Against Raising The Minimum Wage? You Stand With Billionaires

To argue against raising the minimum wage, which has not kept up with inflation, is to stand with billionaires.

And there really is nothing to argue about here because we have the historic proof. In the 1960s the purchasing power of minimum wage was much greater than it has been over the past decade. Which of those decades had a more robust economy? I’m not arguing that there’s a direct correlation. But as you can see, conservatives cannot argue a direct opposite correlation either, keeping in mind recessions and periods of economic expansion. The point is, we should pay people a living wage, a wage that doesn’t require propping up by government subsidies, and stop trying to guess the effects of doing the right thing.

minimum-wage-value-inflation-adjusted

source: Economic Policy Institution (EPI)

Being against a minimum wage increase is not an argument in favor of preserving jobs, as many conservatives argue, it’s an argument in favor of preserving profits. McDonald’s and Walmart can afford to pay their workers non-poverty wages while maintaining a healthy profit and keeping prices low. A higher minimum wage would not be devastating to business because (a) it would apply to all businesses (you and your competitor), and (b) it increases the purchasing power of tens of millions of Americans which means more revenue for these companies.

The economic model we’ve followed for several decades now during the era of trickle-down theory is a road to oligarchy rule. Corporations continue to squeeze their employees as executives continue to reap over 90% of the economic gains. This is not a recipe for a healthy middle class. I’ve got news for you, the idea of a middle class is new in human history and it is not solely a result of modern capitalism. It also took the right government regulations and tax policies to make it happen. But from the Reagan administration until today we’ve listened to the wrong people, the people who look to further consolidate their wealth at the expense of everyone else.

So I say again, if you are against a minimum wage increase, you stand with the wealthy elites.

Tweet about this on TwitterShare on FacebookShare on Google+Share on RedditPin on PinterestShare on TumblrDigg thisShare on StumbleUponShare on LinkedInEmail this to someone

EconomyThe 'Free' MarketWealth Inequality

#billionaire#elite#government#McDonald's#middle class#minimum wage#poor#poverty#subsidy#trickle down#Walmart#wealthy

  • Michael

    Another thought provoking post David! Is the living wage proposal meant to replace other direct wealth transfers we currently have going to people working at McDonalds? Or would their wage increase be addition to the other welfare programs they are eligible for? Is the idea that McDonalds would fund this wage increase by cutting the salaries of their executives? By the way, I did a little back of the envelope math here…let’s say there are 1000 McDonalds executives in the U.S. each making a million dollars each! If we took every penny of their pay (not just a cut) and distributed it to all 760,000 U.S. McDonalds employees, assuming they are all working full time, that would amount to an extra 63 cents an hour, hardly what they are hoping for. So if you can’t get it all from the executives, it has to come from increasing prices, cutting the number of employees or providing a cheaper crappier product (note: in the case of McDonalds a cheaper crappier product may not be possible). If I were a McDonalds franchise owner (apparently most locations are franchises) and I had to pay entry level workers $15 dollars an hour, to make the math work I would probably start paying my experienced managers less. If they were making $18 an hour, I would severely limit their future raises and the next managers I hired would be at $16 or $17 an hour. At that point we’re near pure socialism if I’m paying someone who can only sweep the floor and fill drinks $2 less than the person who closes the register, handles inspections, customer complaints, employee scheduling, interviews, hiring, firing, marketing, promotions etc. Would anyone in their right mind even want to be promoted under those circumstances?

    • What do you mean by direct wealth transfers to people working at McDonalds? The only significant wealth transfers going on over the last 30 or so years has been to the very top. And stagnant wages and increased poverty are the proof that there is no such wealth transfer in reverse.

      In your calculations you forgot about profits which are free and clear of expenses. If the hard work of thousands of employees results in a company making profits, it’s not exactly socialist for a company to reinvest those profits into their employees for retention and work-place satisfaction.

      This idea that multi-billion dollar companies are living on the edge unable to pay their workers even a dime more (otherwise we are “near pure socialism”) is farcical.

      At the very least minimum wage should be increased to keep up with inflation. As it stands now, minimum wage is over $3 less than it’s 1968 inflation-adjusted peak.

      • Michael

        Sorry about the confusion, clearly paying a dime more an hour is not socialism, I agree with you there. I was referring to the living wage that all those workers went on strike for, $15 an hour…I think this debate would benefit from some real facts and figures. I’ll admit I don’t have any have SEC filings or company expense reports or anything like that. Maybe it’s best to approach this from another angle, maybe we should just cap all company profits and executive salaries at a level we think is fair? That’s what Obama care did to insurance companies, only 20% of the premiums they collect can be used for anything other than direct payments to service providers.

        • Nobody should work full-time and still live in poverty, especially when they are working for a company the size of McDonalds. So we can start with raising the minimum wage to $9 or $10 and go from there. And sure, many McDonalds locations are franchises, but there’s nothing stopping McD corporate from restructuring the franchising model to allow for a greater percentage of corporate profits to be shared among the franchises, along with a guaranteed baseline salary (above minimum wage). Don’t tell me they are incapable of doing that. There are examples of much smaller companies (in the same business) doing just that, and they still manage to survive and make a profit. This is not a matter of inability, it’s a matter of inflexibility and quite frankly, greed. This paradigm doesn’t change until enough people rise up, organize, and make it change. Because why not pay your workers crap if you can get away with it? When a company is the size of McDonalds, they can get away with it.

          • Michael

            I’m not positive but this might be a good example of the difference between ‘liberal’ and ‘progressive’. My understanding of liberalism was that you should be free as long as your freedom doesn’t infringe on the rights of others. It seems that someone who owns a business should be free to establish the wages for their workers. And a potential employee should be free to work for that wage or not. I don’t think there is anything about a living wage in the constitution, so as far as I can see, the employee’s rights would not be violated. Obviously if we forced an employee to accept that employment that persons rights would be violated. From my perspective it would be very ‘liberal’ of me to not want the government to get involved by forcing either the employer to pay certain wages, or the employee to work at a certain wage. The ‘progressive’ stance here would be something like, “Even though the employer is not violating the rights of the employee, I want the government to step in and force the employer to pay a living wage to make a more fair society.” Do I have this wrong? In college I thought I was pretty liberal, but then a lot of my liberal friends started calling themselves progressive and began wanting the government to do a lot more that ensure people’s rights were protected.

          • You could make your argument about a lot of things and it would still be rejected by a civil society. For example, you could say the FDA has no mandate by the constitution to tell a business that their food needs to meet a certain standard. And customers are free to not purchase their food from said company if they don’t think the food is up to proper standards. But in a civil society we’ve rejected this because we know there is not an equal footing in this situation. A customer does not have the means to test food for quality, and must trust the company is doing right by them. So we have regulations that set a minimum standard. The minimum wage, while not a perfect comparison, exists along the same lines. Same thing could be said about labor laws. Or medical standards, or just about anything. Pointing out that something is not explicitly written in the constitution is not a valid defense of continuing a practice that the majority of society has deemed unacceptable.

            I personally don’t make any distinctions with regard to the difference between liberal or progressive. While the term progressive existed long before, it’s been used in the last few decades as a replacement term for people who were (for whatever reasons) uncomfortable calling themselves liberals. I think the distinction I would make is between classic liberalism and modern social liberalism, as I explained in my What Does it Mean To Be A Liberal piece.

          • Michael

            That is some darn good rebuttal. I would love to see similar FDA like regulations on the doors to a McDonald’s. Something like “Warning: Wages you receive while working here may not be sufficient for providing for yourself or your family”. I would definitely support people refusing to work or eat at McDonald’s and let McDonald’s either suffer from their policies or make changes.