OPINION – You’ve got to spend money to make money.
It’s a lesson most successful business owners have learned. Now, it’s time to pass it on to Congress, which is wrestling with a proposal from the White House to raise the hourly minimum wage from a miserly $7.25 to $10.10. It’s an idea that has traction from the public, with 71 percent, according to recent polls, embracing the idea.
Since the president initiated the push for a higher minimum wage by signing an executive order that gave those working for companies with government contracts a minimum hourly wage of $10.10, several states, which can set their own minimum wage level independent of the feds, have followed suit.
California, Connecticut, Delaware, New Jersey, New York, Rhode Island, West Virginia, and the District of Columbia have already given their workers a raise. Alaska, Arkansas, Idaho, Massachusetts, Michigan, Missouri, New Mexico, and South Dakota will have measures on the ballot this fall to, hopefully, follow suit.
Here in Utah the wage remains at the federal minimum of $7.25. Don’t expect changes any time soon from state lawmakers who are loathe to take direction from the White House, especially with Barack Obama sitting in the Oval Office.
It would also run counter to Utah economic growth principles of trying to draw light manufacturing companies using the lure of cheap land, cheap power rates, and cheap labor. High tech jobs? There simply aren’t enough skilled workers to go around. When it comes to Southern Utah, there is a preponderance of service industry jobs, which cater to a transient population of snowbirds and tourists, but don’t pay particularly well.
What more progressive nations have learned is that hiking the minimum wage spurs the economy. It just makes sense: if workers earn more, they spend more, if they spend more, it grows the economy.
In the United States, the argument against hiking the minimum wage is that it would harm the Mom and Pop businesses, but the reality is that the strongest opposition comes from the mega-companies who worry that it might reduce the profits for investors and stockholders. We can’t, by any means, put the fat cats on a diet.
There will also be those who will cite the recent vote in Switzerland to deny a minimum wage level. But, if you go deeper than the headline, you will see that the Swiss have a median hourly wage of $37 an hour.
What does this mean in all practicality?
It means that, according to a UNICEF report, the United States ranks second-highest in the percentage of children living in poverty among the 35 most economically developed countries in the world. Romania tops the list at 25.6 percent, followed by the U.S., which registered with 23.1 percent.
There is no excuse for this other than greed.
How, in good conscience, can an employer expect an employee to live on $7.25 an hour? And, as far as Obama’s target of $10.10, that is still below the $10.87 our minimum wage would have risen to had Congress kept up with inflation and cost of living increases over the years.
Our members of Congress will explain how they feel our pain so much so that they recently denied themselves an automatic $2,800 pay hike for the sixth consecutive year.
Of course, a rank-and-file member of Congress earns an annual salary of $174,000, which is more than four times the average income in the United States. There is also a huge disparity there as well when you understand that more people are closer to the fringes of the income spectrum than in the rapidly disappearing middle class that once was the backbone of this nation. In other words, the rich keep getting richer and the poor keep getting poorer.
It was once a valid life lesson that hard work was, perhaps, the most important key to financial success and stability. Today, however, the rules have changed as employees with many years of good, honest service are kicked to the curb because the corporate execs, whose pay is outrageously out of sync with what employee wages are set at, realize that cutting long-term employees at the upper end of the salary scale improves the bottom line. It may impact the goods and services offered, but it keeps the money flowing to investors.
So, they do things like offering early-out deals to those who have served a company for a long time; they furlough workers; they freeze salaries; and if you complain, well you are told that if you don’t like it, there are plenty others who would gladly take your job. So much for hard work, loyalty, and dedication, right?
We’ve really had only two presidents this century who understood economics enough to employ successful policies – Franklin Delano Roosevelt, who ushered us out of The Great Depression, and Bill Clinton, whose economic brilliance set us back up on our feet after about 50 years of fiscal irresponsibility. The others either exacerbated the problem with silly notions of righting the ship with a “trickle-down” economic policy or were hammered by politicians for offering a progressive fix, like hiking the minimum wage.
What will occur, of course, is that at some point, people will be fed up enough to start an effort to unionize more jobs to help end the disparity. While it will not play well with the anti-union conservatives, it may be the only way to secure adequate and respectable wage levels for all because, more and more, the working men and women are realizing the truth in what social activist and folksinger Woody Guthrie said many years ago.
“Wall Street,” he said, “keeps you off Easy Street.”
No bad days!
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Ed Kociela is an opinion columnist. The opinions stated in this article are his and not representative of St. George News.
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