluous $700 bag squeezer. And until journalists exposed the Juicero for what it really was (in a sort of "The Emperor has no clothes" moment so embarrassing that the company withdrew the product) those investors were actually correct - the very wealthy in America really do have that much money to burn.

Meanwhile...

II. Work for America's largest and most profitable corporations... and go on welfare.
Here's an excerpt from a post I wrote in 2015 about minimum wage and working in America:

"In late 2013, Nancy Salgado, a 27-year-old mother of two and employee of McDonald's made news for protesting the poor wages paid by her employer. After 10 years at McDonald's, she was making only $8.25 per hour, significantly below the poverty line for three people. Incredibly, the response by McDonald's to the inquiries of employees seeking information on making ends meet was to suggest that they apply for welfare. From Emily Cohn of the Huffington Post:

"McDonald's workers struggling to get by on poverty wages should apply for food stamps and Medicaid. That's the advice one activist McDonald's worker received when she called the company's "McResource Line," a service provided to McDonald's workers who need help with issues like child and health care."You can ask about things like food pantries. Are you on SNAP? SNAP is Supplemental Nutritional Assistance [Program] -- food stamps ... You would most likely be eligible for SNAP benefits," a McResource representative told 27-year-old Nancy Salgado, who works at a Chicago McDonald's. "Did you try and get on Medicaid? Medicaid is a federal program. It's health coverage for low income or no income adults -- and children.""

My reaction to this article was simple enough: McDonald's, a corporation that makes around $6 billion dollars per year in profits, should pay Ms. Salgado a living wage. Furthermore, it's wrong for large profitable companies to expect the taxpayers to subsidize their employees in the form of welfare benefits."

Some facts about American workers: We are among the hardest working and most productive in the world. Yet we live in the only leading industrialized nation that does not mandate universal health insurance, and also does not guarantee workers paid holidays, vacation and sick and maternity leave. One in nine U.S. workers are paid wages that can leave them in poverty, even when working full time.

A recent "Quality of Life" study conducted through the University of Pennsylvania compared leading nations according to essential ideas of broad access to food, housing, quality education, health care, employment and job security, political stability, individual freedom and environmental quality. This study found quality of life is better than that of the United States in twelve European countries as well as Canada, Japan, Australia and New Zealand.

What do these facts mean (beyond confirming that American workers are getting screwed)? Well, we as Americans have been taught since time out of memory that free-market capitalism is good, and that anything that falls under the rough heading of "socialism" is bad. But compared to other leading nations, one conclusion about life in the United States is inescapable: Our national economy is less centrally-managed and less socialized than other countries, but in every measurable sense our economic and political systems return poorer results than those same countries. And if Americans are hard-working and productive, and they're getting a raw deal, shouldn't we expect things to change?

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