“And when he had agreed with the laborers for a penny a day, he sent them into his vineyard.”
-Matthew 20:2
"The laborer is worthy of his hire."
-Timothy 5:18
“Penny wise is often pound foolish.”
- French proverb
A friend who writes a prominent conservative blog wrote a post today, bemoaning how the minimum wage and the economy had made it difficult for teenagers to get jobs.
He has a teenage daughter and son. It is true that minimum wage laws have made it more difficult for teenagers, and in particular the pattern has been that minimum wage laws typically disadvantage even more minority teenagers than white teens. While it has been the case that under lower minimum wage laws more blacks were employed than whites at the lowest possible pay, I'm not sure that this is a fact for which the significance is being properly interpreted by conservatives.
I appreciate that my friend is probably not happy, on a superficial level, with his kids hands effectively taking more money from his pockets when they cannot earn their own. But I also know my friend to be a committed, loving and conscientious father who would never genuinely wish to see his children unhappy or deprived of things that were important to them. This is not in any way an indictment of my friend for being stingy; far from it.
My friend bemoaned that employers were tending to hire older workers instead of teenagers; they needed less training to do the jobs. Older workers would not, under more usual economic circumstances, be competing with teenagers. Their experience and skills would ordinarily qualify them to hold better jobs.
But it is also true that when you undercut the wages paid to the labor force, depressing wages in the market place you lower rather than raise all boats. My friend is a fanatic 'free market' laissez-faire' capitalist. While I see my friend being willing to see the wages of the lower strata of workers cut, and cut and cut, in the name of competition, I don't believe he fully understands the implications of it.
At the same time, my friend is never, ever, willing to see the upper echelons of compensation diminished. He sees no possible situation where management, especially upper management, top executives, should receive so much as a dime less in compensation including bonuses. His reasoning is that these bloated, over-paid upper level people must be doing something to deserve their pay, even in the face of clear evidence to the contrary. It is not in his capacity to even consider that someone at the upper end of the scale could be overpaid, any more than he really ever considers someone could be underpaid under free market capitalism. Both, however much my friend would avoid facing it, are true. And as they are the people in power, overpayment of the upper end is likely to be entrenched, while the lower levels of labor are relatively powerless. The market forces affect the upper levels disproportionately less than lower level compensation; and this represents a weakness, a flaw in market forces operating effectively and efficiently.
I had part time jobs as a teenager. I worked at babysitting and other jobs I could do before I was legally able to hold a formal job. On my fifteenth birthday, I applied for the part time job I wanted, and had been preparing in advance for some time to get, and got it. That job was tremendously important to me. It paid for my entertainment, it paid for those items of clothing beyond the clothing allowance my parents dedicated to my wardrobe every year. It meant that when I gave a birthday or Christmas or other present, it was something I had worked for, saved for, and bought myself; that made it more from me than if someone had just handed me the money. It made presents, even 'just' cards far more meaningful, both to give and to receive. It made putting money in the collection plate at church on Sunday an exercise in character, weighing selfish desires against faith and a sense of duty and obligation - every Sunday. We received our own offertory envelopes from the time we were confirmed as young teenagers; in my family we were expected to put our own money in it. Having a part-time job was all about learning reliability, punctuality, good work habits, value, budgeting and saving, taking direction and criticism, cooperation with others. It was about so much more than was encompassed by a minimum wage.
But in an economy like the present one, I believe whole-heartedly, that those adults who are being employed instead of teenagers are in greater need of these low-paying jobs more than teens, for their basic survival, not discretionary income. As sympathetic as I am to the problems for teenage workers, I am more sympathetic to the plight of the older worker. The answer to the problem of too many people seeking too few jobs is not to pay less so that more people are paid even less, just so that teenagers can find a bad paying job. In this economy, I am not sure that the conventional wisdom that suggests this works would apply. More than that, what we need is not more people who are underpaid, who are in poverty. The finite amount of money to go around in wages will not change, only the distribution. That distribution is not better with a lower minimum wage, it is worse.
My conservative friend seems against any 'redistribution of wealth' except that which distributes money upwards to a tiny percentage of those who are already wealthy, and away from those people who are below that strata. Redistribution of wealth is a code word signifying all manner of horrors to conservatives.
I noted in one of my recent 'in history' posts the first minimum wage law in the United States; it called for a minimum wage of 40 cents an hour back in the early thirties. In current dollars, that actually equates pretty well to the current minimum wage. Our economy didn't end then, it won't end now; it went on to thrive, and will do so again - has begun to do so.
We are a consumer-based economy. Both jobs and pay going to workers who will spend them, not invest them outside the country, or do something else other than consume with it, is what will bring growth - and more jobs again - back to this country. Less than minimum wages for workers will not do that.
And I will hope, fingers crossed, a prayer in my heart, that my friends two teenagers WILL find jobs, and the kind of hours they need; for him AND for them. At the same time, I will be hoping and praying just as hard that it means an experienced worker moved on to a better paying job better suited to their experience.
Something that I've thought about for a long time is the problem that US employers tend to prefer their profits and the return to their stockholders over all else. In a pure capitalism system, that's well and good, but unfortunately, as we've seen, a pure capitalism system ultimately breaks when the middle class disappears and there is no one left to buy the goods produced by the rich.
ReplyDeleteOne thing that I think the US can and should do, but I've never seen seriously proposed, is to require US companies who have plants overseas, and who move production overseas to take advantage of lesser wages and more lax labor laws, etc, be taxed the difference between what they are paying the workers offshore and the prevailing average wage of a worker doing the same job in the US. This could be a graduated tax, or a tax of 100% of the difference, depending on the size of the company, etc. Unfortunately, I don't see any real interest in this, as both Democrats and Republicans are in bed with corporate America to the extent that the people in the US really have no say in their government these days.
Abundant labor is the cause of our current economic woes as we compete to hold value against NAFTA based factories in Matamoras and against state-driven, price-fixed products from Canton.
ReplyDeleteThe idea that the fix for the economy is to lower wages is the kind of idea which identifies just how poorly someone understands economics. The split between labor and ownership of profits has roughly been cut in half in the past decade. That massive reduction, in the face of ever increasing productivity, is the best bell-weather of who profits (abundantly) in our 'greatest economy on earth' and who has by contrast, lost ground massively. That lost ground occured in a market of 'free labor', of unbridled capitalism, and now those capitalists seek to destroy the minimum wage. The question is why?
The answer is simple - they understand that we have a vast underemployed set of professional workers created over the past 20 years or so. Workers who can solve problems, who think well, and who are generally more qualifed and much more easily accessed than foriegn workers or the young (who are easily accessed but unskilled). Rather than pay for the more skilled, an entirely market driven reality (paying up for skill which should have the right to demand more in pay), they want to shred the underpinnings of the wage scale so that they can access that labor more cheaply. They COULD pay someone in Canton, but it is hard to outsource many types of skilled jobs - so instead of being willing to share the profits to hire the skill, they seek to destroy the justification for paying up. This self-killing attitude is of no mind to them as they (once again) seek only the IMMEDIATE return, the immediate prfit.
What your friend should recognize is that his kids would HAVE jobs if those above their skill set had them in better paying jobs using their skills more fully, rather than those older workers being forced to, by this horrid jobs economy, take jobs supervising McDonalds. The truth is, if they lower wages, his kids won't have jobs, his neighbors will simply make YET less filling the same crappy, unskilled jobs they've been forced to take because their programming, or USER EXPERIENCE AND DESIGN job was given to someone in Tijuana or Shanghai. His kids, should they even find a job, won't make enough to pay for the gas to get to work - but, given the recent Tea Party stance on the motivations of the unemployed, not making enough to pay for even trying to get to work isn't a reflection of succuming to a vast, underemployed reality, it's the hallmark of the lame and lazy. Perhaps your friend's children simply aren't trying hard enough to find a job because your friend keeps feeding them?
"One thing that I think the US can and should do, but I've never seen seriously proposed, is to require US companies who have plants overseas, and who move production overseas to take advantage of lesser wages and more lax labor laws, etc, be taxed the difference between what they are paying the workers offshore and the prevailing average wage of a worker doing the same job in the US. This could be a graduated tax, or a tax of 100% of the difference, depending on the size of the company"
ReplyDeleteI think this is an excellent idea. Does this however constitute in a sense a tarriff, a tarriff on services rather than on goods?