Tuesday, January 7, 2014

The Fight for a Higher Wage

Will 2014 be the year minimum wage workers finally get a much-needed raise?

While it is generally unwise to put much stock in blanket campaign promises at the start of an election year, the Democratic Party insists raising the minimum wage will be its top focus going into the 2014 midterm election.

The New York Times reported last week Democrats hope to enact legislation first proposed by President Obama in last year's State of the Union address which would raise the federal minimum wage to $10.10 by 2015. (The national minimum wage is currently $7.25 an hour. Here in Maine, it is a quarter higher at $7.50)

Meanwhile, activists and fast-food workers in a number of cities are pushing for a $15 an hour minimum wage, spurred on by a series of nationwide strikes by workers at Wendy's, McDonald's, and Walmart.

It is worth noting, we are once again seeing the Democrats not leading but following on this issue. This confirms my long-standing belief that true systemic change always comes from the bottom-up--not the top-down. Indeed, as longtime consumer advocate Ralph Nader points out in a piece for the Wall Street Journal ("America's miserly minimum wage needs an upgrade," 04/15/2013), had the federal minimum wage kept up with inflation since 1968, it would be around $10.67 today.

And despite Democrats' hope of staking out the minimum wage as a new "wedge issue" as the Times article puts it, the issue already shares widespread support across party lines. A recent CBS News poll finds 33 percent of Americans support increasing the minimum wage to $9, while 36 percent prefer the $10.10 rate. (Curiously, the $15 proposal is not included in the poll.) Only 25 percent of Americans wish to see the minimum wage remain at its current rate.

So, if there is so much widespread support for a higher minimum wage, what's the hold up? Well, the right-wing's argument against any raise in the minimum wage is the same one it cites for most everything else: It would be a "job killer."

"Why would we want to make it harder for employers to hire people?" House Speaker John Boehner asks in the Times article. Boehner and his fellow Republicans contend a higher minimum wage "increases the cost of labor," ultimately leading to lay-offs or a diminished work force. Forbes contributor, Tim Worstall, essentially makes the same argument in a piece from last September ("The Absurdity of a $15 Minimum Wage," 09/01/13).

Yet, as Nader points out in his Op-Ed, economists have thoroughly debunked this empty talking-point. In fact, a 2011 study by the Chicago Federal Reserve concluded that every one dollar increase in the hourly pay of minimum wage workers results, on average, in $2,800 in new spending from those workers' households. More consumer spending means more money in the economy overall.

Ergo, a higher minimum wage is not a "job killer" as the deficit-obsessed right claims. It is a job creator.

Furthermore, these are multinational Fortune 500 corporations we are talking about--not mom & pop small businesses. If a fast-food franchise like McDonald's--which raked in upwards of $1.5 billion last year--cannot afford to pay its workers a livable wage then capitalism is an even bigger failure than we previously thought. For all of Washington's whining about the beleaguered "small business" owners, the fact is they employ a small fraction of the nation's workers. In the wake of globalization, deregulation, and Wall Street's ravaging of the economy, most of us--two thirds of the American workforce to be precise--work for Corporate America.

Let's just say it: These corporations are too cheap to pay their workers what their labor is worth. Rather than paying its staff a decent wage, retail giants like Walmart disingenuously encourage them to sign up for food stamps. In November, a Walmart store in Ohio held a spurious Thanksgiving food-drive for its own employees. Talk about adding insult to injury.

This brings me to another point--one that highlights conservatives' hypocrisy on this matter. Austerity-pushing Republicans and market-worshipping libertarians would like nothing better than to eliminate any and all forms of government "entitlements," including Social Security, Medicare and Medicaid entirely. Yet, if minimum wage workers were paid a living wage they would not have as great a need for these supplemental programs. Collectively, taxpayers shell out close to $7 billion every year to make up for the fast-food industry's low wages, according to researchers at the University of California, Berkley.

In other words, we are basically paying McDonald's workers for them. This is not free-market capitalism by any standard. It is corporate welfare.

Just like the miserly employers who complain about associate health care costs yet also oppose single-payer health care, there is a contradictory disconnect between budget-slashing conservatives who should, theoretically, support a higher minimum wage in their pursuit of reducing the "size of government." Either that, or this is simply their insidious plan to literally starve the working poor to death--a theory which, frankly, I would not entirely rule out.

Clearly, the case for a higher minimum wage is a no-brainer. Let's make 2014 the year we stop talking about it, and actually do it.

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