surplusvalue

We’ve been over this before but, like a bad penny, it just keeps coming back. . .

Conservatives and liberals seem not to agree about anything these days (as my students often complain). But there is one idea they do share: the wages-system needs to be protected at all costs.

Economists, politicians, and columnists from the two ends of the political spectrum do have different starting points: conservatives believe that workers are at bottom shirkers, and therefore need to be forced off their “dependency” on government programs in order to lower the reward for non-work, while liberals start with the idea that workers today are not being paid enough, at least those at the bottom, and the minimum wage should be raised in order to raise the reward to work.

Yet, while conservatives and liberals have different starting-points, they agree that there is a fundamental dignity in working for someone else. Here’s the liberal version, from Charles Blow:

No one should ever endure the kind of economic humiliation that comes with working a full-time job and making a less-than-living wage.

There is dignity in all work, but that dignity grows dim when the checks are cashed and the coins are counted and still the bills rise higher than the wages.

Most people want to work. It is a basic human desire: to make a way, to provide for one’s self and one’s loved ones, to advance. It is that great hope of tomorrow, better and brighter, in which we can be happy and secure, able to sleep without hunger and wake without worry.

But it is easy to see how people can have that hope thrashed out of them, by having to wrestle with the most wrenching of questions: how to make do when you work for less than you can live on?

Really? A “basic human desire”? We all warn our students about making such sweeping, universal students—especially when not a shred of evidence is presented. But the problem here is worse. It’s the presumption that people want to work (instead of being forced to work) and that working is somehow making one’s own way (instead of being dependent on the whims and wishes of private employers).

In other words, it’s the same argument conservatives make: everyone wants (and at least should want) to be a worker. Except, of course, for those at the very top, who are dependent on getting a cut of what workers produce.

Abbott-1

Sorry. I just couldn’t resist this one from Barry Levinson, on the minimum wage according to the logic of Abbott and Costello:

Lou: I am below the poverty line, things are desperate.
Bud: Then you need a job… go to work, Lou.
Lou: I have a job!
Bud: Then all is well.
Lou: But I can’t afford to live and support my family.
Bud: I thought you said you had a job.
Lou: I do.
Bud: Then why’d you say you can’t support your family?
Lou: Because I can’t!
Bud: But you just said you had a job.
Lou: I know.
Bud: Do you have a job or are you living below the poverty line?
Lou: I’m living below the poverty line. A lot of us are.
Bud: Then you don’t have a job?
Lou: I do have a job. A minimum-wage job that I can’t even support my family on.
Bud: Are you working illegally?
Lou: It’s a legal job, Bud!
Bud: A legal job and you’re living below the poverty line?
Lou: Precisely.
Bud: Oh, I get it. You’re working part-time?
Lou: It’s full-time. Forty hours a week! They need to raise the minimum wage.
Bud: But if they raise the minimum wage, it will put people out of work.
Lou: Who?
Bud:The people who are living below the poverty line.
Lou: I’m living below the poverty line!
Bud: Exactly. Isn’t it better to be working and living below the poverty line, than not working and living below the poverty line? That way you have a sense of pride.
Lou: But I need more money to get by.
Bud: Do you want to put people out of work? Do you want to be responsible for them losing their jobs?
Lou: No.
Bud: That’s the spirit. You all share in getting less.
Lou: Why can’t we all share in getting more?
Bud: That’s socialism.
Lou: Then what’s sharing and getting less?
Bud: That’s capitalism!
Lou: Why is getting a little more socialism?
Bud: Because if you all get a little more, someone is going to get less.
Lou: Who?
Bud: The person who used to get more. The job makers.
Lou: Why can’t they make a little less?
Bud: Well, that’s un-American! This is the free market… Do you want to destroy
American capitalism?
Lou: Of course not.
Bud: Do you want to stifle the American economy. Suffocate ingenuity?
Lou: No.
Bud: That’s the spirit.
Lou: But I can’t support my family. Bud, I work 40 hours a week, 52 weeks a year, no vacations, and I still can’t support my family.
Bud: Criticize. Criticize. Be thankful you have a minimum wage. There was a time you could have been paid less than minimum.
Lou: There was less than minimum?
Bud: Yes! Be thankful that these are the good times.

Bors-16-04

Special mention

April 16, 2014 marketvalue

CEO-worker-2013

According to the AFL-CIO’s latest “Executive Paywatch” report, the CEO-to-average-worker-pay ratio rose last year to 331:1. And the ratio of CEO pay to the minimum wage was much higher: 774:1.

That’s because, in both cases, workers’ wages remained more or less constant while the amount of surplus those workers created that ended up in the pockets of the CEOs of the nation’s largest corporations continued to rise.

As the AFL-CIO argues in their report:

America is supposed to be the land of opportunity, a country where hard work and playing by the rules would provide working families a middle-class standard of living. But in recent decades, corporate CEOs have been taking a greater share of the economic pie while wages have stagnated and unemployment remains high.

High-paid CEOs of low-wage employers are fueling this growing economic inequality. In 2013, CEOs of the Standard & Poor’s (S&P) 500 Index companies received, on average, $11.7 million in total compensation, according to the AFL-CIO’s analysis of available data from 350 companies.

Today’s ratio of CEO-to-worker pay is simply unconscionable.

tumblr_mi4ksm7O2h1r6wmavo1_1280

Is there any academic economics book that has elicited as much interest in the past decade (and perhaps longer) than Thomas Piketty’s Capital in the Twenty-First Century?

All kinds of friends and colleagues have been asking me about it and sending me links. And, everywhere I turn, there seems to be a new review of the book.

To be honest, I just received my copy of the book. I haven’t read it yet and probably won’t be able to find the time to do so until the semester is over. (But, as I indicated, I will be teaching it in the fall.) So, while I’ll hold off on commenting on the content of the book itself until I’ve had a chance to carefully work my way through it, I do want to mention a couple of things.

First, my sense is the book is generating so much attention precisely because of a certain nervousness out there, the fact that capitalism is facing a legitimacy crisis right now. The capitalists’ project of becoming a universal class seems to have become derailed in the midst of the Second Great Depression, and Piketty’s discussion of the return of inherited wealth in the second Gilded Age speaks directly to that concern.

Second, many of the reviews I’ve read imply—and often explicitly state—that “our” views about capitalism are being challenged by the general rise in inequality and, in particular, by Piketty’s focus on the returns to capital. Paul Krugman’s essay in the New York Review of Books is a good example: “The result has been a revolution in our understanding of long-term trends in inequality.” “This is a book that will change both the way we think about society and the way we do economics.” “We’ll never talk about wealth and inequality the same way we used to.” (Emphasis added in all cases.) And so on.

Excuse me but who is this “we” and “our”? I expect I’ll learn a lot from reading Piketty’s book (especially since it includes such evocative phrases as “the past tends to devour the future”) but, please, there are a lot of us who have been writing and teaching about capital and inequality for a very long time. They are central to how we’ve long understood and analyzed the changing dynamics of capitalist economies. I doubt, therefore, that Piketty’s book will contribute to a revolution in our understanding of long-term trends in inequality or in how we think about society and the way we do economics.

But clearly Piketty’s book may have that effect on how other people make sense of capital and inequality—economists who have spent their careers ignoring what their less-orthodox colleagues have been writing and teaching for many, many years.

yueyuenstrikea

Thousands of workers at a major shoe factory in China, which employs more than 40,000 workers in Dongguan and supplies brands including Nike and Adidas, are striking over social security payments.

Workers at the Yue Yuen factory, in the southern industrial hub Dongguan, are demanding better social insurance and housing fund contributions.

The dispute has been ongoing since early April, with workers reportedly rejecting an offer from the company.

China has faced growing labour strikes in recent years.

The Yue Yuen workers are said to be angered at unpaid social security payments.

OK-min wage

Oklahoma Governor Mary Fallin signed a bill [ht: sm] this past Monday prohibiting any city in the state from establishing mandatory minimum wage and employee benefits, including vacation or sick leave days.

In 2012, 64,000 workers earning the federal minimum wage or less made up 7.2 percent of all hourly paid workers Oklahoma. From 2011 to 2012, the portion of hourly paid workers in Oklahoma who earned at or below the federal minimum wage rose from 6.8 to 7.2 percent. The percentage of workers earning less than the federal minimum rose 1.5 percentage points in 2012 to 3.9 percent, while the share earning exactly the minimum wage fell 1.0 points to 3.3 percent. Oklahoma’s proportion of hourly-paid workers earning at or below the prevailing federal minimum wage ranked third highest among the 50 states and the District of Columbia.

minwage_ok_chart1