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August 2, 2013

Pennies at the Register, Dollars in the Paycheck

By David Sirota

What is more devastating: wages that relegate millions of people to a life of poverty or having to fork over just a bit more pocket change during your next trip to McDonalds and Wal-Mart? As Congress contemplates raising the minimum wage and more workers take collective action in the fight for better pay, the answer should be more obvious than ever.

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Source: TruthDig


Photo by  Walmart(CC-BY)

You know the boilerplate argument against higher wages in America, because you've heard it so many times from Fox News and CNBC pundits. But as service industry workers now mount protests against poverty-level pay and as the Associated Press reports that "four out of 5 U.S. adults struggle with joblessness, near-poverty or reliance on welfare," it is worth reviewing the blowhard's case for low wages one more time -- just to see whether it even makes sense.

The three-tiered argument goes like this: 1) Higher wages for workers create higher costs for corporations; 2) corporations pass on those higher costs in the form of product price increases; and 3) those price increases must be enormous for corporations to recoup all of their increased labor costs.

What gives these assertions such mass appeal is their populist insinuation that higher wages would hurt the Average Joe. Ultimately, that Average Joe is supposed to conclude that the supposed harm modest wage increases will inflict on him will be far greater than the benefit they will generate for him and the economy as a whole.

For the sake of evaluating this particular conclusion, let's set aside all of the other moral and economic questions at play in the larger debate over wages. Let's, for instance, bypass a discussion about why the richest nation on earth has a $7.25-an-hour federal minimum wage that condemns many workers to destitution. Let's also for a moment disregard the fact that CEOs of the biggest restaurant companies make more in a morning than the average minimum-wage worker in their companies make in a year. Let's even ignore evidence that raising the minimum wage boosts the economy by putting money in the hands of those who will most quickly spend it.

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Authors Bio:

David Sirota is a full-time political journalist, best-selling author and nationally syndicated newspaper columnist living in Denver, Colorado. He blogs for Working Assets and the Denver Post's PoliticsWest website. He is a Senior Editor at In These Times magazine, which in 2006 received the Utne Independent Press Award for political coverage. His 2006 book, Hostile Takeover, was a New York Times bestseller, and is now out in paperback. He has been a guest on, among others, CNN, MSNBC, CNBC and NPR. His writing, which draws on his extensive experience as a progressive political strategist, has appeared in, among others, the New York Times, the Los Angeles Times, the San Francisco Chronicle, the Baltimore Sun, the Nation magazine, the Washington Monthly and the American Prospect. Sirota was a twice-a-week guest on the Al Franken Show. He currently serves in a volunteer capacity as the co-chairperson of the Progressive States Network - a 501c3 nonpartisan organization.

In the years before becoming a full-time writer, Sirota worked as the press secretary for Vermont Independent Congressman Bernard Sanders, the chief spokesman for Democrats on the U.S. House Appropriations Committee, the Director of Strategic Communications for the Center for American Progress, a campaign consultant for Montana Gov. Brian Schweitzer and a media strategist for Connecticut Senate candidate Ned Lamont. He also previously contributed writing to the website of the California Democratic Party. For more on Sirota, see these profiles of him in Newsweek or the Rocky Mountain News. Feel free to email him at lists [at] davidsirota.com Note: this online publication represents Sirota's personal views, and not the official views of the organizations he works with.



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