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by Brian T. Lynch, MSW
“No business which depends for existence on paying less than living wages to its workers has any right to continue in this country… By living wages, I mean more than a bare subsistence level — I mean the wages of a decent living.” (1933, Statement on National Industrial Recovery Act – Franklin Delano Roosevelt)
Question: In looking at the Living Wage calculator, I see that $10.83 for a single adult in Morris County, New Jersey where I live. This seems fair to me for a single person, but when you add one child to that scenario the rate jumps to $22.12 per hour. This raises a serious question. Does the Living Wage Movement suggest that wages should be adjusted according to need? [ http://livingwage.mit.edu/ ]
Answer: That’s a great question. I am not a spokesman for, or advocate of, the living wage movement as an organization. I do believe that living wages should be the minimum wage in this country. Minimum living wages should be what we pay summer college help or student interns, not full-time employees. It might also be appropriate for part-time seasonal help. It shouldn’t be what we pay permanently hired employees.
To answer your question, I researched what a living wage is in the 130 cities that have living wage laws. It turns out that their wage base is for a single employee, not including any dependents. A living wage in Manchester CT equals $15.54/hour (the highest) while it is $8.50 in Orlando FL (the lowest). It would appear that the Living Wage Movement is looking to index a minimum living wage minimum to local economies based on one adult with no dependents.
That said, the minimum wage in 1986 was $10.86/hour as opposed to its current level of $7.25/hour. If it had been indexed to inflation in 1986 the current minimum wage today would be $23.59/hour today. That clearly was intended to provide for a worker with a family. The current median family size is 2.54 persons per household. That inflation adjusted wage equals about $47,000 per year while the current median family wage is a little over $51,000 per year (and still declining, I might add).
Here’s the thing, we have only been talking about wage adjustments to keep pace with inflation. We have not been talking about raising wages to reward workers for our growing productivity. We have not been talking about sharing the wealth that workers help create so everyone keeps pace with America’s growing economy. Cost of living adjustment are important, but they shouldn’t be confused with a productivity, or merit raise.
America is $1.7 trillion richer today than it was in 1976. Our economy has doubled, yet the share of all that new wealth created by American workers in this same period of time is insignificant.
In the 1960’s my father was an appliance repairman at Sears. His salary was enough that my mother could stay home to raise my sister and me. Her role as mother to the next generation of citizens was valued. Today, a typical family of four making about $51,000 does so because both parents work. And they are only able to make ends meet because of easy access to credit to shift their financial burdens onto their future earnings.
When I speak about a living wage I am thinking about getting back to a point where one breadwinner can hold one full-time job and still raise a small family without needing government assistance to do it. That’s what we had, and that should be our goal as a country.
by Brian T. Lynch, MSW
The White House put out a brief video on why we should raise the minimum wage to $10.10/hour. It is OK as far it goes, but it is still a little disappointing to me.
Even the White House is looking at minimum wage law though the modern day pro-business bias that has infected all of civil government. Even though raising bottom wages creates an economic stimulus that would boost spending, increase demand for goods and services and create more jobs, this isn’t the most important aspect. The main reason to raise minimum wages is because it’s simply the right thing to do.
The question of minimum wage is actually a moral question. There is no good rationale for paying a full-time employee less than a self-sufficient wage. What is almost half of a human beings waking moments worth? What is the minimum compensation they should receive for devoting that time to enrich their employers? Why should it be less than what is required to survive with human dignity?
From a social perspective, should profitable businesses be held in high esteem as models of efficiency for paying wages so low that full-time employees require taxpayer subsidy to keep from becoming homeless or having their children taken away from them? Should we have to subsidize the labor force of wealthy corporations like Walmart? Should the federal income taxes of those who make more than minimum wage have to be used to supplement the other employees who takes out the trash at night or mow the lawn? Why should any healthy corporation be allowed to boost their profits at public expense through subsidized labor?
If small businesses or start-up company need government subsidies or tax breaks to help pay their help, let these business owners apply for government assistance rather than make their employees feel inadequate by having to beg for government assistance. No man or woman who works hard all day long should have to apply for housing assistance or SNAP or KidCare or childcare assistance or HEAP or any other government subsidy. Let the business owners apply for government aid to help pay employees the self-sufficient wages all full-time workers should have. Let the means testing process for government subsidy programs fall to the employers. Let’s get it off the backs of the working poor and eliminate the social stigma they don’t deserve. Let the minimum cost of self-sufficient labor wages be part of the cost of doing business in America.
Profits for CEO’s and share holders should not come before self-sufficient wages for laborers. Exploiting workers and taxpayers to boost profits for investors and chief executives is immoral.
by Brian T. Lynch
According to the NY Times: “As in 2011, 46 percent, or nearly half of New Yorkers, were making less than 150 percent of the poverty threshold, a figure that describes people who are struggling to get by.
Even with fewer people unemployed, the poverty rate for working-age adults working full time reached 8 percent, by the city’s measure. Fully 17 percent of families with a full-time worker lived in poverty, and even among families with two full-time workers, the rate was 5.2 percent.”
NOTE: This means that 8% of adults working FULL-TIME are at or below the poverty line, while 46% percent of all EMPLOYED New Yorkers are struggling to get by. This reinforces my analysis that NEARLY HALF of all working families must rely on some form of PUBLIC ASSISTANCE to make ends meet. Government assistance to these fully employed families = a tax subsidy on labor costs for the companies that employee them.
Put another way, people who earn more are being made to subsidize the company’s low wage employees through their federal income tax withholding. Ordinary wages have been held hostage to the 1% for almost 40 years.
AMERICANS NEED A RAISE
In, “Making the Case for a LIVING WAGE” I discussed more fully why it must be the obligation of business to compensate their employees to a level of at least minimal self-sufficiency (a living wage). Once all wage earners realize they shoulder the burden for low wage workers there will be more activism to at least raise the minimum wage. Ask yourself, “How much does my companies low wage policies cost me in income taxes?”
Here below is the link to the New York Times article which is about New York City, but could be about any city in America.
Republican’s increase our public debt by lowering taxes on the wealthy, raising corporate welfare and starting wars. If you are surprised by this bar graph then you then you need to shop around for a more reliable news source.
Corporate Welfare Grows to $154 Billion even in Midst of Major Government Cuts
Editor’s Note: Even as the federal government executes major cutbacks, it’s giving huge subsidies in the form of tax breaks to industry, a fact legislators rarely acknowledge. The Boston Globe recently published a thorough and eye-popping report detailing the nature and extent of these breaks. We think it’s a must-read.
By Pete Marovich
First published in the Boston Globe
WASHINGTON — Lobbying for special tax treatment produced a spectacular return for Whirlpool Corp., courtesy of Congress and those who pay the bills, the American taxpayers.
By investing just $1.8 million over two years in payments for Washington lobbyists, Whirlpool secured the renewal of lucrative energy tax credits for making high-efficiency appliances that it estimates will be worth a combined $120 million for 2012 and 2013. Such breaks have helped the company keep its total tax expenses below zero in recent years.
The return on that lobbying investment: about 6,700 percent.
These are the sort of returns that have attracted growing swarms of corporate tax lobbyists to the Capitol over the last decade — the sorts of payoffs typically reserved for gamblers and gold miners. Even as Congress says it is digging for every penny of savings, lobbyists are anything but sequestered; they are ratcheting up their efforts to protect and even increase their clients’ tax breaks. [snip] http://reclaimdemocracy.org/corporate-welfare-tax-breaks-subsidies/
Here is how the rise of corporate welfare looks in my state of New Jersey, and note in particular how it has grown under Gov. Chris Christie:
Regardless of what you have been lead to believe about the evils of unions, there is no question that organized labor is responsible for creatiing the middle class and the good life as we know it today. But all that is in decline as anti-union sentiment grew in response to organized business interests in the 1070’s. I say this because I don’t see anyone else point out these facts. Here is another graphic view of how middle class income has declined in lock step with union membership over the years. Also, you will see that the savings in employee wages have gone directlty to the top 1% creating the huge income and wealth disparity we have today. Check it out:
It is clear to me, at least, that the heart of our economic woes is due to 40 years of wage suppression. This results in a declining middle class, a growing number of people falling into poverty, a decline in federal income tax revenue and an added burden on government to support a growing number of poor, working poor and unemployed Americans. You can’t separate chronically lower wages from our declining consumer spending. Regardless of what the economists say, if people don’t have money to spend the economy slows down and jobs disappear. Stocks are doing so well because so much of our financial sector is based on even more depressed foreign labor, yes, but also on depressed wages here at home.
If corporations what to stimulate consumer spending here, and make America attractive to foreign investors, they need to raise wages. They won’t do that because they personally benefit, financially, by keeping labor costs down. Their corporations benefit from the artificially cheap US labor pool created by government aid to the working poor for housing assistance, WIC, food stamps, daycare, etc. And then these bastards making all the money have the nerve to pit us against each other by promoting the lie that the working poor are somehow less worthy, or that they are stealing from us. If corporate leaders don’t see the light then the only alternative is for the work force to re-organize itself and demand higher wages.
We never hear any reference to the working class these days. The media and our politicians only speak of the “middle class” as if that covers everyone who isn’t either poor or wealth. Even references to the poor are scarce. The working class exists. They are sandwiched between the poor and the middle class and they are being squeezed into poverty. It is cruel to ignore them and the terrible pain they are suffering. What has happened to them, aside from being ignored can only be touched on by the four graphs that follow. These were presented in a conversation I had with conservative friend of mine who has forgotten the working class exists. There are many factors hurting the working class. This conversation was only about four factors, wage suppression, the upward redistribution of wealth, working class decent into poverty and declining upward mobility. Post this is my way of addressing what I believe is the most hurtful factor of them all… public silence.
Q: I always thought of the owners as the producers of the jobs that the workers have. You say that it is the workers who are the producers. Have you ever been employed by someone on welfare?
A: Owners coordinate the workforce, but it the employees who do the work that makes the products or services. So in a real sense, the workers ARE the producers. And this has nothing to do with welfare at all. Jobs are not a product. Stuff is a product. Things to sell or trade is a product. Workers are key to making stuff or offering stuff yet when they want a fair share of the value they create they are treated like thieves. Read this and you will know what I am talking about even if you don’t agree:
I also just ran across this table (below) that shows were all the Hourly GDP wealth has gone since the mid-’70’s.
Q: Why should it matter how much a C.E.O. makes if their workers remain on the job? It’s one of the great things about this country. You can work where ever and for whom ever you want. Someone please explain to me why it is greed for C.E.O.’s to make deals to be paid as much as the market will bear but it is ok for workers to make deals to make as much as the market will bear.
A: It may not matter to you at all, but anyone who wonder why they can’t have collective barganing while the CEO is making 400 times their salary might have questions, especially since this is strictly a feature of the US economy and others around the world are paid better than we are relative to their economies.
Don’t forget, almost 40% of people who work full time are poor. I’m not sure what percentage of the poor they account for, but it is clear when we speak of the poor we are not speaking only of people who are disabled, elderly, retired or unemployed.
Note here that in the US, the number of working poor (blue bar in right hand column) is twice the number of non-working poor. So when you and I talk about the poor, you are defining it as welfare recipients while I broadly define it as everyone living below the poverty line, the majority of whom work full time. That’s partly why we have a disconnect on this topic. In my understanding, most poor people work.
Q: I wonder how many of the poor who are now C.E.O.’s would agree with you? Or would they say : “Work hard towards your goal, as I did, and you can achieve anything.”. Isn’t this what made our economy great? Not people who wanted a wage so they could be comfortable in the position they have today? Flipping burgers at McDonalds is not supposed to be a permanent career goal. Even the management at McDonalds wants people to move up. Or am I wrong about incentive and ambition?
A: There are 17,000 companies with 500 employees or more. There are 43 million poor. If 20% of CEO’s started out as poor children that would mean there are only about 4,200 CEO openings for 43 million potential applicants. It’s a safe bet that far fewer than 20% of CEO’s come from poverty. In fact, less than 20% of children born to poorest families will make it into the middle class in their lifetime. Less than 8% will make over $140k/year, which is approximately the income line where the richest fifth starts. Of those at the top, only the smallest fraction will become a CEO. I believe that if you really understood the economic situation in America you, of all the folks I know, would be a big supporter of the working class.
As for incentive and ambition, a good paying job that makes one economically self-sufficient is the highest motivator. But a self-sufficient wage for a single earners is over $30,000/year whereas the median wage for a single earners is less than $26,000/year. In other words, the incentives are less than optimal in today’s economy, and no amount of hard work or individual effort will make a difference for most people until even low wage workers receive a fair wage for a days work.