Op-Ed | The Future of Living Wages

This essay was originally published in The Globalist.

business-wages

What can governments do for incomes in an era of intense global labor competition and automation?

Whose duty is it to ensure a living wage in a global economy where jobs can be moved easily to more “flexible” jurisdictions? And how is that goal of a living wage best achieved, regardless of any moral responsibility?

Increasingly, those questions may have two very different answers, as abstract ideals diverge from realistic solutions in the 21st century.

Aging policies

One common policy solution of the 20th century industrialized world was legal compensation floors, mainly hourly minimum wage laws. Companies were simply compelled to meet their duty to workers.

The first country to authorize a government role in setting minimum wages was New Zealand in 1894. The United States saw its first state minimum authorized in 1912, just over a century ago.

Franklin D. Roosevelt, the U.S.’s 32nd President and the leader of America’s New Deal, in 1933 explained the principle behind such mandates:

It seems to me to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country.

In 1933, that statement was not just a moral argument, but also an enforceable policy position. Today, in many cases, it is not.

No enforceability

Large multinational corporations that operate worldwide have more leverage and flexibility in the global marketplace than any single national government. Their transnational character allows them to avoid national efforts to compel them to do their fair share under a more democratic capitalism.

In many sectors, if a large business has – in the words of Roosevelt – no “right to continue [operating] in this country” due to its preference for paying sub-living wages, it can and will simply go elsewhere.

The century-old mechanism of a legal wage minimum — while still critical — is losing its effectiveness against poverty and labor abuses due to the radical transformation of the global economy. New mechanisms are now urgently required to supplement it.

The underlying goal – the need for a living wage – that once led to the creation of minimum wages have not changed – but the toolbox must expand.

Until lately, the issue has stalled. In most of the industrialized world, strong social safety nets often reduced the perceived need for higher wages. Meanwhile, U.S. activists were tarred as closet socialists seeking the Europeanification of free-market America.

Everywhere, the poor typically lack political leverage. Their demands are frequently written off as ignorant populism detached from economic realities.

Tipping point

But we have reached a tipping point. Even techno-optimists – those who have long boosted the life-easing benefits of the arrival of robots – are now concerned.

They are starting to acknowledge that the pressure on wage levels (and employment levels themselves) will no longer just come from cheap, surplus human labor overseas. It will also come from increased mechanization, automation and robotics.

And this time, the pressure will affect (and is already starting to affect) workers with higher incomes, too. Read more

May 20, 2015 – Arsenal For Democracy 128

Posted by Bill on behalf of the team.

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Big Ideas for Reforming American Governance (and Economics): The Baja wage subsidy experiment, Expanding the House of Representatives. People: Bill, Nate. Produced: May 19th, 2015.

Correction: The number of residents in the UK was significantly misstated during this episode. The correct number is 64.5 million. We apologize for misspeaking.

Discussion Points:

– Should governments subsidize the difference between the minimum wage and a livable wage?
– Should the U.S. House be expanded to make districts smaller? What would happen if the there were 3,000 U.S. Representatives representing 106,000 people each?

Episode 128 (48 min):
AFD 128
(If you are unable to stream it in your browser on this page, try one of the subscription links below.)

Related Links/Stats

AFD: “Mexican state of Baja California to test government wage support”
Democracy Journal: House of Representatives ratios, 2008
London School of Economics: UK House of Commons ratios, 2011

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And don’t forget to check out The Digitized Ramblings of an 8-Bit Animal, the video blog of our announcer, Justin.

April 1, 2015 – Arsenal For Democracy 122

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Topics: Big Ideas for Reforming American Governance: Does the US have too many elected offices? Should legislators be trustees for or delegates from their voters? People: Bill, Nate, Sasha. Produced: March 30th, 2015.

Note for listeners: We’re testing a half-hour version of the show over the next few weeks. Let us know whether you prefer this format or the longer format.

Episode 122 (28 min):
AFD 121

Discussion points:

– Do we have too many elected offices in the United States? Should most elections occur at the same time (e.g. on the presidential ballot) or be spread out?
– Which offices should be elected and which appointed? When should policies be created by elected officials versus subject experts?
– Are elections too complicated to produce clear mandates for various offices and identify the will of the people on specific issues?
– Is the role of an elected official to be a trustee acting independently in the best interest of the people regardless of their views, or is it to be a delegate with a mandate to fulfill the people’s wishes?

Related Links:

“Just how many elected officials are there in the United States? The answer is mind-blowing” | Daily Kos
“Institutions and Representational Roles in American State Legislatures” | State Politics and Policy Quarterly, Vol. 6, No. 2 (Summer 2006)

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iTunes Store Link: “Arsenal for Democracy by Bill Humphrey”

And don’t forget to check out The Digitized Ramblings of an 8-Bit Animal, the video blog of our announcer, Justin.

March 11, 2015 – Arsenal For Democracy 119

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Topics: A hypothetical journey through reorganizing America’s representative democracy, from elections to a parliamentary system to unicameralism. People: Bill, Nate. Produced: March 9th, 2015.

Discussion Points:

– Should U.S. state legislatures all have only one chamber?
– What reforms could make State Senates more useful and the US Senate more fair?
– Should the legislative branch hold executive power like in a parliamentary system?
– When do checks and balances just become pointless gridlock?
– Should US states move toward proportional voting elections?

Episode 119 (47 min):
AFD 119

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January 28, 2015 – Arsenal For Democracy 115

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Topics: Big Ideas – Zero-Tuition Public College; Greek elections. People: Bill, Nate. Produced: January 26th, 2015.

Discussion Points:

– Big Ideas for Reforming American Governance: Should the federal government offer a zero-tuition 4-year public college system? Is this feasible?
– How will Syriza’s win in the Greek elections affect Greece and the EU?

Episode 115 (46 min)
AFD 115

Related links
Segment 1

ThinkProgress: How Obama Could Make College Free For Everyone Without Spending A Dime
EdWeek: Some Higher Education Advocates Wary of President’s Free Community College Plan
The Atlantic: Is There a Better Way to Deal With Student-Loan Debt?

Segment 2

AFD: The Questions Posed by World’s 2015 Elections
AFD: Syriza-Independent Greeks coalition takes office

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iTunes Store Link: “Arsenal for Democracy by Bill Humphrey”

And don’t forget to check out The Digitized Ramblings of an 8-Bit Animal, the video blog of our announcer, Justin.

December 3, 2014 – Arsenal For Democracy 109

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Topics: Big Ideas – Cash transfers for poverty; Nigerian politics; US state legislatures. People: Bill, Nate, Sasha. Produced: December 1st, 2014.

Discussion Points:

– Big Ideas: Are cash transfers more effective on poverty than “workfare” and tax cuts?
– Is Nigeria’s ruling PDP feeling threatened in the upcoming elections? Are Boko Haram attacks widening?
– What should we expect from US state legislatures after heavy Republican wins in 2014?

Episode 109 (53 min)
AFD 109

Related links
Segment 1

AFD: “Social inclusion, anti-poverty policy are great for the economy!”
The Globalist: “Bolivia: Where Socialism Appears to Work”
AFD: “Weirdly, tax cuts don’t solve poverty, finds UN in New Zealand”
AFD: “Indonesia debuts world’s largest cash transfer program ever”

Segment 2

AFD: “Report: Tear gas used in Nigeria parliament”
AFD: “Nigeria government raids opposition offices”
AFD: “Kano: Boko Haram strikes Nigeria’s 2nd largest city”
African Arguments: “Nigeria Forum – What Happens When Oil Prices Fall?”

Segment 3

AFD: “Beyond the Senate: The 2014 state losses”
Al Jazeera America: “The Democratic comeback plan”

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iTunes Store Link: “Arsenal for Democracy by Bill Humphrey”

And don’t forget to check out The Digitized Ramblings of an 8-Bit Animal, the video blog of our announcer, Justin.

November 26, 2014 – Arsenal For Democracy 108

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Topics: Big Ideas for Reforming American Governance – Rethinking Immigration; Volkswagen unionizes in Tennessee; Burkina Faso’s pseudo-civilian government. People: Bill, Nate. Produced: November 26th, 2014.

Discussion Points:

– Big Ideas: On immigration reform, do both Congressional Inaction and Executive Action miss the real causes of the current situation? Should immigration law be rewritten from the ground up?
– Can Volkswagen’s cooperative unionization of Tennessee workers serve as a model for other firms in the US?
– Has the military government of Burkina Faso co-opted the purported transition to civilian rule? Did foreign powers rush the transition?

Episode 108 (56 min)
AFD 108

Related links
Segment 2

AFD: “Volkswagen US still driving toward unionization”
Nashville Public Radio: “Labor Secretary Wants Volkswagen’s Tennessee Plant To Become A Model”

Segment 3

AFD: “Lt. Col. Isaac Zida: The Wolf of Ouagadougou”
War Is Boring (Medium): “Burkina Faso Made the Pentagon Nervous”

Subscribe

RSS Feed: Arsenal for Democracy Feedburner
iTunes Store Link: “Arsenal for Democracy by Bill Humphrey”

And don’t forget to check out The Digitized Ramblings of an 8-Bit Animal, the video blog of our announcer, Justin.