A new day is arriving in America. After decades of being pushed around, America’s workers are standing up.After the Nov. 5 ballot initiatives in New Jersey (and anticipated soon in the Seattle suburb of SeaTac), voters sounded loud and clear: “We are fed up and we won’t take it anymore.”
In New Jersey, voters raised the state’s minimum wage by $1 effective Jan. 1. After an earlier victory in the California Legislature to raise the state minimum wage to $10 an hour, this is the second major state to push back against the stagnant wage growth hurting families.
In SeaTac, the home to Seattle’s airport, voters on Tuesday voted by a wide margin to set a $15 minimum wage for hospitality and transportation workers, along with paid sick days and protection for tipped employees. The mail-in votes in SeaTac were still being counted. Big Business spent big to defeat the will of the voters on these issues. Clearly they fear the 99 percent may finally stand up.
This is a movement that will continue to sweep the nation, like the workers at Wal-Mart and McDonald’s who also fight for $15 an hour. And those who stand in its way are going to be on the wrong side of history. In part, this is old Yankee commonsense that brought about the minimum wage 75 years ago in the depths of the Great Depression.
Stuck in an economic rut, clearly it was time to change decades of policies that let technological advances create millionaires but impoverish the workers who made the new products. New kinds of workers such as electricians, movie projection operators, telephone operators, recording engineers and automobile mechanics were created from 1895 to 1929. And while a tiny few bosses got rich, workers saw little benefit from these new skills and the system collapsed of its own weight after financial speculators crashed Wall Street, betting on the new economy.
This time, the Washington elite saved Wall Street but turned their backs on reconstructing a new economic order to restore the middle class, instead, leaving working America the same fairy tale promise it has been hearing since the 1980s – that the computer era would generate a new middle class.
Subsidizing the Rich
In 1935, tired of waiting for some invisible hand to lift up wages to match the rising productivity of workers, the Wagner Act passed to empower workers to organize and, in 1938, the Fair Labor Standards Act was put in place to protect wages.
In 2013, while the Washington elite continue to debate downsizing the American Dream, people outside Washington are taking things in their own hands to right the ship and make the government work for them. This is the new tide that is turning.
When 10 Republican members of Congress who get farm subsidy checks, like Rep. Robert Aderholt of Alabama, voted to cut funds to the Supplemental Nutritional Assistance Program (SNAP) to help feed America’s children, people took note. His vote to keep his family’s share of a $66,891 subsidy shows that the tea party is more for the continuation of policies for the rich than solving the problems of America’s families.
Last month, a study out of the Labor Center at the University of California, Berkeley, showed that fast-food workers are forced by their low wages to rely on more than $7 billion in public assistance to feed their families and for access to health care. This massive subsidy to multinational corporations earning billions in profits is inefficient.
Out of Sync
McDonald’s, the world’s second largest employer, had gross profits of more than $2.7 billion last year. Clearly the subsidy McDonald’s gets from tax payers to help support the low wages of its workers isn’t to save the company from bankruptcy. And, given America’s trouble with obesity, it isn’t because people need help to keep McDonald’s prices low enough so we eat our way to heart attacks.
Now we see from Republicans in Congress their answer is to cut the subsidy by letting the workers starve. The voters in New Jersey and SeaTac know the correct answer is to tell American companies that America’s workers will not starve to make them profitable; the answer is to pay the workers.
America’s wages are out of sync with productivity and the minimum wage is additionally out of sync with prices. If the minimum wage of the 1960s was adjusted for prices, and to let those at the bottom get just half the productivity growth, then today the minimum wage would be around $15 an hour.
Some are looking at that wage with incredulity, testament to how we have gotten used to rotten wages. But, as the millions of workers who lost jobs in manufacturing and construction during the Great Recession know, it matters how low you can fall.
We remain nearly 1.9 million below the 2007 peak employment in construction and 1.7 million fewer in manufacturing after the labor market peaked in 2008. But employment at general merchandise retailers and food service establishments is up almost a combined 900,000 since their 2008 peaks.
And, if you are among those who think that $15 an hour sounds too high because you don’t make $15 an hour, imagine what you would say to your boss if jobs at McDonald’s and Wal-Mart paid $15 an hour if he didn’t give you a raise. You will be joining the wave of history soon.
*William E. Spriggs is chief economist with the AFL-CIO and is a professor in, and former chairman of, the Department of Economics at Howard University. He is also former assistant secretary in the Office of Policy at the U.S. Department of Labor. You may follow him on Twitter: @WSpriggs