On February 23, Robert Reich introduces a petition to raise the minimum wage to $15 per hour.
Democrats are readying a major push in mid-March to raise the federal minimum wage to $10.10 an hour. That’s not enough. It should be raised to $15. Here are 7 reasons why:
(1) Had the minimum wage of 1968 been adjusted for inflation, it would be well above $10 an hour today. But the typical worker today is also more than twice as productive as then. Adjusted for both inflation and productivity gains, therefore, the minimum wage should be at least $15 an hour. (2) $10.10 an hour isn’t enough to lift all workers and their families out of poverty. This is especially true for millions of low-wage workers who want full-time jobs but can only find part-time work. Most low-wage workers aren’t teenagers; they’re major breadwinners for their families. (3) Because some employers now pay wages that don’t lift their employees out of poverty, the rest of us pay for their Medicaid, food stamps, housing, and other assistance — in effect, subsidizing these low-wage employers. (4) Some jobs may be lost if the minimum is raised to $15, but many more people will be lifted out of poverty. And because low-wage workers will have more money to spend, their spending will create many more jobs. (5) Such a wage increase is more likely to come out of profits than be passed on in higher prices because most employers of low-wage workers are in intense competition for customers. (6) Since Democrats will probably have to compromise in order to get some Republican votes for any minimum wage increase, it’s doubly important to aim for what’s right in the first place. (7) Finally, at a time in our nation’s history when 95 percent of all economic gains are going to the top 1 percent, raising the minimum wage to $15 an hour is the decent thing to do.
Robert Reich exposes the fallacy of his argument when he states “…the typical worker today is also more than twice as productive as then [1968].”
While I am not opposed to the concept of a “minimum wage,” economic productivity is a bigger part of the story. Those arguing its support basically argue that labor is producing more value today, but working people aren’t seeing any of the gains. Who has walked away with the proceeds from all that productivity? But contrary to general belief, when looked at through the lens of two factors of production––human and non-human––labor is not becoming more productive; the non-human means of production is driving the productivity gains.
Whether or not raising the minimum wage is harmful and will cause less employment should be discussed within the larger scope of economic inequality. The proposed measures are at best a sedative to ease the pain of deteriorating livelihoods, but not the solution that is necessary to significantly address income disparities between the wealthy ownership class and the propertyless, non- and under-capitalized American majority.
Technological change makes tools, machines, structures, and processes ever more productive while leaving human productiveness largely unchanged (our human abilities are limited by physical strength and brain power––and relatively constant). The technology industry is always changing, evolving and innovating. The result is that primary distribution through the free market economy, whose distributive principle is “to each according to his production,” delivers progressively more market-sourced income to capital owners and progressively less to workers who make their contribution through labor.
People invented tools to reduce toil, enable otherwise impossible production, create new highly automated industries, and significantly change the way in which products and services are produced from labor intensive to capital intensive––the core function of technological invention. Most changes in the productive capacity of the world since the beginning of the Industrial Revolution can be attributed to technological improvements in our physical capital assets, and a relatively diminishing proportion to human labor. Physical productive capital does not “enhance” labor productivity (labor’s ability to produce economic goods). In fact, the opposite is true. It makes many forms of labor unnecessary. Because of this undeniable fact, binary economist Louis Kelso asserted that, “free-market forces no longer establish the ‘value’ of labor. Instead, the price of labor is artificially elevated by government through minimum wage legislation, overtime laws, and collective bargaining legislation or by government employment and government subsidization of private employment solely to increase consumer income.”
The role of physical productive capital is to do ever more of the work, which produces income. Full employment is not an objective of businesses. Companies strive to keep labor input and other costs at a minimum in order to maximize profits for the owners. Private sector job creation in numbers that match the pool of people willing and able to work is constantly being eroded by physical productive capital’s ever increasing role.
Furthermore, according to Kelso, productive capital is increasingly the source of the world’s economic growth and, therefore, should become the source of added property ownership incomes for all. Kelso postulated that if both labor and capital are independent factors of production, and if capital’s proportionate contributions are increasing relative to that of labor, then equality of opportunity and economic justice demands that the right to property (and access to the means of acquiring and possessing property) must in justice be extended to all. Yet, sadly, the American people and its leaders still pretend to believe that labor is becoming more productive.
In reality, raising the minimum wage is the equivalent of taxing employers for the work done by their employees and giving the proceeds to the workers. And that works against employment, not in favor of it, and penalizes the ownership class for their “tools” of productivity. Advocates for a minimum wage should instead be advocating for ensuring that EVERY citizen benefits from income derived by the ownership of productive capital assets, and eliminate the need for government measures that redistribute income in one form or another––through coerced trickle-down. In other words, accomplished through redistribution achieved by the rigging of labor prices, by taxation to support redistribution and job “creation,” or subsidization by inflation and by all kinds of welfare, open and concealed.
For REAL solutions to economic inequality, support the Agenda of The Just Third Way Movement at http://foreconomicjustice.org/?p=5797, Monetary Justice at http://capitalhomestead.org/page/monetary-justice, and the Capital Homestead Act at http://www.cesj.org/homestead/index.htm and http://www.cesj.org/homestead/summary-cha.htm.
