LETTER: ‘Gee, where to begin with all of this discussion about minimum wage?’
[EDITOR’S NOTE: The following is a Letter to the Editor, written by a Reader. It does not necessarily reflect the opinion of The SeaTac Blog nor its staff:]
Gee, where to begin with all of this discussion about minimum wage? It certainly is a sensitive topic and one that generates a great deal of debate as well as very divergent differences of opinion. It is also an issue that is much broader than the instant proposal about to be put before the voters of SeaTac and is a part of global issues that affect everyone. So, let’s wade in…
Parochially, let’s put it in its broader context. It is doubtful that the proposal or debate would be generated if the minimum wage from the late 1960’s or early 1970’s was periodically raised to keep pace with inflation. It would likely be around $11.00 per hour today, depending on the specific statistics one looks at. The simple fact is that the minimum wage today is lower that it was in 1968.
It should also be noted that this lowering of the minimum wage over the past 30-40 years has been accompanied by a significant increase in the inequality of income distribution in the United States, with a greater percentage going to the top 1% and .5% of the population. Income inequality has grown from its low in about 1970 to about the same as it was prior to the great depression of 1939. The U.S. Congress simply has failed to keep the minimum wage at the same minimum in real dollars, resulting in a decrease in the minimum rather than an increase, or even remaining level. The reason isn’t so complicated. As a result of the failure of the national minimum wage to keep pace with rising prices and inflation, many states and municipalities (including the cities of Los Angeles, San Francisco, and the states of Connecticut, Illinois, California, Massachusetts Nevada, Vermont, Oregon and Washington, which is the highest in the nation) have increased the minimum wage in certain sectors or across the board above that of the federal minimum wage.
The New York Times in about June 2005 did an analysis of the growing income gap in the United States. The Times relied on information and analysis form the U.S. Treasury Department and the results were widely viewed as reasonable from a host of organizations representing a range of views, including the U.S. Department of the Treasury, Citizens for Tax Justice, the Cato Institute and the Heritage Foundation. Among the conclusions of the Times’ analyses were that from 1950 to 1970 for every dollar earned by the bottom 90%, those in the top .01 percent earned an additional $162.00 and from 1990 to 2002, for every additional $1.00 earned by those in the bottom 90%, the top tier increase was an extra $18,000.00!
It was almost amusing to me, if not so stark in its apparent ignorance, that in the hullabaloo leading up to the 2010 elections so many of those 90%, and self-proclaimed “tea party” members, decried the idea of income re-distribution in America that they feared from the perceived policies of President Barak Obama. Like Rip Van Winkle, they must have been napping in the last 40 years!
There is no doubt that the raising of the minimum wage by the city of SeaTac, without a like raise nationally, may have some negative economic consequences. The opponents of the proposal correctly state some of those consequences, but wildly exaggerate some and ignore possible benefits. Most of the arguments are misinformed propaganda.
It might be noted that the state of Washington, with a higher-than-national minimum wage has a relatively robust economy in comparison to many of its sister states. It might also be noted that the country of Australia has a A16.37 per hour (about $15.00 US dollars) national minimum wage; Belgium E9.12, or 11.96 U.S. Dollars; Canada C$9.75-C$11.00; France E9.43; Ireland 11.09 USD; Monaco 9.43 USD; Netherlands E8.477; New Zealand NZ$13.75; and the United Kingdom $9.83 USD per hour; Japan 8.17 to 10.65 USD, depending on the industry. Denmark has no minimum wage, but permits collective bargaining between unions and employer associations that result in an average minimum wage of 19.00 U.S. dollars per hour. Likewise, Germany has no minimum wage, but the law requires a “moral” wage and the courts there have ruled that any wage less than 75% of average wage for a given occupation is an illegal wage.. Accordingly, the U.S. is at the lower end of the spectrum among developed nations and those of the GS 20. It might also be noted that Australia and Canada dodged the global recession in 2007-8, mostly as a result of restrictive banking laws, however, rather than the minimum wage.
The reason for this is the tax and public policies of the United States as developed over the years since the 1960’s. But back to the consequences of such an action by the city of SeaTac, absent national legislation. Will some jobs be lost? Quite possibly, most probably. Will some businesses cut back on services? Yes, without a doubt. But a cut-back by global international corporations feeding their bottom-line profits may very well result in increased business for smaller sole-proprietorship businesses.
But what about where a higher-than-average minimum wage has been implemented? A 2003 study by the Institute of Industrial Relations of the University of California, Berkeley on the minimum wage in San Francisco found that the higher-than-average wage for airport workers resulted in a reduction in the annual turnover of workers from 95% to 19%; 35% of employers reported increased productivity among workers, 47% reported better morale, 44% fewer disciplinary issues and 45 % improved customer service. Isn’t that pro-business and good for the corporate bottom line? A study by CEPR, the Center for Economic and Policy Research found that the turnover of one employee per year costs the business about $2,700 per employee for non-exempt, hourly workers.
The lower-wage-employee business model is not the only successful model for a sustainable business. A 2006 study by the Harvard Business review found that Costco, whose average pay is 72% higher than that of Wal-Mart’s Sam’s club, and with 82% of their employees with health care benefits, compared with less than ½ of those at Wal-Mart (and Costco workers pay just 8% of their health care premiums, while workers at Wal-Mart pay 33%), had less turnover, less employee theft, and greater productivity. Interestingly, Costco commands a greater share of the warehouse retailing market than Sam’s Club, at about 50% compared to 40% for Sam’s Club, according to the Harvard study.
A decent livable wage is good business, resulting in increased employee morale, productivity, and retention. Additionally, it prevents the federal government from subsidizing lower wages with earned income tax credits, food stamps, and other programs necessary to keep people from abject poverty. We really need to ask ourselves if we want to be a country that does provide for the general welfare as set forth in our constitution, or if we want to be a country that serves a growing divide and inequality to the benefit of a very small number of oligarchs.
But let’s also take a look at who opposes the minimum wage. Opponents are circulating a flyer by the Freedom Foundation, with questionable claims that can be countered by as many opinions and studies that make opposing conclusions. Some of the claims may very well be true. However, the supporting evidence comes from sources such as the Cato Institute, the Heritage Foundation and individuals such as Doug Bandow of the Cato Institute and former special assistant to President Ronald Reagan. These are neo-liberals in the classical sense who believe that corporations are people. (I refuse to use the term “neo conservative” because it lacks any historical philosophical basis. Please remember that the idea of republican government during the time of our revolution was the Liberal idea of its time, based on the idea of classic liberalism from our philosophical forefathers such as Rousseau and Montesquieu, among others.) The idea of corporate personhood is uniquely American derived from a line of court decisions from Dartmouth College v. Woodward, 4 Wheaton 518 (1819) through Citizens United v. Federal Election Commission, 558 U.S. 310 (2010). These are the people that President Eisenhower warned us about in his famous farewell address in 1961 when he spoke of the rise of the military-industrial complex.
In 1996 Scott R. Bowman, a political theorist and professor at the University of Pennsylvania, now at the University of California, wrote about the rise of the global international corporation and free trade philosophies that have led that institution’s dominance over the nation-state in his book, The Modern Corporation and American Political Thought, (I recommend reading it instead of the propaganda by the likes of the Freedom Foundation):
”For the present, it remains a matter of some debate whether the revised doctrine of Free Trade, like the original, will become an apologia for empire. But this much is certain. Should it come to pass, the modern Free Trade empire will be based on corporate control of the means of world production, not exclusively on trade or commerce. And this transnational order will not be ushered in on the heels of vanquishing armies. Its farsighted rulers conquer new domains through the power of the purse, not the might of the sword. In sum, we can safely predict that the global empire in the post-imperialist age of the “Great Trust,” constructed in the image of the corporation, will be unlike anything the world has known. The foundation is already laid. The new-age colossus swiftly arises.”
The post-imperialist, free trade global corporation has arisen. And it has coopted the power of the nation-state as the pre-eminent institution of our age. Forget about “liberal” vs. “conservative”, “Republican” vs “Democratic”, “neo-liberal” vs “neo-conserviative”, “libertarian” vs “big government”, those are outmoded ideas of the 20th century that will not serve us well in the 21st. Today, one must be either for the oligarchs or for the people. One must either be for the totalitarian, corporate state, or against it. Take your choice. I’m reminded of a professor of mine in college that asserted that people are either a predator or a victim, either they pull the trigger or are downed by the act. Although I could disagree with his premise, the fact is you must either be for the people, for democracy, for freedom, or for the oligarchs, for the imperial, totalitarian state and rule by the “Great Trust”, as Bowman put it.
Is this minimum wage proposal a perfect solution to the problems of our age, to the commoditization of people as a piece of the machinery of production, rather than of human beings deserving dignity, respect and a livable wage? No. But I chose not to be a victim. Not to succumb to the propaganda by the corporate-controlled media and its duped recipients. Not to let the great classical liberal ideas of individual freedom and liberty be subjugated to the neo classical idea of corporate personhood and control of the world for its profit.
I vote yes.
– Paul W. McVicker
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