I’ve been hearing a lot of uninformed and misinformed internet chatter recently on the subject of the minimum wage. The lack of any political resolve to deal with it has reminded me that we have in the past had politicians in possession of sufficient courage to do what is right on the subject of worker payment.
Franklin D. Roosevelt spoke eloquently and acted decisively on the matter. FDR declared in no uncertain terms that businesses which refused to pay a living wage to workers had no place in America. He acted to secure for workers the right to organize on their own behalf, a right corporations had enjoyed in the form of incorporation with limitless abandon, but had vigorously opposed for their employees, and mostly still oppose today. Yes, this means UNIONS.
He successfully introduced and convinced Congress to enact a federal minimum wage for the first time in US history. It was a modest effort at that point, but was clearly intended to be improved to the point of creating a living wage.
Then, in January of 1941, FDR unveiled one of the most inspired and impassioned speeches he ever gave on the subject of rights. It was the 1941 State of the Union speech, but is widely remembered as the Four Freedoms Speech. In it, he enumerated and discussed the freedoms that are central to the sustenance of any democratic society. Two of the freedoms he discussed were freedom of speech and freedom of worship, paralleling the First Amendment to the Constitution. The other two, the real and unique core of his contribution to the advancement of freedom, were Freedom from Want, and Freedom from Fear. (For more on this, read historian Harvey J. Kaye’s work FDR and the Fight For The Four Freedoms).
These sound abstract, or even Utopian, but Franklin Roosevelt was a pragmatic political thinker and doer, not a purveyor of pie in the sky. Our understanding of these principles becomes much more concrete when we grasp the fact that we have the means to do something about economic inequality and poverty. There are real socially and macro-economically effective steps that can be taken to combat want, the lack of basic needs in this country. NO ONE working a full time job in America should be living in poverty.
One of those things is to increase the minimum wage, so that it gradually becomes a real living wage. Even if we merely increase it until it equals the buying power it had at its previous peak in 1968, it would have a profound effect. Even if you completely ignore technological productivity factors, it would be around eleven dollars per hour. We must note, though, that this math is very conservative, because inflation indices from the Congressional Budget Office do not factor in food costs (because they say those are seasonal-despite the fact that most food budgets of low income people include very few or no seasonal products), or medical expenses, because they are volatile (although there is a clear trajectory to observe there too).
According to a study by the Center for Economic and Policy Research done in March, 2013, a real calculation of value of hourly work compared with 1968 would produce a minimum wage of $21.72/hr today. Between FDR’s time and the late 1960s, both wages and productivity grew steadily. Since then however, only productivity has grown significantly, with few and paltry wage increases, seen mostly as band-aids on US poverty.
No one is proposing anything near that. But even the $15 an hour minimum wage that is being put forward as an eventual ideal now would have profound positive effects on the lives of millions of people and on the economy.
Before we get into those, let me be crystal clear on the subject of jobs. There are no reputable or credible studies that demonstrate a significant job loss ensuing from a minimum wage increase.
Business interests who sell expensive products to well compensated people often employ people for low money to make their products. They have a vested interest in keeping wages low. These special interests have historically warned that wage increases would lead to job loss. This has never once proven true.
The people of the United States must recognize that the interests of the National Association of Manufacturers are NOT the same as our nation’s interests.
Now, lets touch on some points in favor of raising the minimum wage:
If we increase the minimum wage enough, millions of people would be free of the need for federal and state food assistance. The tax money that now goes to food assistance could be spent instead on infrastructure, education, and paying down the national debt. Not only would raising wages not cost taxpayers a dime, it would save many millions of federal dollars in that way alone.
Then there is the spending effect. We’ll get to that in a minute.
The current federal minimum wage provides a full time employee with a pre-deduction income of roughly $15,000 Dollars per year. This is NOT enough money after deductions (taxes, health insurance, FICA . . .) for even a single person to live independently in any state in the union.
(Never mind the facts, kneejerk rightwing website Breitbart threatened that increasing the minimum wage would cause 20-30 year-olds to lose their jobs and move back in with their parents. That would be scary, except that many already must live with parents despite working full time! Back to the drawing board, fearmongers).
The spending effect: Since most people who would be affected by a wage increase from the current $7.25/hour federal minimum are desperate, they would not be socking their newfound riches away in offshore bank accounts. They would buy luxurious items like fresh vegetables, children’s shoes, car repairs, work clothes, appliances, and other equally extravegent goods.
What, we might ask, would this do for the retail economy?
It isn’t hard to figure out. Businesses would thrive, new ones would open, and the currently sluggish economy would liven up. This is not mere conjecture. There are historical examples. Even Henry Ford knew better than to underpay his workers. He wanted to sell them cars!
In addition to stimulating the private sector, a higher minimum wage would free funds that are being spent for food assistance to the poor, and result in a larger tax base. There are any number of ways that this would further stimulate the economy, by creating more public sector jobs in infrastructure and research, both of which are chronically underfunded now.
Aside from the purely financial benefits of a living wage economy, it has ethical ones as well. People who earn a decent income can consider purcheses based on factors in addition to price. Will this product work well? Is it durable? Does my purchase keep money in the community? Is it environmentally responsible? Do the people who made it earn a good living?
Does choosing it support my neighbors, our planet, and my values?
When you have no money, you can’t afford to ask. Buy an electric car? Ridiculous! I’ll just have to keep driving my old Buick Toronado with the missing catalytic converter, leaking power steering fluid, and tail pipe held in place by a wire hanger. Too bad I don’t live in a city that has light rail or I could just sell it to the crusher and ride the train.
When your income is dramatically insufficient as the minimum wage is now (such as the wage earned by the typical food worker, a twenty-nine year old parent), the ability to consider any of those ethical questions evaporates utterly, and even then the very idea of freedom from want seems impossible. People living in these sorts of circumstances cannot clearly perceive the value or benefit of democracy. Democracy itself appears rarified to the economically oppressed. In such conditions, when our corrupt national and local political classes are utterly unresponsive to the issue of poverty, freedom of every sort seems like a fantasy to the poor, and freedom from want seems to be the ultimate fantasy.
But it isn’t fantasy. It can be achieved. It is right for the people, and it is right for the nation. We just need to exercise the political will to do what is right.
- Ed Lacy, USTV Media