We All Pay for Lousy Pay

We live in the wealthiest nation the world has ever known. Our Gross Domestic Product, which is a measure of everything sold during the year, is over $14-trillion dollars, an unbelievable sum. Our median income is about $50,000.

But all is not well, as you already know.

To begin with, virtually all the gain in wealth since 1975 has gone to the top 20% income group. All the rest of us have experienced constant or, more likely, slowly eroding earnings, even though individual productivity rose 175% or so during the same period.

Conservatives have been saying since the dawn of time that it’s desirable that the wealthy be very wealthy, because they are the “means of production”. They take that to mean that without them, there would not be adequate investment in production, and we would all suffer.

There are several things wrong with that conceit. First, there are three other elements of production: labor, materials, and purchasing power. If any one of these four is missing, not all will be well, which we can see right now because our purchasing power is low. Second, the country’s best economic times occurred in the decades following WWII, when income distribution was much more equal. Third, even though virtually all of the wealth gains of the past thirty years or more have gone to the most wealthy, it has not led to good economic times. In short, great wealth has done nothing to improve the country, and a great deal to make us less well off.

Consider a person who is a nice enough guy, who graduated from high school, and who is known as a good, dependable worker. He’s twenty, and has a wife and child. He will not be working in a job that demands a lot of education. Let’s put him in a restaurant job in San Francisco, where he buses tables and washes dishes, and is good at what he does.

For the sake of discussion, let’s pay him $10 per hour. In a year his income will be under $21,000. But if he lived in Daly City, which is a less expensive town south of San Francisco, where I live, rent for a modest two-bedroom apartment would be about $1,800, or $21,600 per year. That’s more than his total gross income. Obviously, there will need to be two or more jobs in the household. But notice that he is a good worker and is doing worthwhile, useful work. He’s not lazy, and he’s on the good side of the law. And we need him!

Let’s look at someplace a bit less rarefied than the San Francisco area. Let’s say someplace in the Midwest, where a reasonable 2BR apartment could be had for $700, which is low-average for many such places. If we assume that this $700 represents 25% of income, which was the rule of thumb not long ago, monthly income would be $2,800 net. That comes to about $36,000 per year gross, or about $17 an hour.

Is it possible to find a job paying $17 an hour in the Midwest today if you don’t have a college degree? Maybe not. Maybe your income will be lower, in which case, an additional job will be needed.

Remember, this is pretty modest living. There will be no $40,000 car purchases, no cruises in the Med.

If you are in the “modest living” class, Republicans are sure you are a slacker. You’re too lazy to work, especially if you are a person of color. Here’s a recent example of that attitude, which is very common. From Huffington Post, 28 April 2011: “Rep. Sally Kern, R-Oklahoma City, said minorities earn less than white people because they don’t work as hard and have less initiative.”

It is an act of faith among conservative Republicans that regardless of all else, the government should have no part in your welfare. That’s what you get for your laziness. You are responsible, you alone. So if you can’t afford to go to the doctor, it’s your fault. The fact that you are working forty hours at the best job you can get and still can’t afford it is irrelevant. Nor is it relevant that you find it difficult, if not impossible, to put aside any significant amount of money for your old age. You are responsible, you alone.

I believe that we could indeed have a government shaped differently, as conservatives want, if certain conditions were met, and if that’s what we actually want. We could do away completely with Social Security. A mandatory government individual savings plan would end poverty forever. A good national health plan would cover everyone at half of what we pay now. But…

None of this is possible if we are so thoroughly capitalist that we pay attention only to the welfare of the top income class, which is what conservatives seem to want us to do. But the real reason for the enormous income disparity we have now lies in the very nature of capitalism, which dictates that business owners will pay workers the least wage they can get away with, which is always lower when unemployment is high, as now. We can see the truth of this because many new jobs are for lower wages with fewer bennies.

What can a worker do to protect himself from the capitalist rule of the lowest pay possible? As I see it, he has two defenses: unions, and worker-owned businesses. If there are any others, I haven’t heard of them.

But conservatives are unanimous in denouncing unions. They say they ruin business, destroy profit. But do they? The most affluent decades we ever had were those following WWII, in which workers earned well, and so did the bosses. Unions represented the majority of workers. The power of capitalism since the 1970s has reduced unions to representing fewer than ten percent of workers. Capitalism has created slowly stagnating living for all but the wealthy. The poor are as poor as ever.

The wealthy are more wealthy than ever. The top 1% own a fifth of the country’s wealth. The top 300 executives averaged $11.4M in 2010, up 23% from the year before. Wall Street decreed that the recession was over when they rewarded themselves all this money, but the recession wasn’t, and isn’t, especially for our 40-hour guy, and he’s wondering how he’ll get to work when his old used car dies.

What would make the whole country better off, with higher tax revenues for government, lower health care expenses, adequate money for old age, and better conditions for industry? The enactment of Living Wage laws, which would require that all full time work pay enough to keep workers out of poverty. Mandatory individual savings to replace Social Security. A good national health care plan like almost any of the very successful ones in Europe.

Don’t hold your breath.


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