Wage, Profit and Universal Resolutions
How far left can one be without conceding the idea of profit as the result of unpaid wages? In the United States the idea of sole proprietorship defeats that notion handily and small business owners know how a profitable month can serve as the means by which that business and its workers survive when business isn’t profitable. Half the nation’s workers are employed by, or are, small businesses (SBA 2011) so when I stand for higher wages, I am usually focused on large conglomerates, but as we call for universal solutions should we not stop and think about the myriad of smaller operations out there? It could be the missing piece to universal acceptance of fair wages — universal participation.
When I think of “small” business, I think of shops along the city center, tradespersons and their local plumbing, electrical and carpentry outfits, or even the law firm at the corner. Heck, my doctor’s office constitutes a small business, doesn’t it? I am stumped however, when someone asks how to most effectively enact universal policy to ensure small businesses provide reasonable compensation for their workers, what reasonable compensation is, and what fair wages are. I concede, as strongly as I support such a floor of $15/hour (or the equivalent $30,000/yr) for all, I must admit that not every entity can afford such compensation without drastic, if not existentially threatening changes. I only hope workplace safety and consumer satisfaction as foregone conclusions in the small business space, but on the topic of fair compensation it is lacking, to be sure. Has it always been this way? I would urge you to ask the generation who came up half a century ago when the greatest inequality was that of the treatment of people of color vs. descendants of European immigrants — wages and prices were reasonable.
A hundred years ago, however, it wasn’t just that workers were underpaid, some took their lives into their own hands just showing up for work. Workplace safety in the Chicago meatpacking industry, as one example, simply didn’t exist in the early 1900s — and the product was hazardous to the health of its consumers to boot. It’s fair to say we have come a long way, especially since back then it was no surprise; if one wanted a job with steady pay, it was a matter of which industry’s risk was worth the reward of one’s daily bread. Added to that, it was a very serious risk indeed to speak against the workplace or its products. Personally, I would like a free market capitalist to explain to me how such an entity could exist, survive, let alone thrive while treating its employees and its customers with such disdain, but that’s another article altogether.
Thankfully though, folks did speak up. Our progenitors organized, went on strike and collectively bargained. Is workplace safety now universal? Does everyone earn a fair wage? Definitely not. In fact, the people of color who dominate the agricultural manufacturing industry are perhaps the worst treated workers in modern memory. But as a direct result of the people who stood in solidarity against egregious employers and business practices, life as an American laborer has, for the most part, changed for the better in the last century. We do, generally speaking, have rights to workplace safety, consumers have some protections (which were non-existent a hundred years ago), and a whole public policy model, however much is left, offers ways workers can have grievances redressed even without union representation. This is not universal though, and it’s fair to say much of the public entities purporting to protect the worker like the Department of Labor or the Federal Trade Commission aren’t always the bastions of justice they were intended to be. To say these entities are toothless might be a stretch, but they are definitely ill equipped to deal with everyone, if not outright unresponsive. Workplace safety is also something which is not absolute — if not for the employers or facilities, the industries and inevitable contact with hazardous materials that persists in, well, the food industry again, ensure that every day workers are going home injured or ill because of the work they do for their employer.
A century after the labor movement here in the US, however, we are dealing with a very new paradigm in labor. While we have always had large enterprise and employers who sought profit at the expense of the worker, our largest private sector employers are paying the worst wages relative to market prices since the institution of the minimum wage. Massive, multinational corporations whose ownership has been shattered into millions of pieces, each of which are sold to stakeholders demanding regular profits is our new labor adversary. This is a case in which I soundly agree profits are often, if not universally, comprised of unpaid wages. Stakeholders — nay — stockholders are not concerned with fair wages because the investment class own these corporations and are non-working parties with respect to the company. Their role in the company is to extract as much money from the corporation through that stock ownership without performing any work to that end.
I first heard the term “faceless corporation” when I was a young rebel, and back then if it was big and powerful, I was against it. Granted I didn’t know the difference between Keynes and Friedman, nor did I realize the access to international resources we had at every street corner was the result of an exploitative trade deal. Granted, I heard of Nike paying their workers pennies on the dollar by the mid 90s, but had no idea how universal or pervasive those practices were. Even as a kid though, it was pretty clear to see that when a Wal Mart came to town, not only did it cause businesses to fail, what remained were low paying jobs without real hope for advancement or any real stake in the company’s success. I think when we discuss “isms”, especially capitalism, there truly is a less greed-soaked flavor of “mom-and-pop capitalism”, the stuff of which we can all applaud — study, training, hard work, personal investment, risk and reward —while we have a real labor problem with casino capitalism. Sure, many of the largest corporations began as that more palatable form of exploitation of labor — the basic idea of profiting off labor without constantly looking to reduce its cost. I dont think a small businessperson can do anything short of treating their workers as best they can, lest they fail. But the idea that corporation can become the object of moneymaking without labor — indeed placing a bet by purchasing corporate stock, and then demanding that purchase increases its value so you can then sell it to another, who in turn also expects an increase in value. Sustainable? Well, I personally would wish them all well if they paid their workers a living wage, protected them in the workplace, and shunned the idea of outsiders leveraging their influence to compel corporations to eke out profits at all costs, labor always being first on the chopping block. That and staying the hell out of government — given so many of these corporations actually write our laws, I don’t see that happening voluntarily, so yes, I loathe casino capitalism.
When I think of the problems with higher wages and the costs associated with workplace protections, I am reminded by a friend that the largest corporations in Sweden benefited the most during the implementation of its model because they could bear the costs associated with these changes and it put so many small businesses out of their respective industries. Sweden took it pretty far by ensuring the industries and corporations had organized representation to match the workers, and even instituted wage and price controls as appropriate for different sectors. Quite an effort — but this was put in motion half a century ago when economics were so much simpler.
It makes me wonder whether universal minimum wages of $30k per year would eliminate half of our employers or not — again, small businesses are quite a varied bunch and universal “solutions” can be disastrous for some. At the same time however, shifting wage policy all at once allowed Swedish proprietors to adjust their prices without fear of losing their ability to be competitive in the marketplace — since everyone was doing it simultaneously.
The complexity of our global economy has probably made it close to impossible to arrive at universal accord no matter how cooperative our legislators and corporations to find a solution to the massive inequity in our world. But as long as workers are underpaid or underrepresented in public policy, the left will strive to right the ship and that’s why we are here today in celebration of labor — what about the masses who are underpaid and genuinely hurting because of it — this isnt just about pitchforks, its about humanity.
So again, what is fair? The source from which the 120 million households in the US derive their income is so varied that discussing employment, wages, and public policy with our fellow citizens is not only a different conversation depending on the participants — it’s a minefield of opinions and experiences getting tangled up with the true question of what is universally fair. Three in five working Americans are paid hourly, (BLS 2011), so I am wholeheartedly in support of a universal minimum living wage as a starting point.
Without diving too deeply, I suggest a fair amount in today’s economy is dictated by the other end of the equation — how we use that amount with respect to our survival. The need for shelter, like food, water, and healthcare, is universal, but they all require currency to acquire.
Compare the price of a small apartment with the wages of retail or restaurant workers in this country and it is not tough to conclude the current minimum wage is far short of what it takes to survive. Popular are the memes that illustrate the average cost of a small apartment vs. the minimum wage. Instead of independent survival, workers end up with multiple jobs, sharing housing with multiple workers, and the American dream — if only to have some free time and some personal space is left to those who are fortunate enough to earn more. There was a time when $15 an hour was about all I made as a young restaurant worker. It was not a lifestyle of retirement planning or even vacations but it was enough to survive. I could pay my rent, I could afford an OK car and I had a small amount of disposable income for entertainment and libations. Granted, it was 15 years ago and prices have changed — and I had roommates and help from the family — so even at that rate we are not talking about living in the lap of luxury for me or anyone. We are talking about the bare minimum.
$30,000 per year sounds like a lot, but is it? This is a country where we are required to purchase health care, transportation to work is a big expense for many, and retirement for the vast majority lies in the solvency of the Social Security system. Workers dont have nesteggs anymore, college is not affordable for most, and the idea of a vacation doesn’t exist in the minds of millions. Even today, as much as I want to push the idea that everyone should be able to take a paid day off on Labor Day, people would still want to work and earn more because of how ridiculously expensive it has become to live in this new world. Today is a work day, to be sure. And seeing folks calculate a “budget” based on the current minimum wage is a joke — those who survive on such scraps are bunking with roommates and eating noodles. Yeah, I even had a minimum wage job for a year or so —again with lots of help — and spent that year doing very little.
The institution of universal policies in my opinion requires fairness all around. Its tough to tell one group they need to sacrifice so that another thrives, and vice versa. It’s very easy to support a strong minimum wage when one is convinced we are trying to raise the floor for everyone, but for those already earning $15 an hour after years of hard work and elevation to also be convinced they are underpaid — it’s a whole tangent unto itself. Understanding the microeconomics of everyone’s revenue stream is perhaps impossible at this point in history, but the problem and its symptoms — economic inequity and inequality — are very real.
A great economic motivator and universal solution to the wage fairness problem, among others, is right in front of us. Universal Basic Income is an idea (likely) borne of combating theft in the 16th century, the premise being many who committed petty larcenies did so out of need in an inequitable society. Today its been touted as a solution to the upcoming problem of automation eroding the job market. Productivity and efficiency have been on the rise for so long with no end to the surge, that we are soon faced with the conundrum of creating unnecessary jobs, or worse, going without.
To be fair, there are other ways of dealing with the job crisis in the short term. Drastically lowering the retirement age, shortening the working week, or doing what some corporations did in the face of the Affordable Care Act — under-employing people. But this is not a long term solution, and it is not fair nor is it equitable, especially for those who want to work. Most especially for those who did the work that took our society to a world of automation and incredible efficiency — they should be able to earn, and as a matter of public policy we need to ensure people earn because again, our basic necessities are only available in exchange for currency.
Universal Basic Income not only produces an obvious surge in demand, it creates jobs for the industries that remain. When everyone has the ability to purchase basic goods and services, access is not enough, the marketplace thrives. Customers create jobs, without customers all the corporations in the world would fail.
Universal Basic Income also serves small, medium, and large enterprises as a payroll credit. Talk about a corporate handout! Not every citizen is going to take their $30k and cease working forever — but those who would do just that will have made the rest of us better off for not having their food or safety in the hands of those who do not want to be laborers. (We have all had bad experiences, haven’t we?) It also eliminates the need for the minimum wage, as long as UBI stays on par with what it takes to provide basic living requirements for the recipient. That and they can go off to their casino o’ capitalism and play with their “chips” (read:shares)all they want — folks will get paid rain or shine.
The incentive for workers to want more than a 1 bedroom apartment and the basics will always be there, and for those who wish to pursue other things a veritable renaissance is possible. At least, for the dreamers.
Universal Basic Income has a running start here in the US in terms of our social security system. Granted we are not all vested at the same amount and there are ways folks who never contribute benefit from the system, but insofar as offering every citizen a layer of basic security we are talking about input/output adjustments. Yes this will mean higher taxes, and a redefinition of what it means to draw benefits, but to simplify the disbursement of our federal expenditure is to reduce its cost of administration. Single payer makes a similar argument — lightweight and universal means a smaller cost overall. Consider it “publicizing” the first $30k of all worker wages, so as to ensure our mutual success.
Sure, we probably should wait until a certain age before paying benefits, and perhaps we should tax those who can afford it more heavily than those who cannot — especially since the lower wage earners spend 100% of their income and to tax them is to tax the consumer side of the marketplace — but the discussion needs to be had. This is no longer even a question of equity — those who are at the forefront of technology already insist its inevitable, or at least the need for it is. Addressing the upcoming crises while covering fair wage crises as well would be a boon for all.
As a supporter of Senator Bernie Sanders, I am in favor of universal solutions. Single payer healthcare is a no-brainer. Even the most conservative Americans understand that to save money on a large scale, eliminating middle-men and buying in bulk is incredibly effective. And the need for healthcare is something we all share, without equivocation.
Having been conscripted from the day of our birth to a society which relies on the exchange of currency for all our necessities — food, shelter, even water — it’s probably already a matter of (heretofore uninterpreted) law that we all have access to a basic supply of that currency. It could resolve a great many number of problems we are facing as well, to institute a universal basic income for the many.
It would also help the few, especially if they are employers!
Happy Labor Day everyone!
Raymond Braun
Executive Director, The Political Revolution PAC
