Hundreds of fast-food employees in Detroit walked off the job today, temporarily closing down a handful of restaurants as part of a growing U.S. worker movement that—as we’ve seen in recent months, in New York City and Chicago—is demanding higher wages.
Actually two charts: corporate profits (a new record high) and wages (a new record low) as a share of Gross Domestic Product.
And Henry Blodget’s view is that
our current obsessed-with-profits philosophy is creating a country of a few million overlords (shareholders) and 300+ million serfs (employees).
It is also resulting in employees sharing less of the corporate wealth that they spend their lives creating than they ever have before.
That’s not what has made America a great country. It’s also not what most people think America or other lands of opportunity are supposed to be about.
I’d put it a bit differently: our current obsessed-with-profits philosophy is creating a country of a few million overlords (members of boards of directors of corporations, plus those who get a cut of the surplus they appropriate) and 300+ million wage-laborers (employees). It is resulting in employees sharing less of the corporate wealth that they spend their lives creating than they ever have before. That’s precisely what has made America a great country in the midst of a Second Great Depression. Even though it’s not what most people think America or other lands of opportunity are supposed to be about.
Fast food and retail workers are taking to the streets of downtown Chicago today to demand higher wages.
“These are poverty wages and homelessness wages,” Lorraine Chavez of the Workers Organizing Committee of Chicago.
They are calling it the “Fight for 15″ to get $15 an hour. The organization says that a single adult Chicago with a child needs a wage of $21 an hour to pay for necessities such as clothing and rent.
Many workers are forced to work two or three jobs to support a family, according to Chavez.
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source [ht: gh]
Some have begun to worry about the growth of oligopolies across a wide range of industries, and the effect this trend might have on prices to consumers.
But they often forget about the bottom line: price increases are often being kept in check—even while profits rise—because the workers who produce, transport, and sell the commodities in those industries are being squeezed by their employers.
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I often hear the argument that neoclassical economists oppose an increase in the minimum wage.
But the argument is wrong. Neoclassical economists, like Casey Mulligan, actually want to lower the minimum wage.
Market wages normally tend to increase over time with inflation and as workers become more productive. As long as the minimum wage is a fixed dollar amount, the tendency for market wages to increase over time means that economic damage from the minimum wage is shrinking. That’s one reason that economists who see benefits of minimum wages would like to see minimum wages indexed to inflation, allowing the minimum wage to increase automatically as the economic damages fell.
But these are not normal times. The least-skilled workers are seeing their wages fall over time, largely because they are out of work and failing to acquire the skills that come with working. Moreover, the new health care regulations going into effect in January are expected to reduce cash wages, as many employers of low-skill workers are hit with per-employee fines of about $3,000 per employee per year, as the law mandates new fringe benefits for other employers and low-skill workers have to compete with others for the part-time jobs that are a popular loophole in the new legislation. (The minimum wage law restricts flexibility on cash wages, by establishing a floor, but makes no rule on fringe benefits.)
To keep constant the damage from the federal minimum wage, the federal minimum wage needs not an increase but an automatic reduction over the next couple of years in order for it to stay in parallel with market wages.
The fact is, lowering the minimum wage is not what is called for by the neoclassical model of the labor market. If he were intellectually honest, Mulligan would actually have to call for the abolition of the minimum wage.
And the rest of us for the abolition of the wages system itself.
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