From the Left: Living wage, not minimum wage, is the answer

By Dan Fournier
On January 31, 2014

There are numerous proposals on how to increase the minimum wage. As President Obama declared in his State of the Union speech to Congress earlier this week, he would increase it to just over $10.10 an hour for federal contracting employees. This isn't the only one, however; Senate Democrats have introduced bills to bring it to $10.10 nationally and possibly index it to inflation - meaning that, as the cost of living rises over time, the minimum wage would rise proportionally to make up for the increased cost.

Seattle City recently saw Kshama Sawant - a member of the Socialist Alternative, one of the many fragmented socialist parties in the country - win an election with her campaign based on a $15 an hour minimum wage.

Does a jump from $7.50 to $15 sound like a lot? Yet it's not even as much as workers technically should be making. If wages had always increased at the rate of inflation, and taken aggregate national economic growth and productivity into account as the value of the dollar rises, the minimum wage would be hovering between $21-22 per hour. What does this mean? It means that although the total value of your labor is equivalent to that, the difference is being re-distributed upwards to the ruling class through a backwards tax and wage system that does not give the everyday worker the full value and product of his work.

There is a systemic parasitism running through capitalism, but the consequences are even worse when one takes into account the impact that such exploitative business entities have on local communities when they serve as mass employers. There are numerous studies that have come out over the past several years - from economists on the left and right - showing that for every 100 employees Walmart hires, it costs the city just over $2 million in taxpayer funds to provide public services for the employees because they do not have a high enough income to obtain them in the private market. These things include food stamps, subsidized and public housing, low-income health insurance via Medicaid, and municipal services. 

If the minimum wage was increased to Sawant's proposed $15 solution, that would give working-class families the economic buying-power to lift themselves out of poverty and would reduce strain on the public safety net. This reduced strain would allow for taxpayer funds to be reallocated into programs that would directly benefit the infrastructure and economic interests of the local economy. Yet, because this is $15 an hour, it would still not be the total net worth of one's labor; the difference between the $21-22 "real" wage and the $15 "minimum" wage would still flow to the upper class in the form of direct profit.

In the end, a $15 wage would still be a means through which there is systemic exploitation of workers and would still be the means through which the ruling class could accumulate extraordinary amounts of wealth over time.

To those who say that an increase in the minimum wage would cause a reactionary spike in inflation, I would direct them to the reports put out by both public agencies (Treasury Department, Congressional Budget Office, etc.) and private entities (the majority of the D.C.-based, conservative think-tanks) that say that at most, prices would rise up to an approximate six cents in certain sectors of the economy, and that other sectors would potentially be untouched.

Of course, raising the minimum wage to $15 and indexing it to inflation is not the end goal; the end goal is the construction of an economic system wherein those who contribute as much as they can are able to survive. Those who work a full work-week should be able to earn a living wage - a wage conducive for them to pay their rent, put healthy food on the table for their children, cover their energy and transportation bills, and allow for enough recreational time and discretionary buying-power. Having working-class families have the economic power to move markets is good, because it introduces a level of democratic decision-making into an unfortunately centralized, corporate-based economy. Currently, the market controls and direct people; instead, the people should control and direct the market.

Open your eyes and look at the reality of the situation: We live in an economy wherein decision-making power and wealth accumulation only happens to those at the top. A prime example of this is the university in which we now sit. Despite its rich traditions and the fact that our departments are filled with brilliant educators and doctorates, there are those executive managers that sit atop our university's ivory towers that spend our hard-earned tuition money on things that are not directly related to our educational experience. The new UNH logo is a prime example because it shows how completely out-of-touch the university executive is with the material wants and needs of the student body, the body that cares more about how much it makes in work-study paychecks (which many students are financially dependent on) and dining hall choices than on wasteful, cosmetic nonsense. If the university executives truly wanted to spend $100,000 effectively, it should have asked the students what it they could do to improve our education here.

We need an immediate increase in the minimum wage to $10.10 across the nation, followed by a gradual increase to $15 over several years that is then indexed to inflation. This is an economically sound and politically realistic way to improve the living standards of the working class, when done in conjunction with other progressive reforms: universal single-payer healthcare, mass infrastructure repair and green energy investment, full education funding, and an end to all wars and the budget-busting police-state. Do not be afraid to be principled and demand the liberation of the working class. Always be dedicated to liberty, not sensationalized "compromise" that acts as a veil for perpetuating corporate rule.


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