Tag Archives: wages

Fair wages are just another operational cost to meet

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There are op-ed columnists weeping about all the jobs a $15 wage floor would supposedly eliminate, as if companies couldn’t just cut executive pay and shareholder payouts. Some still insist that, to avoid spurring unemployment, it would be better to pay everyone less than they need to pay bills.

I hate to break it to them, but the first goal of paid work is to get workers enough money to survive, not to give everyone something to do. But at any rate, there’s just so much evidence that reasonable minimum wages don’t cause mass unemployment (despite what those folks seem to think).

Really, it’s all a matter of priorities. Wages are just part of the field conditions in which companies compete under a properly regulated capitalist market, along with taxes and supply costs and anything else you can imagine a company needing to pay for. We’ve decided not to properly regulate the labor market, so companies use money for other stuff (or profits), and not for wages.

As FDR argued, if your business literally can’t operate without underpaying workers, it doesn’t deserve to operate. If higher wages for low-level workers is the breaking point for your company and no internal changes can save it, your company is a disaster. A properly regulated market would adhere to the principle of corporate survival of the fittest, but “fittest” would include ability to pay fair wages without bankruptcy. Small businesses wouldn’t go bust automatically either, because all workers would be getting paid more and thus have more to spend locally.

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July 22, 2015 – Arsenal For Democracy 135

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Posted by Bill on behalf of the team.

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Topics: Wages in America; Iran nuclear deal. People: Bill, Kelley, Nate, and Greg. Produced: July 20th, 2015.

Discussion Points:

– A unified econo-moral argument for the necessity of dramatically higher U.S. wages tied to productivity gains.
– Why the Iran deal is a good one (and why Iran’s nuclear program is not our biggest concern in the region).

Episode 135 (55 min):
AFD 135

Related Links

– The Globalist: “Americans Need Better Pay Before Longer Hours”
– Mic: “How Many Hours You Need to Work Minimum Wage to Rent an Apartment in Any State”
– Clinton Campaign on Twitter: “Hillary called on companies to share profits with workers…”
– LA Times: “Who gave up what in the Iran nuclear deal”
– New York Times: “Congress to Start Review of Iran Nuclear Deal”
– Haaretz: “Lapid: Knesset must investigate Netanyahu’s failure to thwart Iran deal”

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TG: “Americans Need Better Pay Before Longer Hours”

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Arsenal Bolt: Quick updates on the news stories we’re following.

The Globalist: “Americans Need Better Pay Before Longer Hours” – George R. Tyler: What Jeb Bush and Scott Walker get wrong about U.S. workers with their war on wages.

Americans have worked harder and smarter since 1979. Productivity is up 66.5% and Americans now work 1800 hours annually on average – 300 hours more than Germans. But the GOP’s vision of America is one where hard work is rarely rewarded with higher wages.

Exhausted employees must wonder at the remarkably rarefied air enjoyed by America’s wealthy, when multimillionaire GOP presidential candidates like former Florida Governor Jeb Bush urge them to work even harder. The Republican answer to wage stagnation is simple: With hourly pay stagnant, the solution is to work more hours.

Read the rest.

 
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May 20, 2015 – Arsenal For Democracy 128

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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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Mexican state of Baja Calif. to test government wage support

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While far from an ideal solution, Mexico’s federal government is planning to experiment in the state of Baja California with an unprecedented program to subsidize the difference between private wages and livable incomes for some farm workers.

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If signed on June 4, this plan negotiated by the state and federal government — in an effort to prevent current labor disputes, strikes, and blockades from boiling over into wider disorder or violence — would be in lieu of setting a much higher minimum wage and attempting to compel the private industry to pay that full amount (probably to keep the companies from just moving the jobs to another state with a lower prevailing wage).

The downside of the plan (I’m guessing) is that it’s likely some companies will try to lower their wages (illegally or otherwise) to pay even less at prevailing effective wage levels, but the government says it will negotiate with the industry to come to some sort of solution so that the existence of subsidies isn’t abused. (They’ll also raise the minimum wage somewhat — just not all the way to the 200 pesos/day target. The remaining difference will then be subsidized.)

Another criticism will likely be that this is essentially a taxpayer-funded gift to the large Mexican agribusiness corporations whose representatives and allies dominate the state’s government. But more on that later.

In general, of course, this new plan is fairly strange to our eyes, because the government here (also) typically doesn’t have a direct role in subsidizing general wages, since paying workers is a role we assign entirely to the actual employers, and the government just sets the legal floor. In theory. As The Atlantic points out, that’s not actually really accurate in practice in the United States; we just obscure it better than doing direct wage subsidies:

Having the government step in to fill the gap between reality’s wages and livable wages might seem foreign to Americans, but the U.S. government in a sense already does this—just less directly. A recent study from UC Berkeley’s Labor Center found that nearly three-quarters of people participating in government programs such as Medicaid and food stamps are in families headed by workers. The authors, calling this a “hidden [cost] of low-wage work in America,” estimated that through these programs, taxpayers provide these families with about $150 billion in public support. Additionally, programs such as the Earned Income Tax Credit essentially subsidize the wages of workers whose income is below a certain level.

Shouldn’t companies be making up this difference instead of taxpayers? That’s how some state legislatures feel. Starting next year, California will publicly name any company that has more than 100 employees on Medicaid. And in Connecticut, state legislators are considering a bill that would require large employers to pay a penalty for each worker on their rolls earning less than $15 an hour.

 
And of course those various hidden costs to the government don’t even get into the actual blatant government subsidies in the U.S. for various agricultural production like dairy and corn to maintain certain production and price levels. Or the various massive tax incentives doled out to attract companies to specific states or communities (ideally only if they create a specific number of jobs, which is then essentially a wage support program in disguise).

But the Mexico experiment gets to the bigger questions: Whose job is it to ensure a livable wage in a globalized economy? And how is that goal best achieved, regardless of “moral” responsibility?

We may not instinctively like the idea of the government writing a check to make up the difference when private industry tries to tighten the screws on its workers in a loose labor market that favors employers, but what we like and how to realistically get the necessary goal accomplished may be two increasingly different answers in the 21st century.
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March 18, 2015 – Arsenal For Democracy 120

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Topic: How the Shareholder Revolution is hurting America’s businesses and workers. People: Bill, Nate. Produced: March 16th, 2015.

Discussion Points:

– What happens to companies that borrow money to make shareholder payouts?
– Why aren’t American companies investing in the future as much as they used to?
– Why should American companies tie wages to increases in profits and productivity instead of focusing on dividends and stock buybacks?

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 120 (27 min):
AFD 120

Related Links:

– AFD: Corporate borrowing diverted to shareholders, not investment
– The Roosevelt Institute: Blog post on “Disgorge the Cash: The Disconnect Between Corporate Borrowing and Investment”
– The Globalist: U.S. Stock Ownership: Who Owns? Who Benefits?
– The Globalist: Can the United States Close the International Wage Gap?
– The Globalist: Want to Fix Income Inequality? Relink Wages to Productivity

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The Oscars and the Pitfalls of White Feminism

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After the initial controversy about the lack of diversity in the nominations for the Academy Awards, you would think that the awards show and everything associated with it would have done a better job of keeping away from controversy. Yet it seems the opposite.

Despite their extensive advertising coverage featuring videos of Lupita Nyong’o, Kerry Washington, and Viola Davis being their elegant selves at previous shows and rehearsal recordings — as if to say “Hey! We do have black friends!” — it seems that the show couldn’t help but make one misstep after another. The host, Neil Patrick Harris, opened the show with a very awkward attempt to make fun of just how White this year’s nominees were, and later on baited David Oyelowo into making yet another unnecessary joke about Quvenzhané Wallis’ name. Sean Penn also made an extremely racist joke about Mexican director Alejandro González Iñárritu that would not have been made about any European, British, or Canadian nominees.

Another terrible incident that happened was some of the comments made about one of the attendees. In an Oscars Pre-Show, Giuliana Rancic made comments about the faux dreadlocked hairstyle that actress Zendaya wore for the awards. In her comments about the actress (which was later revealed to be actively scripted) Giuliana stated that Zendaya’s dreads made her look like she smelled of “weed and patchouli.” Giuliana later apologized for her statements after Zendaya released a statement addressing the disparaging comments. This comes just weeks after several blog posts praising Kylie Jenner and her faux dreads as edgy and innovative.

Although the aforementioned incidents are ghastly themselves, another incident is equally offensive though it tried to hide itself in a positive speech. Patricia Arquette during her acceptance speech called for wage equality for women, a speech that excited many of the folks watching. Backstage, when she received the award and was asked by the press to elaborate, Arquette stated that “men who love women, gays and people of color that we’ve fought for need to fight for us now” (video). She didn’t explain who “us” were, but in her initial speech she was speaking about wage equality for women and in the press conference she seems to be listing the people outside of that group who she believes should be allies, so it’s not a huge leap to assume that in Ms. Arquette’s mind she was referring to White women.

Pictured: Patricia Arquette, file photo. (Credit: HeartTruth.gov / Wikimedia)

Pictured: Patricia Arquette, file photo. (Credit: HeartTruth.gov / Wikimedia)

I’ve written before about what does and does not get to be seen as Women’s or Feminist issues in society, and this is a new case of that classic problem. Wage equality for women is definitely a challenge, but to say that gays and people of color “need to fight” for wage equality ignores the fact that they’ve been doing it all along. Solidarity is important, but you add insult to injury when you ask people who are already working towards change to work harder. Calling for solidarity makes sense, but it’s insulting to demand solidarity from those already showing it and from those who are themselves part of the movement.

Moreover, Women of Color have always had a particularly strong disadvantage when it came to work and wages. Even today Black, Native American and Latina women make less money than even White women, earning $0.64, $0.59 and $0.54 respectively for every dollar a White man makes. In contrast, White women make a total of $0.78 per dollar a White man makes. While that still is unequal, it doesn’t make sense to turn around and tell those less fortunate to help you make it to the full dollar when you may or may not have helped them get only halfway there and seem to believe their struggle is complete.

It’s a shame. In the year 2015, Women of Color, especially Black women, are still not considered part of the movements that should include us. Our fashion and style is considered unique and interesting only when it’s not on our bodies, and our hard work is only used to help folks with more than us to get ahead while we suffer in the background. This shouldn’t be happening — not in media or in any other fields we get into. It’s a shame. It’s a travesty. And it needs to stop.