Debate Forum: 09/09

Forum Center: Obama and striking workers raise an issue about wages

By Alex Culpepper

Photo: Robots… I’m lovin’ it [Illustration by Jed Helmers]

During the Labor Day weekend, President Obama was out speaking to crowds about Labor Day issues. Part of his speech was a rally for increased wages, especially the minimum wage. He also discussed his executive order securing a $10.10 an hour minimum wage for government contractors, which would take effect in 2015. The president and his supporters may be pushing the wage increase because they hope to make the minimum wage an issue in the 2014 midterm elections.

A few days after his Labor Day speech, fast food workers with union backing took to the streets in more than 100 cities across the country to strike for a federal minimum wage of $15 an hour. The aim of the strikes was to draw attention to low wages and inadequate benefits. By the end of the day, more than 400 protesters had been arrested. Since 2012, at least seven similar strikes have been organized, each growing larger and more successful, and President Obama took notice.

The federal government first established a minimum wage in 1938 under the Fair Labor Standards Act. The act banned oppressive child labor and set the minimum hourly wage at 25 cents, and the maximum workweek at 44 hours. Originally, the law applied only to workers who made products shipped in interstate business, but by the 1970s, most workers were covered by a minimum wage. As of 2009, the federal minimum wage is $7.25 an hour. The issue with minimum wage is not so much about people making too much for non-skilled labor. In fact, the general sentiment is people have no problem with businesses paying generous minimum wages. However, just because the federal government has historically been the one to establish a minimum wage does not necessarily mean the people should accept it as the government’s role.

Opponents of a federal minimum wage first claim it’s a problem because it’s simply another form of government meddling in economic issues. They say free markets have a way of settling these pay issues naturally. On a micro level, however, they also say the costs are always passed on to consumers, no matter who raises the minimum wage. Those costs are usually higher prices and a reduced workforce. They say it would be nice if businesses would just absorb the added costs, but they never will because the quest for profit usually trumps all else. Opponents further argue artificially raising wages does little to boost the economy or reduce poverty and merely redistributes wealth.

Supporters of government minimum wage say it’s essential to creating economic fairness by paying people a living wage. They say it’s a moral issue because people should not be working full-time or near full-time in order to meet the costs of living. Supporters further add such existing low wages simply burden taxpayers since there is more demand for social programs and supports like food stamps and housing assistance, and this economic model simply rewards companies for being greedy. They also argue a higher minimum wage does not reduce workforce; it strengthens it by reducing turnover, stimulating demand and increasing productivity.

Whether speeches and protests will get the minimum to $15 or even $10 an hour, no one knows for sure, but some workers in this country may not need to wait for the federal government to act. Seattle has already set a $15 minimum wage, and reports reveal New York, Chicago and Los Angeles are moving in the same direction. Thirteen states have also acted on wage increases. Support for the increase is definitely there, but so is opposition, especially from economists.

Reach DCP forum moderator Alex Culpepper at AlexCulpepper@DaytonCityPaper.com

Debate Forum Question of the Week:

Should the federal government have a role in determining minimum wage?

 

Debate Left: America, the indecent

By Marianne Stanley

 

This is the United States of America. This is the “greatest country on Earth;” the richest nation in history, the country that led the world in technology, manufacturing, education and medicine.

What happened?

The U.S. is now a disgrace, a weak reflection of its former self, as one-quarter of its own children go hungry and larger and larger segments of its population are homeless. Do parents of those millions of children just not care? Are people living on the streets because it’s preferable to a place of their own? Are all of the people in our country who are living in poverty, a staggering 46.2 million …MILLION… just lazy, uninterested in having even the basic necessities of life?

To those who want to avoid feeling culpable or feeling compassion, simple pronouncements that suggest it is the fault of the poor to be poor, are widely popular. Just as necessity is the mother of invention, complexity and crisis are the mothers of overly-simplistic answers. The truth is there are multiple causes for America’s grand slide into a third-world-nation lookalike. Take a tour of Detroit, a city on the edge of bankruptcy, to see our grand fall from our glory days. Heck, drive through Dayton-proper to see all the boarded up homes where happy families once lived until they were driven out by loss of jobs, exorbitant medical expenses, corrupt lending practices and conscienceless banks. The beautiful architecture came down despite public protests and community need. Gone are our once-plentiful public swimming pools. Decay is everywhere. Worse, utter hopelessness is everywhere.

What happened? Lots. International trade agreements happened; good middle class jobs were shipped away, leading to both a devastated middle class and abused workers in other countries; industry was deregulated; corporations grew into larger and often-corrupt corporations, which merged with other corporations until they swallowed up small businesses, sadly including the once-independent but now non-existent news media, corporations became “people”; corporations funded campaigns; politicians protected those who got them elected rather than the rest of us, and voila! – today’s mess of a country.

Enter government, the overarching entity to address and resolve national issues. Government not only has a right to set a minimum wage, but a duty to do it. The Constitution itself mandates government “promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity…” Surely paying a living wage to those whose work falls under that directive. If government doesn’t do it, who will? Will those gluttonous companies, like Wal-Mart Stores Inc., cut into their own fat piece of the pie to let any of their measly crumbs fall into the hands of their employees? Hardly.

While the corporate media and the talking heads keep up the staccato drumbeat of falsehoods and point their fingers at the exploited and the hurting, way too many of us swallow their swill and turn the hatred and judgment we hear from them against each other rather than on those seeking to divide us. We must wake up!

No one works for nothing. Why is it OK to pay anyone less than it takes to get by? How is their work less meaningful and necessary than the work of, say, a computer game designer? The wages of workers in the U.S. began to fall behind in the late 1970s and have gone totally flat since 2000, while inflation drove costs for life’s necessities ever upward and corporate profits soared by 13 percent every year. The minimum wage was first instituted in 1938 when FDR wanted to make sure American families had enough to eat in this “richest nation on Earth,” when incomes were too small to meet even their basic needs. Even then, in the Great Depression, money went further and family debt was practically non-existent. A car cost the average worker one-third of his or her yearly income; Harvard cost $420 per year rather than $54,000, the average house cost $3,900 – almost 100 times less than today’s average cost. Today, families are drowning in massive debt for all major purchases from cars to homes to education to medical bills. Who, then, if not the government, can address this national crisis for our people?

Between 1979 and 2005, while income tripled for the upper 1 percent and increased 80 percent for the top 20 percent, the bottom 20 percent saw only a 6 percent increase, while groceries soared by 40 percent. Tax loopholes, breaks, incentives and policies have really screwed us over, with the wealthy and corporations getting all the breaks and benefits and the top 10 percent owning 91 percent of stocks. The Federal Reserve, with its low interest rates, helps the rich continue to scoop up properties and investments while all the middle and lower classes scoop up is massive and soul-crushing debt. This is no accident. Are we going to wake up and stand shoulder to shoulder with our fallen brethren or just wait until it’s us before we scream bloody murder at the rank injustices in our society? Corporations used to pay 32 percent of all taxes collected; today it is less than 7 percent, leaving the bulk of the burden on those in the lower classes who are already stressed, sick and desperate. This is just plain wrong.

Until today’s legal bribery of our politicians by corporate interests becomes illegal, the situation will only get worse for all but the very wealthy. Read “The Big Squeeze” by Steven Greenhouse for a real eye-opener and then act!

Marianne Stanley is an attorney, college professor and former journalist who believes many of our nation’s ills could be cured if our children were taught critical thinking skills beginning at the elementary level and continuing through middle and high school. She can be reached at MarianneStanley@DaytonCityPaper.com.

 

Debate Right: Liberals’ good intentions continue to screw things up

By David Landon


My first real job was during the summer of 1970, when I worked at the Union City Coca-Cola Bottling Company. The company was owned locally by the Jefferies family, who were friends with my parents. It was the summer before my senior year of high school. My job was to come into work at 3 p.m. and unload the trucks of empty cases of bottles as they returned from their daily routes and then refill the trucks with fresh cases of cola products. There were eight trucks and the job usually required seven hours to complete the restocking each night. My wage was $1.60 per hour, the minimum wage at the time. That was the equivalent of approximately $6.47 in 2010 dollars. It was hard work that required a strong back and little else. Certainly, no training or special skill was needed. I worked all summer and happily cashed my $56 weekly paycheck, feeling like I was rolling in money.

In the summer after I graduated from high school, I returned to the same job and, to my surprise, was given a 50-cent hourly raise – to $2.10 per hour. Now we were talking serious cash, as I began depositing my weekly check into my savings account at the Union Bank and Trust Company. I attributed my good fortune to the fact I was a hard worker and completed the job with minimum breakage of bottles. In 1971, 90 percent of all sales were in returnable bottles. My work habits might have been part of the explanation, but more likely was the fact, in 1971, the unemployment number was relatively low, standing somewhere between 4 and 5 percent in Union City, Ind. We were fortunate to have several major manufacturers in our small farming community. Jobs were plentiful. As much as I would like to think my raise to over $2 an hour was merit-based, in reality it was probably driven by the free market. I was a dependable worker who they determined if they wanted to keep me in their employ, my wages had to be competitive with what I could have received elsewhere.

So, do we need a minimum wage set by the federal government? Without the federal government setting the minimum wage, would unfettered businesses continue to pay a competitive wage? I believe the answer is yes. To attract quality workers, companies would continue to pay the wage market forces establish. The majority of economists believe the minimum wage law costs the economy thousands of jobs. If the federal minimum wage is increased along the lines requested by the Obama Administration, to approximately $10 per hour, the result would be the loss of nearly 2 million jobs nationwide. In Ohio, the number is around 77,000 jobs lost. The most fundamental principle of economics is supply and demand.

In the case of labor, this means the supply of workers goes up as wage goes up, and the demand for workers by employers goes down as the wage goes up.

Take, for example, if a hamburger-flipping job at a fast food restaurant were advertised for hire. If the wage were $100 per hour, thousands of people would want the job. If the wage were $1 per hour, you probably wouldn’t find anyone to do it. Somewhere in between – obviously closer to the $1 per hour figure – supply meets demand and the market sets an hourly wage. Conversely, if the government forced the employer to pay at least $10 per hour, the employer might decide not to hire a new hamburger flipper at all. Instead, the business might opt to have other staff to pick up the duties. Thus, a job would be lost because of an increased minimum wage. If there were no federal minimum wage, it would not mean companies could pay their workers whatever they want. No one would work a lawn-mowing job that paid 25 cents per hour. However, if a lawn mowing company offered $5 per hour for an entry-level job, they might be able to hire a high school student for the summer.

The largest percentage of minimum wage jobs are taken by teenagers, workers in training, college students, interns and part-time workers of the groups named above. You cannot make a living and support a family on a minimum wage job. Elevating the minimum wage to a “living wage” is economically unsustainable. These jobs are typically positions requiring little or no training that can be filled by almost anyone. Many students, part-timers and other young workers are willing to take much less than minimum wage. It teaches young workers how to handle money and deal with other people.

In recent days across the nation, labor organizers have attempted to raise the profile of “Fight for 15” – a strategy designed to bring about an increase in the minimum wage of fast-food workers to $15 an hour. An entry-level position earning $15 per hour will increase costs dramatically and could even force some businesses to close. The greatest costs of running a business are payroll and healthcare, and now President Barack Obama wants to make sure, with Obamacare and increasing the minimum wage, both are increasing the cost of doing business.

 

David H. Landon is the former Chairman of the Montgomery County Republican Party Central Committee. He can be reached at
DaveLandon@DaytonCityPaper.com.

 

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