Where did the Minimum Wage Come From
The Federal minimum wage was signed into Law in 1938, by Franklin Roosevelt. The world was a much different place. It was a world of out-of-control corporate greed, and exploitation of the working class... wait a minute, that sounds familiar. Anyway in 1938, the world was still recovering from the excesses of the 1920's and the Stock Market crash of 1929. The world was looking down the barrel of the second German Cross-European road trip, and mass genocide. According to the Department of Labor, when it was instituted, the minimum wage was $0.25 per hour. In the last 75 years the very least you can legally pay someone has only increased $7. The average cost of a house in 1938 was $3900, whereas of June, this year the average cost of a new home is $295,000, according to the U.S. Census Bureau. If minimum wage had increased at the same rate as home prices, we would be making 18.93 an hour, and the average wage would be $129,000 per year.
Wages and Workers
In 1938 the average yearly salary was $1700, per year, whereas today it is $49,900. Wages have increased only about 35%, where as the cost of living has increased by over 50%. Wages are paying for less, and people are working longer hours.
Recession... or Sacrifice on the Altar of Commerce
Boom and Bust
As a country we have seen several boom and bust times. We tend to have periods of economic growth, followed by sharp economic decline that dips into recession, for a few months or years, until some other breakthrough or disaster spurs growth again. This has happened more than a hundred times since the minimum wage was instituted.
War! What is it good for... the Economy, apparently.
If you chart the timeline of recession in the U.s. it tends to follow the same timeline of war. It's been said several times that if you want to end a recession, start a war. War has turned into a business and business is good. The reasons for this come from three areas, production, workforce reduction, and increased government spending. Production of comestibles, textiles, munitions, and ancillary products for the troops have an immediate impact on the economy, for obvious reasons. As more military age men are going overseas to kill the other guys, or support one group of other guys killing another group of other guys, there is less competition for each job, so there are more opportunities in the job market for those left. Whether you agree or disagree that government spending spurs economic growth, one thing can't be debated, very few groups or individuals have as much money as the U.S. Government. If the government is buying their clothes, weapons, food and dvd's for the troops, they also need more support staff, which means they are putting more money into the cycle of production and purchase.
It's a sad that we haven't thought of a better way to make money, than by killing each other in gargantuan portions, however every recession since 1938 has been precipitated by the end of the last war, and generally ended around the time the next one started. Rather than using our resources to spur innovation, and encouraging growth at the consumer level, we send the consumers somewhere else to shoot at and get shot at.
Those Poor CEO's or Everything You Always Wanted to Know about Greed...
If you look at the Top 10 of the Fortune 500 Companies in the U.S., number 1 is Walmart Stores, Inc. Walmart showed profits of appr. $16 million dollars, and the CEO Michael Duke grossed somewhere between $20Million and $35Million, depending on which report you read. The average Walmart Worker makes $8.75 per hour, meaning they will make around $18,000 per year. The CEO reports do not include bonuses or other ancillary benefits. At this rate it would take the average worker working 260 years, 24 yours a day to make what this man makes in one year. The people who make sure that Walmart continues to operate make .0000004 percent of Michael Duke's annual salary.
The Walton family brings in several billion dollars in profits from their stock in the company, and according to SEC filings contribute more than $300,000 dollars to mostly Republican candidates and causes, that mostly enhance their fortunes. Mitt Romney benefited greatly from the Walmart contributions in the last election, and ran on a platform of deregulation and more tax cuts for those earning over $200,000 per year, and eliminating the estate tax. If Romney had been elected, with a majority Republican House, and small-gap minority Senate, most of these proposals would have probably swept through Congress with little to no opposition
Recent news stories have reported the plans of Walmart to build several stores in Washington DC, and have since pulled back on, when the City decided to implement a new minimum wage of $12.50 per hour. Even though this would increase the average worker salary, but almost half, it would barely make a dent in Walmart's bottom line. According to Josh Eidelson, at the Nation, the Mayor appears to be considering vetoing the bill, but the council almost has a veto-proof majority. One of the main reasons Walmart can get away with their low wages and low prices, is because most of the manufacturing takes place in developing nations, and stifles Union organization in their stores. Even though it appears Walmart may be making a push to purchase more US made products, they have been saying this for several years, and usually around the time they start appearing in the news.
Disclosure: I shop at Walmart. I live in Oklahoma City, where Walmart has killed 99% of competition, and I do shop at the other store, Homeland, when I have the money to afford it.
Walmart is not the only large company that fucks over it's workers and fights Unions, thus keeping the wage low, but they are the most prominent.
McDonalds Restaurants just released a helpful website with information on how to make it on the very low salary MickieD's pays. It includes a line that pretty much says you need a 2nd job if you work at McDonalds. Hopefully you don't have children. But McDonalds is a job for kids, right? Have you looked at the workers at McDonalds, lately? There are about 50/50 young High Schoolers and working adults, at the fourteen local stores around my home and work.
Companies like Walmart and McDonald's are part of a larger, systemic problem. This is not jealousy about not having money, but who needs to make Billions of dollars, especially when the people who make that possible will never see a million dollars in their life, barring an extreme stroke of luck.There are several myths surrounding minimum wage, that is keeping the debate on a low boil. These myths are dangerous, and help keep the working poor in the bottom 99% of wage earners.
Wage Disparity is Killing the Working Poor
Wage Disparity is Killing the Working Poor
First and foremost is that minimum wage is a living wage. If people don't want to work for minimum wage, they should get a good education, go to college and then they can get a GOOD job. There are several problems with this thought. Minimum wage is the bare minimum you are legally allowed to pay someone. If you are making so little you can't afford to eat, much less pay rent, how is one supposed to afford the exorbitant prices of college? Don't start on student loans, when student loan debt has just topped $9 to $1T, and oustanding debt is over $37M.
Myth 2, if you want more than minimum wage, just get a second job. Several million people who make minimum wage already have a second job. You know what else they do? Nothing. You are working 16 hours a day making 15.50 an hour, to be able to afford, food, electricity, clothes, rent, and I really hope you don't have children, or anyone else you are responsible for.
Myth 3, Minimum wage is for only for teenagers. According to the Department of Labor almost 2/3 of minimum wage earners are adults. The economy crash of 2007 all but destroyed several industries, sending many working adults back to the bottom of workplace ladder. Most people who earn minimum wage will never leave that income level, because they can't afford the time off work, to go find a better job, or get a better education, or different vocational training.
Finally, raising the Minimum Wage hurts businesses. If this were true, we would have almost no industry, alive today. Minimum wage has been increased almost 30 times since it was instituted. If increase in wage laws killed jobs, there would be no business in the U.S. by now. Increasing the minimum wage is actually good for the economy, because if people don't have to choose between food and bills, they are more likely afford to buy other things, such as computers, movies, couches and toys for their kids. The less people make, the less they spend. the more people make the more likely they are to be able to afford medical insurance, which means less time off work, due to illness. The more money people make the more they have to spend on better food, which means less health problems, as well.
I have been a part of the working poor since I was 16, but even I have never been more than one meal away from the street. I have known people that have lived on the street but still held down a job. Before she passed away I watched my mother working three jobs at a time to make sure we had food on the table, because she wasn't born into money, and didn't get a college education. My mother was very intelligent, but was not very educated, and so never made it very far in life, dying in poverty without insurance, and staring down the barrel of another several years of dialysis, after her replacement kidney failed. I make twice the current minimum wage, and barely keep my head above water, while trying to support my family.
Wages are depressed in this country because people in the top 1% of income earners can't stand the thought of losing 1 penny to those in the lower 99%. That is who opposes raising the minimum wage. If you make minimum wage and support those in the top 1%, you are voting against your own best interest. You are telling your kids that they aren't good enough, because they chose poorly when they decided you were going to be their parents. You are supporting the myths as outlined above, and thus are perpetuating the cycle of the working poor. Minimum wage was supposed to be a path to get to the middle class, now it is a anvil sitting on the chest of the working poor, keeping them from "rising above their station." It is the lowest rung on the social ladder, that has re-instituted the class society of America culture that existed in reality, rather than defacto, until 1938.