The Agitator #82 - Living wage and strikers
by Oliver_Halle
 The Agitator
August 15, 2013 10:36 AM | 1954 views | 5 5 comments | 16 16 recommendations | email to a friend | print | permalink
Listening to reactionary talk radio is always an experience.  You never know what you didn’t know until one of these talking heads enlightens you in ways that go beyond your imagination.  One of the latest episodes involves the attack on minimum wage/low paid workers who are striking for a living wage in several cities around the country.  It began in NYC with McDonald’s and is spreading.  The workers are asking for $15/hour, which for 52 weeks comes to $31,200.  When you subtract all taxes and FICA, you are probably down to the mid-20s.  Take out rent costs, public transportation to get to work, groceries, clothing, and doctor and dental costs, and you are down to nothing.  And this doesn’t factor in a worker who is married and has a kid or two.
The conservative pundits behind the microphone are saying, though, that if a worker makes $8/hour, which comes to $16,640, s/he should be grateful just to have a job, that the owner of the business deserves to be rewarded for his success since it is the owner that bears the risk.  I completely agree with regard to the risk/reward part.  The argument continues that the low paid worker could better himself if s/he really wanted to by getting an education.  Admittedly, there is a large number of minimum wage workers who are teenagers that live at home.  I’m not as concerned about them as the person who needs the job just to survive, but many teenagers outside of Cobb County, Westchester, NY, Fairfield County, CT, and other wealthy areas, also provide for their less fortunate families, something that isn’t much discussed. 
The worker that has the ability to do better but not the opportunity to get an education is in a difficult place.  If that worker is providing for himself at a minimum wage, where would s/he get the time to go to school?  Where would the extra cash come from for tuition, commuting, books, and other fees?  Georgia, among other states, has cut back on the HOPE Scholarship and raised tuition and fees.  I have been fortunate to be able to help my kids through college and beyond.  Even though it came with many sacrifices, I consider myself “blessed” to have been able to do it, and I understand that it would have been difficult to impossible for them to have gotten decent educations without family help.  The return on that is that they are productive, taxpaying citizens, which is a good investment for everyone. 
The radio bloviators focus on how much it would cost the employer to pay a living wage, that adding perhaps a quarter to the price of a hamburger could create hardships for some purchasers, and that it could drive a business into bankruptcy.  One other argument is that employers will replace workers with technology to cut costs.  On that one I have to ask where these know-it-alls have been since technology is one of the biggest causes of replacing workers.     
Now for what these experts leave out of their attacks on the workers.  There are a few key points to put all this in perspective.  How much money do special interests pay, (banks, pharmaceuticals, the oil industry, etc.)  each year for lobbyists and campaign contributions to protect their special tax breaks, tariffs, “onerous” regulations, and other benefits that help to reduce or eliminate competition and maximize profits, frequently at the expense of others.  If they think that unions who represent low wage workers can compete with the money that the special interests can pony up, they are delusional.  But it’s easier to go after the unions than the corporate interests, who just might have enough clout to get a talk show host replaced. 
Consider too that the disparity between worker and C level pay since roughly 1980 has gone from about
40:1 to 300:1.   Let’s not overlook the golden parachutes given to failed business leaders who were rewarded for tanking their companies.  The most recent one of prominence is the former CEO of J.C. Penny, who walked away with over $10 million after destroying this once great store. 
It is important to also factor in the multiplier effect of the extra pay that low wage workers would get.  Every penny of that money would go back into the economy.  To contrast, tax breaks for the very wealthy result in approximately 27% of the extra money being spent, the rest going toward savings and not circulating.  It makes economic sense, and it is the right thing to do to pay people a living wage. 
Comments-icon Post a Comment
on balance
August 22, 2013

I did not know Cobb County Guy had to provide you his/her name to express his opinion. I guess you are one with the Obama admin and its concept of the 1st amendment.

How about you open a McDonalds and pay the wages that Foley thinks can be paid. Please remember that Foley is in a non labor intensive business which apparently causes lapses in logical, business thinking.
Oliver G. Halle
August 22, 2013
...more random thoughtsin response to Cobb County Guy: You make some great points. How about instead of paying a living wage, businesses cut wages in half, cut benefits, and pay themselves and the shareholders even more? Great spectator sport watching the race to the bottom. Of course the workers who have sweat equity in doing actual work won't have any money to spend, but at least all the "investors" will. And we know that they spend all of their savings, like the record amount of $3 trillion that businesses are sitting on right now instead of spending it. So much for circulating "savings" into the economy.

Kevin Foley identifies himself and anyone can check on his business to see what kind of employer he is. That's a lot more than Cobb County Guy is willing to do. CCG should tell the readers who he is, if he is an employer, a worker, or someone who lives off of an inherited trust fund. That way readers can decide if CCG's comments should be taken seriously.

August 21, 2013
Random thoughts...

Where do the stockholders figure in this, including, for example, pension funds holding McDonald's stock?

I see KF responded. Let's ask him to determine the median income for his employees. Then, for all employees under that level, give them a 20% raise. The extra money in their pocket will be spent and stimulate the economy just a skosh (sorry for the technical jargon).

No, wait, let's make it 30%. We'll stimulate more economic activity.

Aw, hell, double everyone's salary! We will legislate wealth for everyone!

About that extra money in the pockets of the wealthy derived from tax breaks, that goes toward savings, as you say. What do you think "savings" means? Investments and loans, maybe? Aren't these good things? Don't you think private investors will make better use of the money than Gubmint "investors?" Solyndra comes to mind.

OTOH, I agree about the golden parachutes for executives who fail. But, that is a corporate governance issue.
August 15, 2013
Minimum wage jobs are entry level, starter jobs. A worker gets experience at SOMETHING and demonstrates the ability to function as an employee. Show up when expected, adapt to needs of the employer, show initiative. Over time, advance to another assignment with that employer or another. Climb the ladder. People have done this since the beginning of time. When employers configure entry-level jobs with a full array of pay and benefits, some will be willing to make a career of an entry level position. That's sad.
Kevin Foley
August 15, 2013
The original model for McDonald's was fulltime management, part time high school and college kids making minimum. It worked well for awhile, too, until unemployed adults started showing up willing to work for minimum wage fulltime.

Perhaps MickeyDs should look at paying adults something closer to a living wage and kids the minimum...a happy medium. They showed a billion in profits, so the money's there.
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