• Arguments Against Raising Minimum Wage Don’t Hold Up

    August 27, 2014 // 3 Comments »

    The arguments against raising the minimum wage don’t hold up to facts.

    Aren’t most people who work for minimum wage teens?

    No– 88 percent are adults, with more than a third over age 40. These workers earn half of their families’ incomes. Meanwhile, the federal minimum wage has been stuck at $7.25 an hour since 2009.

    C’mon, you don’t get an education, it’s your own fault you work for minimum wage, right?

    Wrong. The percentage of low-wage workers with at least some college education spiked 71 percent since 1979, to 43.2 percent today. You didn’t ask, but adult (re)training programs don’t seem to help much.

    O.K., I feel for those people. But won’t higher wages cause higher prices?

    The way you functionally subsidize companies paying low-wages to workers– ponying up the difference between what McDonald’s and others pay and what those workers need to live via taxpayer-paid SNAP (food stamps) and other benefits– is a hidden cost in plain sight. You’re already paying higher prices via higher taxes; you just may not know it.

    But even if taxes go down, won’t companies pass on their higher labor costs?

    Maybe, but they are unlikely to be significant. For example, if McDonald’s doubled the salaries of its employees to $14.50 an hour, not only would many of them go off public benefits, but so would the company– and a Big Mac would cost just 68 cents more (another study says only 14 cents.) At Wal-mart, increasing wages to $12 per hour would cost the company only about one percent, so that made-in-China $10 item would run you all of $10.01.

    So maybe prices won’t go up so much. But won’t companies, facing higher labor costs, cut back on jobs?

    Companies hire for business needs, such as surge Christmas help, not out of societal largess. The Los Angeles Economic Round Table concluded raising the minimum to $15 locally, and thus putting more cash into the hands of consumers, would generate an additional $9.2 billion in annual sales and create more than 50,000 jobs. A Paychex/IHS survey, which looks at employment in small businesses, found that the state with the highest percentage of annual job growth was Washington, which also has the highest statewide minimum wage. Nationwide, even a small hike to $10.10 an hour would put some $24 billion a year into workers’ hands to spend and lift 4.6 million Americans out of poverty. Consumer spending drives 70 percent of our economy.

    What about small businesses?

    Two-thirds of all minimum wage workers are not employed by small businesses. Better yet, one survey shows three out of five small business owners favor raising the minimum wage; their profits depend on a strong local economy, which requires more money in local consumers’ hands. Most small businesses cannot off-shore jobs, or export their way to profit, so micro-economics matter. Sad to say, 50-80 percent of most small businesses already fail for various reasons, even with a minimum wage that has not kept up with inflation (wage costs are actually lower now than in the past; in 1968 the federal minimum was $1.60 per hour, approximately $10.70 in 2013 dollars.) Factors other than labor costs seem far more significant.

    Don’t these anti-minimum wage arguments sound a lot like the old anti-union arguments?

    Yep. Many opponents at the height of union employment in the 1970s claimed high wages cost jobs. How could a business survive paying $25 an hour? If wages were cut, they said, and profits went up as costs fell, more jobs would be created. The demise of unions did certainly help raise corporate profits, but it clearly did not create jobs, at least not jobs at a living wage. One in four U.S. employees are low-wage workers. That is 20 percent higher than in the United Kingdom, and the highest percentage among industrialized nations. So how’d that all anti-union stuff work out?

    If there are no clear arguments against raising the minimum wage from our perspective, why are companies so opposed?

    While wages have fallen, from 1978 to 2013, CEO compensation, inflation-adjusted, increased 937 percent. Funny how the two arguments to keep wages low, unions and minimum wage, track one another. It’s almost as if there was a pattern of finding ways to lower wages while keeping CEO compensation high in America, societal costs be damned.

    But can’t every statistic can be argued?

    Sure. However, at some point, assuming one seeks more than simply a hyper-wealthy dominating a working poor, economics is about people. People who can afford to feed themselves in meaningful jobs earn not just money, but self-respect. The connection between working and taking care of yourself and your family has increasingly gone missing in America, creating a society that often no longer believes in itself. Raising the wage so many Americans now depend on for their livelihood benefits us all.

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    Copyright © 2020. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity.

    Posted in #99Percent, Economy, Minimum Wage

    Target Stores Target Unions

    April 26, 2014 // 17 Comments »

    As part of my research into the New Economy for my book, Ghosts of Tom Joad, A Story of the #99Percent, I worked a series of minimum wage jobs, as now do so many Americans. The work is long and hard, socially demeaning, and damn unlikely to give one a decent life worth living; twenty-eight percent of American workers earned less than the poverty line.

    With that background in mind, this video is almost unbelievable: an anti-union Target “training” video that claims unions are actually only a business which makes money by charging dues and fees as their “product.” They say that anything a union used to do is now already in the law, so unions serve no purpose but to lower your wages through fees. It gets worse– have a look at the actual video and be scared…

    BONUS: Target also uses whacky racist training documents (“Mexicans – lower education level, some may be undocumented”).

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    Posted in #99Percent, Economy, Minimum Wage

    Same as It Ever Was

    June 2, 2011 // Comments Off on Same as It Ever Was

    The always prescient Iraq Oil Report has come up with yet another reason Iraq is unlikely to become a major oil exporter anytime soon: laws preventing oil workers from organizing have created a situation of work stoppages met with retaliation. This does not promote the extraction of petroleum.

    For those who still contend getting rid of the evil dictator made everything happy in Iraq, Iraqi workers in the public sector still are forbidden from forming unions not controlled by the state, a regulation remaining from the Saddam Hussein era. Freedumb!

    Iraq is a signatory to international workers rights agreements, and the 2005 constitution called for a new labor law that lies dormant in the moribund political process. Oil workers went out and formed unions anyway. The oil unions have stopped production here and there and have held rallies over pay and treatment. In response, they have been targeted by security forces and members have had warrants issued for their arrest or been relocated to areas away from their families.

    This new birth of freedom in Iraq clearly justifies the sacrifices Americans have made, right? Makes you kinda wish we did get some oil for blood.

    For more, see Twelve Reasons Iraq will not be a Major Oil Exporter.

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    Posted in #99Percent, Economy, Minimum Wage