Minimum Wage Increase

Maximum Work for a Minimum Wage


Minimum Wage IncreaseIn President Obama’s recent State of the Union address, he announced his intention to raise the minimum wage to $9.00 per hour by 2015. “Tonight, let’s declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty.”

However, this mild increase will barely scratch the surface of poverty in America. This “reform” must be understood as just another half-measure that has come to be expected of the Democratic Party. To applaud the President on this is like applauding his “support” for gay rights by allowing gays into the military, while neglecting every other aspect of inequality. Or praising his healthcare reforms, which amounted to little more than a handout to the big insurance companies. Now Obama is “for” increasing the minimum wage, but many of those making the minimum wage will still have to live in poverty. This is another page out of Obama’s playbook: it sounds nice enough but it fails to address the problem in any meaningful way.

The paltry increase is even less than his 2008 campaign promise of $9.50 per hour ($10.16 per hour in today’s dollars) by 2011. Obama has dropped his already weak proposal by 12% in terms of real wages! Neither of the proposed minimum wage increases would be enough to lift a household of four, with two people working full-time minimum wage jobs, out of poverty. For this we would need a minimum wage of at least $11.53/hr. Yet Obama still claims his proposal will lift people out of poverty! It seems Obama, who is undoubtedly a very busy man, didn’t have time to crunch the numbers, or he is purposely misdirecting his listeners. We leave it to the reader to decide.

The minimum wage was first set at $0.25 per hour by Franklin D. Roosevelt in 1938 ($4.08/hr in today’s dollars). Previous attempts to establish minimum wages at the state level were blocked by the Supreme Court on the ludicrous grounds that a minimum wage would deprive workers of the right to set the price of their own labor. During the postwar boom years—which were possible only on the basis of rebuilding the world after the most catastrophic destruction and loss of human life in history—capitalism experienced a prolonged boom. Decent wages, union jobs, and relative class peace built up the material conditions for the American Dream.

But capitalism inevitably reached its limits, and the mid-70s marked the end of this upward curve of development. As a result, jobs were lost and living standards were driven down. As CNN put it, “The federal minimum wage has lost 30 percent of its purchasing power in recent decades… If the minimum wage had kept pace with the cost of living since 1968, it would now equal $10.56. The White House says that raising the wage to $9 restores its inflation-adjusted value to where it was in 1981.” It seems that Obama, instead of wanting to move forward and advance the cause of low-income workers, will settle for bringing the minimum wage “forward” to the Reagan era. What this snippet from CNN doesn’t tell you is that another study found that if the minimum wage were tied to labor productivity starting in 1968, the current minimum wage would be $21.72/hr! Over this period, instead of rising wages, we’ve seen a record share go to corporate profits.

Every time there is a push for raising of the minimum wage, there are loud moans coming from every business executive. To quote one of their favorite mouthpieces, John Boehner: “When you raise the price of employment, guess what happens? You get less of it.”

In reality, there is little weight to what he claims. Businesses always want workers to be as productive as possible. There is no incentive to have people on the job who are not working every second they are clocked in, which means that ideally, employers want to operate their businesses with as few workers as possible.

This rings especially true in minimum wage jobs. If you have ever worked at minimum wage, you see quite plainly that they consistently understaff  the workplace in order to raise profits. So there is not much room to cut workers, especially from those workplaces where they are already squeezing huge profits out of a bare minimum staff of wage workers. Far from being “job creators,” corporations are “profit chasers.” Job creation is not the aim of the system: profit-making is. Capitalism simply cannot provide good jobs to everyone.

When President Obama observes that the USA is the wealthiest country on earth and that there is no reason for people to be living in poverty, he is absolutely right. But as a representative of the capitalist class, Obama cannot draw conclusions or offer solutions that truly benefit the working class.

We need the immediate implementation of a $16 per hour minimum wage, tied to inflation, along with a universal guarantee of employment. A decent job should be a right, not something we fight for amongst ourselves while a few at the top are getting obscenely wealthy. By cutting the workweek to 30 hours with no loss of pay, we could put the unemployed to work and harness the unused industrial and human productive capacity of society, which currently sits idle. This would simultaneously solve the problem of understaffing.

Ultimately, there is no answer to this problem on the basis of private ownership of the means of production (factories, equipment, etc.). As long as labor is something that is bought and sold, those who own the means of production (the capitalists) will always find a way to buy it cheaper. This invariably keeps sections of the population in perpetual poverty. We need a system that solves these contradictions. When the workers themselves have control over the means of production, they benefit directly from the wealth they produce. America has so much wealth, but the problem is that the wealth is owned by so few.

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