President Obama raised a very mild proposal in his State of the Union speech. He proposed that we raise the minimum wage from $7.25/hr to $9/hr, a modest increase. You would think, judging by the Republican response, that he had released the hounds of hell. The economy will collapse, businesses will no longer hire people, unemployment will skyrocket. That is, according to conservatives.
The minimum wage has not kept pace with inflation. If it had, we would be looking at a wage of $20/hr, a reasonable living wage that would enable people to educate their children, pay the rent, pay for transport, and the occasional vacation. Republicans are having none of that.
Republicans want a pliable, indentured work force, people who wont fight back, that will work all year, often six days a week, with a two-week vacation, if they are brave enough to take it. A higher minimum wage would allow people to save a little, educate themselves, make a better life, but Republicans wont have any of it.
Conservatives have nothing but contempt for the poor, who, they claim, do not pay taxes, and take tax credits they have not earned. The wages of the poor in America are so low, that they do not have the lee-way to pay taxes, they just do not earn enough. Conservatives don’t particularly care, all they care about is that the poor do not pay taxes.
During the Romney campaign, we learned that conservatives believe that 47% of people just take from government without giving anything back. I have written before that by paying them a very low wage, we already tax them. The tax is the level of the wage itself. Everyone in society is taking from the poor by not paying for their services.
If we pay the poor more, they are able to buy more products and services, which increases the level of employment. The more people employed, the more jobs are created, since more people are spending. Everyone benefits when employment is high and unemployment is low.
Paying a living wage ensures that there is redistribution of wealth without the government taking money from people in the form of taxes. People actually earn the wage that they are getting and not receiving benefits from government. It pays everyone when more people can participate in the economic activities of the nation, enables more people to go to school or university, which improves life for everyone.
When the minimum wage is low, people cannot afford to buy goods, meaning that business owners don’t do as well and they employ fewer people. Since businesses refuse to employ more people on their own, and pay them a better wage, government has to get involved and impose higher wages.
Restaurant workers earn around $2.35/hr, with the bulk of their pay coming from tips. Most people are very frugal tippers, resulting in lower wages for workers. The only way around this is to impose a service charge on the bill. If people want to add to that charge, well and good.
The minimum wage in the U.S. has fallen a long way behind other industrialised nations. In Australia, the wage is $15.75, in the United Kingdom $9.57, France $12.55. Those nations also have strong social programs that ensure that people do not become victims of poverty. In the wealthiest nation on Earth, the minimum wage languishes at $7.25.
Australia, judging by the conservative reaction to the Presidents proposal, should have high unemployment. In fact, their unemployment rate is around five percent, lower than that in the United States. The country weathered the financial downturn extremely well. Even truck drivers can make a healthy living earning around A$80k/yr, or so I am led to believe.
Almost all industrialised nations have strong union representation, meaning that workers have collective bargaining power that increasingly is being lost in the United States. It is not feasible for workers to negotiate individually with companies. They do not have the power, and are easily replaced, which gives corporations unlimited power over people’s lives. This is what motivates the drive for profit, and political power by corporations.
CEO’s in the United States average over 300 times the wage of the average non-supervisory worker, and yet pay lower taxes than their own workers. There is no measure by which anyone can maintain that an executive is 300 times smarter, works 300 times harder, or is 300 times more valuable.
Without those workers, nothing gets produced, no services offered, and ultimately, no products or services are sold. Without the buying power of the worker, everyone suffers. The single most effective way to improve the economy is to raise the minimum wage sufficiently that workers can afford the basics of life and save for retirement. The country gains nothing by continuing to have an underclass of people who live in poverty, under stress and deprivation, while executives live lives of unparalleled consumption.
Conservatives have little time for those who are less well off, treating them and their needs with contempt, openly disparaging them and their efforts to live reasonable lives. Those lives have little value other than as consumers and workers, and their condition is blamed not on executives but on those workers.
Executives just cannot acknowledge the invaluable service given by the workers to the corporations. They are seen only as disposable resources that can be dispensed with as soon as projects end or economically difficult times hit business.
We are heading for one of at least two political systems. The first is a heriditary aristocracy, in which the poor are taxed and the landed gentry live lives of opulence and conspicuous consumption, or the soviet system in which everyone lives in poverty, and the few run the country. I wonder whether there is really any difference between the two.
There are other notable differences between the United States and most other developed nations. In much of Europe, workers receive anywhere between twenty and thirty vacation days per year. In the United States, workers ar supposed to get two weeks, but most workers ar too afraid of losing their jobs, and take either a few days here and there, or a week at most.
In other nations, unions negotiate working conditions, resulting in safer, accident free work places. In the United States, because the unions have been destroyed by lobbyists and Washington politicians, working conditions deteriorate, accidents are more frequent, sick days are vanishing to the point that people have to take vacation days when they become ill. This is particularly dangerous in the fast food industry where flu can spread particularly quickly.
I was led to believe that living and working in America was the equivalent of a workers paradise. I was gravely ill-informed. This is no paradise, it has become no more than the nation of greed, in which the less fortunate are ground into the dirt
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