Warmth From the Millyard: October 2008

“No Such Thing As A Free Lunch”
By Will Stewart, Community Organizer and Tenant Services Coordinator for NeighborWorks-Greater Manchester and UNH Community Leadership student

Standing in front of the board on the first day of the semester, my high school economics teacher wrote the following in big blue letters:

TANSTAAFL

This acronym, he said, underlies all economic activity, from household budgets to the global economy. Advertisers, marketing gurus, politicians and even some economists will often try to tell you otherwise, he told us, but don’t let them fool you: “There ain’t no such thing as a free lunch” — TANSTAAFL.

In short, TANSTAAFL means that it is impossible to get something for nothing. There is always a cost, monetary or otherwise.

For instance, I received a credit card offer in the mail the other day. The company in question offered me a Red Sox-themed card. As a bonus, I would also receive a “free” Red Sox umbrella for signing up. But of course it wouldn’t be free, as I would end up paying for that umbrella via interest and fees. And even if I paid my balance off every month, the umbrella’s cost would be paid by some other card holder. There ain’t no such thing as a free lunch.

As a community organizer and tenant services coordinator for NeighborWorks® Greater Manchester, a nonprofit affordable housing developer in Manchester, I am reminded of TANSTAAFL on daily basis. You see, the tenants who live in my nonprofit’s affordable apartments are nearly all low-wage workers.

In researching the employment status of our adult tenants last fall, I found that custodians make up the largest group of tenants employed in any one field. The average hourly wage of this group is a whopping $8.97. This equals, before any taxes are taken out, $358.80 a week, $1,435.20 a month and $18,657.60 a year!

For the most part, the dirty work performed by these custodians — including the ones who clean the malls we shop in, the airports we travel in and out of, the offices we work in and, yes, even our own University of New Hampshire — is outsourced. That is to say, the custodians are not actually employed by the company or institution they clean. Instead, they are employed by third-party cleaning companies that are awarded cleaning contracts by submitting the lowest bids, on which they are able to make a profit by such means as hiring only part-time workers so that they do not have to pay for such “benefits” as health insurance.

Under increasing pressure from shareholders and taxpayers respectively, business and government see such outsourcing as a way to reduce to costs. Otherwise they would have to hire custodians directly, paying not just wages, but also health insurance costs and Social Security, disability unemployment insurance taxes for each employee. If your main (or only) concern is the bottom line, outsourcing a no-brainer. Or is it?

On the surface, outsourcing might seem like a good deal for shareholders and taxpayers, even if one somehow manages to totally ignores the clear exploitation of fellow human beings, who, especially in the custodial field, are more often than not immigrants and refugees who came to this country with the dream of improving life for themselves and their families.

But despite their low incomes, these outsourced workers are still expected — and here’s the rub — to pay full price for the goods and services they and their families need to survive. Indeed, I’m not aware of stores that sell low-income shoes or low-income groceries. But even these needs – which are getting more expensive by the year – pale in comparison to rent.

Here in Manchester, the average two-bedroom apartment goes for $1,026 a month, according New Hampshire Housing Finance Authority’s 2008 Residential Rent Cost Survey. In the Portsmouth-Rochester area, which includes Durham, the cost is $1,072 per month. In both locations, your average custodian must spend more than two-thirds of his or her $1,435.20 monthly income just to cover rent. What little remains must go to buy those market-rate groceries, clothes, transportation and other necessities. How someone is able to survive (forget about getting ahead) in this manner is a miracle.

Or is it? Remember, there ain’t no such thing as a free lunch. The money has to come from somewhere. And indeed it does. But if not from the profits of the employers of these individuals, where?

From groups like mine, for starters. By offering below-market-rate rents, my nonprofit and those like us are basically subsidizing these employers' already impressive, multimillion and multibillion dollar bottom lines by allowing them to pay their workers a criminal wage. Indeed, why should they have to pay the workers more? They have organizations like ours to pick up their collective slack when it comes to providing essentials like heating assistance, food, warm clothes, furniture, health insurance and transportation. The list goes on and on. And the buck is literally being passed on each and every one of them.

In the end, it’s you and me who foot the bill. We pay for it through our tax dollars, which go to support many nonprofits. We pay for it when we buy the goods and services from companies that use a very small portion of their profits to make “generous” donations to the nonprofits who work to meet the unmet needs of outsourced and other low-wage workers.

And because such donations are tax-deductible, that also means the rest of us must pay more in taxes to make up for the resulting decrease in tax revenue. And if tax revenues are lower, that means there’s less money to go toward things like higher education, which in turn means higher tuition for students.

It’s a shell game, to be sure, but the money always has to come from somewhere. Remember: there ain’t no such thing as a free lunch!
Copyright: Will Stewart, 2008. Please request permission before copying.