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25th August 2008 Charles J. Brown
05:55 pm

The McCains’ Servants: Doing the Math (Again)


I already wrote about this last Friday, but in the sturm und drang surrounding Estategate and VPalooza, I think it got lost.  So I’m going to mention it again.  Apologies to those of you who already read this.

Last Thursday, Politico ran a follow-on story to their “how many houses” scoop, which among other things noted that

The McCains increased their budget for household employees from $184,000 in 2006 to $273,000 in 2007, according to John McCain’s tax returns.

Quite a few bloggers picked up on this, mocking the McCains for spending so much on servants.

But as far as I’m concerned, for people who own ten houses, not to mention other assets, the reality is that $273,000 sounds low, not high.  In fact, if we assume one employee per property, the average sum paid each staff member would put them at or just below the poverty line for a family of four.

In fairness, that may not be accurate.  The McCains may have only two employees, each of whom is being paid over $100,000/year.  Maybe.  But until we know how many “household employees” the McCains have, we won’t know the facts.

So here are some questions the media need to ask John McCain:

  1. How many servants “household employees” do you have?
  2. How much do you pay them?
  3. Do you provide health benefits?
  4. Do you provide a pension plan?

Today I’ll add a fifth:

Are you in compliance with federal laws requiring you to document the U.S. citizenship/green card status of all employees?

That last one just might cause him to blow a gasket.  Come on Lou “Espousing Economic Populism Means I Can Lunch Daily at the Four Seasons” Dobbs, I dare you.

You can find the full post after the  jump.  I think all of it is still relevant.

A lot of bloggers and pundits have been obsessing over the following passage from [Thursday]’s story in The Politico:

The McCains increased their budget for household employees from $184,000 in 2006 to $273,000 in 2007, according to John McCain’s tax returns.

I understand the reason why people are talking about this — rich people paying servants is not a good image.

But there’s a bigger point here:  how many people are covered by this sum?  Because rich people paying servants poorly is an even worse image.

Let’s do the math here.  Or at least what I think the math might be.

To comply with federal law, McCain, Inc. has to pay both state and federal employment and insurance taxes.  I’m guessing they also provide health insurance.  Not so sure about a retirement plan, but for now, let’s say the answer is no.

Even without retirement, taxes and benefits are still a significant chunk of change.  For the moment, let’s assume that they are equal to about 25 percent of each employee’s total compensation (wages + taxes + benefits).

Okay.  We know they have at least eight homes.  For argument’s sake, let’s say that three of these are rental properties or otherwise not used by the family.  That leaves five homes.  I’m guessing that you can assume a maid or cook at each.  So that’s at least five employees.

Two of the five places are condos, but the other three are homes (I think).  So let’s assume a gardner/lawn care person for each.  That’s now eight employees.  But the Arizona estate probably takes more than one person to care for the lawn.  That’s nine.  And let’s assume that at their main residence, there’s both a maid and a cook.  That’s ten.

So I think I’m being fairly conservative in guesstimating that the McCains have ten household employees.

Now let’s look at that number again:  $273,000.

$273,000/10 = an average of $27,300 per employee.  But that doesn’t take into consideration the cost of taxes and benefits, which we’ve assumed are 25 percent of each employee’s total compensation.  So…

$27,300 x .25 = $6,875

$27,300 - $6,875 = $20,475

According to Wikipedia, the poverty threshold for a four-person family in the continental United States is $21,200.

And last I checked, $20,475 is less than $21,200.**

And that, friends, is pocket change we can believe in.

So I have some follow-up questions for Senator McCain:

  1. How many servants household employees do you have?
  2. How much do you pay them?
  3. Do you provide health benefits?
  4. Do you provide a pension plan?

Oh wait.  He’s a POW.  I guess we won’t get to find out.

**Please check (and challenge) my numbers.  I’m neither a math wiz nor an economist.

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This entry was posted on Monday, August 25th, 2008 at 5:55 pm and is filed under politics. It is tagged under , , , , , . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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