Episode 29 – Does a Low Minimum Wage Legalize Slavery?

Welcome Friends, Neighbors and people everywhere. This is your host, Michael Nunes.

Welcome to the Twenty-Ninth episode of my podcast, The Power of Three. I want to help show you how harnessing the Power of Three can lead to a more fulfilling life, a life that celebrates our differences and our similarities, and accepts that we are part of the great web of life.

In this episode, I will discuss whether the minimum wage is just another way to legalize slavery. The United States has a history of relying on low wages or slavery to drive its economy. Before the Civil War, millions of people, mostly from Africa were kept and traded as slaves. The Southern states used this servitude to increase the wealth of a small number of people.

The introduction of the 13th Amendment to the U.S. Constitution abolished slavery and involuntary servitude. Both slavery and servitude continued well into the Twentieth Century. The Black Codes and Jim Crowe laws ensured that former slaves remained destitute. Even after the Civil Rights era, the minimum wage remains no more than a poverty wage.

The wage has not kept up with inflation. Every few pennies in increase are fought over with more energy than the Civil War. We see the wealthy rewarded with massive tax cuts, while the poor are driven into bankruptcy, destitution and despair.

The arguments in favor of a significant rise in the minimum wage are more compelling than the alternative. For a start, the minimum wage has barely budged in years. The last time the wage was changed was in 2009. Before that, it was 1997, twelve years without a change. Inflation chewed away that wage. Each year it buys less, while the wealthy enjoy the fruits of the backbreaking work provided by those workers. The wealthy and corporations enjoy the infrastructure, natural resources and the labor of the people, without paying fairly for those resources.

Not since 1952 has the minimum wage been so low, adjusted for inflation. In the past, the wage has been raised 23 times without any impact on the number of jobs. Businesses need workers to do the work. They are not in the charity business. They will pay as little as they can get away with. And they do so.

By keeping the minimum wage low, businesses create an artificial burden on government resources. People cannot make ends meet without government assistance. The alternative is grinding poverty, rises in crime, and health problems that consume the ability to earn a wage. When the economy turns down, as it always does, the poverty base shows dramatic increases as people are forced into unemployment. The result is that even less is paid into social assistance programs. Government subsidies to the poor cost taxpayers $243Bn in 2013.

Yet Republicans want to take away the very few resources that people have. Removing the minimum wage, and assistance programs like Medicaid will drive ever more people to desperation. Republicans never fill in the blanks. How will people forced into poverty survive? How will they pay for housing, food, utilities, and transport? Charities cannot handle the load alone.

Only a very small subset of people earn minimum wage, around 3.3% of workers. Increasingly, those workers are adults, not just college students paying for tuition. Yet, if such a small subset of people earn the wage, there would not be much impact on jobs. The economy will benefit enormously from a higher wage for workers. The alternative is taxation on those who can afford it, to pay for assistance programs.

The idea that the wealthy need incentives to create wealth is no more than another conservative con-job. All workers need incentives. Why should only the people at the top deserve incentives? They already have their incentives, and they no longer deserve them. The poor deserve incentives far more.

The problem is that the incentive curve is inverted. It should be easier for the poor to earn a living than it is for the wealthy to become wealthier. The wealthy do not create wealth; the workers who produce the goods and the consumers who purchase those goods create the wealth. Without those two groups, the wealthy would not exist. This is precisely why a vastly more progressive tax should be imposed. It should be easier to go from earning $7.25 per hour to $10 per hour than it is to go from earning $72.50 per hour to $100 per hour. In this economy, it is the other way around. Which is fundamentally unethical to everyone in society.

The share of income earned by the top 1% of earners in the United States has soared dramatically since 1980. In 1980, the top 1% earned 10% of all income. Today, that figure is close to 20%. The share of all income stolen by the 1% has doubled. That means that in real terms, the share by the poor has declined by an equivalent amount. Did the wealthy become more intelligent? Did they double their productivity? Did the poor stop working, or were they pushed out of the labor market by mechanization and offshoring of jobs?

Some people don’t like government regulations. Of course not. The wealthy don’t want to have their gravy train disturbed to ensure that the little people are paid a living wage. They don’t want the little people to get government benefits, assistance or education. The wealthy prefers the situation precisely as it is. What we have become, once more, is a society dependent to one degree or another on slave wages or servitude. The poor and lower classes struggle with debt and abject poverty while the wealthy steal their birthright.

All of this violates the Universal Declaration of Human Rights. This declaration was signed by Jimmy Carter in 1977, but has yet to be ratified by the U.S. Congress. I fail to see why it is so difficult for the U.S. to sign a declaration of human rights. This, after all, is the nation that brought down the Nazis, destroyed Russian Communism and turned China into a bastion of capitalism. Do we not have a moral obligation to sign? The declaration states that every person has the right to an adequate standard of living for himself and his family. This includes adequate food, clothing, and housing. It also provides for the continuous improvement of living conditions.

Neither have we signed the Convention on the Rights of the Child. This extends the right of every child to a standard of living adequate for the child’s mental, spiritual, moral and social development. Why is it so difficult for the United States to sign these agreements? We are the wealthiest country on Earth. Surely we can afford to adhere to these agreements? Or should we sink back to the child labor of the 19 Century?

I spend every lunchtime in my local subway restaurant. Over the last twenty years, I have been in restaurants across the country. I have spent a great deal of time observing the servers behind the counter. I have seen how hard they work, the long hours and continual availability. Vacations may be legislated, but anyone with the temerity to actually avail themselves of the opportunity is quite likely to lose their job.

I recently became friendly with one woman at one of these restaurants, let’s call her Ms. X. She is not young, she is not raising money for college. She has four children, two of whom are about to leave school. Her youngest has just turned five years old. She is continually on the go, always moving, serving people. She is not lazy. She also has a degree in criminology. She gave it up because she was worried about caring for her youngest child who is not old enough to go to school.

There is no kindergarten for her child, so she takes him into the restaurant every day. He is a wonderful child, never deliberately destructive. He sits quietly for the most part, watching a movie on his tiny laptop with its broken screen. He sits and talks to me because he is bored, a child with a lightning mind. There is no help from government for this hard working mother.

Often she is on her own, trying to handle a dozen customers at the same time. She never stops, never sits and rests, and never complains. Despite her age, she is only an assistant manager in the restaurant. Her wage is barely livable, a little above that of the ordinary worker. She cannot afford lavish vacations in Europe or the Far East. Her son can’t afford private schools and tutors. How does she afford medical? What did she do when she was pregnant? Pregnancies are expensive.

Rents in Orland average $1,176, or $1,265 for a two bed and $1,500 for a three bed. How much of her income is left after paying the rent, utilities, and transport costs? To say nothing of medical insurance. Yet, Republicans want to take away any support she may qualify for, take away minimum wage, food stamps, and education.

A greater and greater share of the economic burden is laid on the backs of the poor and the lower classes. The wealthy live off income from assets and the labors of the workers. We have in essence, a system of slavery and servitude that ensures that the poor stay poor. People who complain are labeled provocateurs, or end up in prisons. Debt incurred is ruthlessly demanded by the wealthy, to the point of debtors’ prisons. Debt is never written off, which ensures continued servitude through garnishing of wages, regardless of the impact on the workers’ living standards.

Opponents of minimum wage claim that the value of a worker should be decided in the open market. Slave markets were indeed open. People were bought and sold to the highest bidder. What was their labor worth? Is it greatly different today? Workers today have little leverage, in the same way that slaves had little leverage. Republicans ensure that unions are destroyed, which takes away the single route that workers have to bargain with corporations

One of the more distasteful arguments is that workers deserve a lower hourly pay; that they deserve no more than the business is willing to pay. Equally, corporations employ workers because they need certain work done. They are not in the charity business and will not hire workers they do not need. You need a certain number of workers to do a task. Either the task will not be done adequately with fewer workers, or the workers remaining have to work longer hours for less.

Another argument is that younger or inexperienced workers will not find work with a higher minimum wage. When workers are in short supply, corporations have no choice but to hire younger or inexperienced workers. Today, they look outside the country and hire workers from low cost countries. Far too many people on minimum wage or very close to it are not providing second or third sources of income to a household. Far too often they are the primary source of income.

Tax rebates are similarly unworkable. Minimum wage workers do not pay income tax because their income is too low. There is nothing to rebate. They may pay parole taxes for Social Security and Medicare.

We rely on the ruthless indifference of a market that demands only fealty to profit. There is no thought to the difficulties of the worker, to their circumstances, or to whether they will eat tonight. Workers in high cost countries must compete with workers in low cost countries, where conditions are entirely different, yet corporations can flit from nation to nation. A beggar thy neighbor policy.

The real problem is that economists look at the problem from a purely financial perspective. What we should be talking about is humanity. People are not profit points. To treat them as such is to demean their humanity and reduce them to no more than sub-human. This allows them to be exploited, abused and mistreated. Which is precisely why we need social policies that treat people with respect and value their labor by the time they spend. Life is important, nothing is more important. To elevate profit above that is barbaric and unnecessarily cruel.

Minimum wage is tantamount to slavery, of forced labor because there is no alternative. We need a living wage, a wage that allows people to live with dignity. We need a society in which the wealthy owe the poor fair treatment for their sacrifices. A society in which the wealthy cannot take everything for themselves and leave so many destitute. A society with empathy. A society that pays a decent minimum wage, not a slave wage.

I encourage you to continue to enhance your life with the Power of Three and search for the best possible life to live.

Until next time, go well my friends.

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