On April 12, 2019, Negin Owliaei writes on Inequality.org:
Last month, McDonald’s announced a dramatic about-face in its political priorities. After years of strikes and protests from labor activists, the burger giant has decided to end its involvement in lobbying campaigns against increasing America’s paltry $7.25 federal minimum wage.
It’s a big victory for the Fight for $15.
It’s been less than a decade since a few hundred fast-food employees walked off the job to demand a $15 wage and a union. Now, they’re a global movement that’s fundamentally changed the conversation on the rights of low-wage workers.
For the most part, federal lawmakers have watched idly while cities and states have boosted their minimum wages up to $15. Just last month, Maryland became the sixth state — and the third this year alone — to phase in a $15 minimum wage after lawmakers overrode Republican Governor Larry Hogan’s veto.
But the idea now has more traction in Congress thanks to the recently introduced Raise the Wage Act, which would set a national minimum pay of $15 an hour by 2024. The legislation would lift pay for almost 40 million workers, the Economic Policy Institutehas found.
As the push for higher wages continues to gain steam across the country, the movement promises to keep fighting: Workers greeted the new announcement from McDonald’s with more protests.
It’s not enough to decide, they say, that you “wish to advance, not impede” the discussion on a livable wage by simply ending your campaign against an enormously popular policy.
Employees are still calling on the fast food franchise pay $15 an hour and respect their right to unionize. That’s a pretty fair demand, considering their CEO made nearly $22 million in 2017 — over 3,100 times what the typical McDonald’s employee took home that year. They’re also continuing their fight to make the company take workplace harassment seriously.
McDonald’s is often — and rightfully — portrayed as a villain in the fight for fair wages and workplace protections. But it’s also only one player in an economy that continues to tighten its chokehold on anyone who works for a living.
Raising the federal minimum wage is one necessary change we can make to a system that throws endless amounts of money towards the rich while balking at workers’ demands to be able to live off their earnings.
How can we begin to imagine the inequity baked into that system?
Take a look at Wall Street’s bonus culture to see just how warped our economy has become. Last year, Wall Street employees took home $27.5 billion in bonuses alone. That pool of money could pay all of the United States’ full-time minimum wage workers more than three times over, a new report from the Institute for Policy Studies has found.
Those bonuses mean the average Wall Street employee added $153,700 to their base pay in 2018 — a truly mind-boggling sum of money that’s increased by 1,000 percent since 1985. If the minimum wage had grown at that rate, McDonald’s workers would be making over $33 an hour today.
These staggering numbers go a long way toward illuminating how stark the concentration of wealth and power has become in this country. They also highlight the enormity of the task of remaking our economic system so that it works for everyone, not just CEOs and Wall Street bankers.
But, thanks to Fight for $15, we’ve been given a clear place to start: $15 and a union.
Gary Reber Comments:
What American workers need and want is more income. Who can blame them for seeking more income. In the case of the Fight for $15, they have organized walk-out and protests, and want to see union representation.
On July 12, 2017, Professor Walter E. Williams concluded in an article on The Daily Signal that alternative to raising the minimum wage was: “The best way to help low-wage workers earn higher wages is to make them more productive, and that’s not accomplished simply by saying they are more productive by mandating higher wages.”
But, as with virtually all articles that address economic inequality, Professor Williams nor this article’s author, Negin Owliaei, put forth concrete policies or financial mechanisms to make people more productive. Virtually every article concludes with either raise the minimum wage or provide an Unconditional Basic Income.
What Professor Williams pointed out, which should be obvious to anyone with common sense, a minimum wage increase is fundamentally a wage cost increase to business owners without increasing productivity on the part of the people employed. See the article and my comments at http://www.foreconomicjustice.org/?p=17240.
The labor union movement should transform to a producers’ ownership union movement and embrace and fight for economic democracy. They should play the part that they have always aspired to — that is, a better and easier life through participation in the nation’s economic growth and progress. As a result, labor unions will be able to broaden their functions, revitalize their constituency, and reverse their decline.
Unfortunately, at the present time the movement is built on one-factor economics — the labor worker. The insufficiency of labor worker earnings to purchase increasingly capital-produced products and services gave rise to labor laws and labor unions designed to coerce higher and higher prices for the same or reduced labor input. With government assistance, unions have gradually converted productive enterprises in the private and public sectors into welfare institutions. Binary economist Louis Kelso stated: “The myth of the ‘rising productivity’ of labor is used to conceal the increasing productiveness of capital and the decreasing productiveness of labor, and to disguise income redistribution by making it seem morally acceptable.”
Historically and in its present form, the labor movement is destructive in that it agrees with the idea that propertyless people should exist to serve those who own property. The labor movement doesn’t seek to end wage slavery; it merely seeks to improve the condition of the wage slave. If it actually cared about human rights and freedom, it wouldn’t call itself the “labor movement.”
Kelso argued that unions “must adopt a sound strategy that conforms to the economic facts of life. If under free-market conditions, 90 percent of the goods and services are produced by capital input, then 90 percent of the earnings of working people must flow to them as wages of their capital and the remainder as wages of their labor work… If there are in reality two ways for people to participate in production and earn income, then tomorrow’s producers’ union must take cognizance of both… The question is only whether the labor union will help lead this movement or, refusing to learn, to change, and to innovate, become irrelevant.”
Unions are the only group of people in the whole world who can demand a real Kelso-designed ESOP, who can demand the right to participate in the expansion of their employer by asserting their constitutional preferential rights to become capital owners, be productive, and succeed. The ESOP can give employees access to capital credit so that they can purchase the employer’s stock, pay for it in pre-tax dollars out of the new assets that underlie that stock, and after the stock is paid for earn and collect the capital earnings income from it, and accumulate it in a tax haven until they retire, whereby they continue to be productive capital earners receiving income from their capital asset ownership stakes.This is a viable route to individual self-sufficiency needing significantly less or no government redistributive assistance.
The unions should reassess their role of bargaining for more and more income for the same work or less and less work, and embrace a cooperative approach to survival, whereby they redefine “more” income for their workers in terms of the combined wages of labor and capital on the part of the workforce. They should continue to represent the workers as labor workers in all the aspects that are represented today — wages, hours, and working conditions — and, in addition, represent workers as full voting stockowners as capital ownership is built into the workforce. What is needed is leadership to define “more” as two ways to earn income.
If we continue with the past’s unworkable trickle-down economic policies, governments will have to continue to use the coercive power of taxation to redistribute income that is made by people who earn it and give it to those who need it. This results in ever deepening massive debt on local, state, and national government levels, which leads to the citizenry becoming parasites instead of enabling people to become productive in the way that products and services are actually produced.
When labor unions transform to producers’ ownership unions, opportunity will be created for the unions to reach out to all shareholders (stock owners) who are not adequately represented on corporate boards, and eventually all labor workers will want to join an ownership union in order to be effectively represented as an aspiring capital owner. The overall strategy should assure that the labor compensation of the union’s members does not exceed the labor costs of the employer’s competitors, and that capital earnings of its members are built up to a level that optimizes their combined labor-capital worker earnings. A producers’ ownership union would work collaboratively with management to secure financing of advanced technologies and other new capital investments and broaden ownership. This will enable American companies to become more cost-competitive in global markets and to reduce the outsourcing of jobs to workers willing or forced to take lower wages.
Kelso stated, “Working conditions for the labor force have, of course, improved over the years. But the economic quality of life for the majority of Americans has trailed far behind the technical capabilities of the economy to produce creature comforts, and even further behind the desires of consumers to live economically better lives. The missing link is that most of those unproduced goods and services can be produced only through capital, and the people who need them have no opportunity to earn income from capital ownership.”
Walter Reuther, President of the United Auto Workers, expressed his open-mindedness to the goal of democratic worker ownership in his 1967 testimony to the Joint Economic Committee of Congress as a strategy for saving manufacturing jobs in America from being outcompeted by Japan and eventual outsourcing to other Asian countries with far lower wage costs: “Profit sharing in the form of stock distributions to workers would help to democratize the ownership of America’s vast corporate wealth, which is today appallingly undemocratic and unhealthy.
“If workers had definite assurance of equitable shares in the profits of the corporations that employ them, they would see less need to seek an equitable balance between their gains and soaring profits through augmented increases in basic wage rates. This would be a desirable result from the standpoint of stabilization policy because profit sharing does not increase costs. Since profits are a residual, after all costs have been met, and since their size is not determinable until after customers have paid the prices charged for the firm’s products, profit sharing [through wider share ownership] cannot be said to have any inflationary impact on costs and prices.”
Unfortunately for democratic unionism, the United Auto Workers, American manufacturing workers, and American citizens generally, Reuther was killed in an airplane crash in 1970 before his idea was implemented. Leonard Woodcock, his successor, nor any subsequent union leader never followed through.
The union movement should also expand beyond representing corporate employees and represent capital ownership empowerment for all propertyless citizens.
