By John Lawrence
A report by Demos revealed that, in 2012, the compensation of fast food CEOs was more than 1,200 times the earnings of the average fast food worker. Proxy disclosures recently released by fast food companies reveal that the ratio remained above 1,000-to-1 in 2013. Raising the minimum wage would do more to reduce inequality in the US than just about any other measure that could be taken.
But Republicans in the Senate voted down a Federal increase in the minimum wage. What else did we expect? As long as they have the veto, nothing will pass the Senate that benefits the middle class or the poor.
Thomas Piketty’s book Capitalism in the 21st Century is the top seller on Amazon.com. He is drawing attention to the fact that the very rich have incomes hundreds of times greater than average workers.
Piketty wrote the following in his book concerning the minimum wage:
“In the United States, a federal minimum wage was introduced in 1933, nearly twenty years earlier than in France. As in France, changes in the minimum wage played an important role in the evolution of wage inequalities in the United States. It is striking to learn that in terms of purchasing power, the minimum wage reached its maximum level nearly half a century ago, in 1969, at $1.60 an hour (or $10.10 in 2013 dollars, taking account of inflation between 1968 and 2013), at a time when the unemployment rate was below 4 percent. From 1980 to 1990, under the presidents Ronald Reagan and George H. W. Bush, the federal minimum wage remained stuck at $3.35, which led to a significant decrease in purchasing power when infaltion is factored in. It then rose to $5.25 under Bill Clinton in the 1990s and was frozen at that level under George W. Bush before being increased several times by Barack Obama after 2008. At the beginning of 2013 it stood at $7.25 an hour, or barely 6 euros, which is a third below the French minimum wage, the opposite of the situation that obtained in the early 1980s.
“Inequalities at the bottom of the US wage distribution have closely followed the evolution of the minimum wage: the gap between the bottom 10 percent of the wage distribution and the overall average wage widened significantly in the 1980s, then narrowed in the 1990s, and finally increased again in the 2000s. Nevertheless, the inequalities at the top of the distribution – for example, the share of total wages going to the top 10 percent – increased steadily throughout this period. Clearly, the minimum wage has an impact at the bottom of the distribution but much less influence at the top, where other forces are at work.
“Various studies carried out in the United States between 1980 and 2000 … showed that the US minimum wage had fallen to a level so low in that period that it could be raised without loss of employment, indeed at times with an increase of employment …On the basis of these studies, it seems likely that the increase in the minimum wage of nearly 25 percent (from $7.25 to $9 an hour) currently envisaged by the Obama administration will have little or no effect on the number of jobs.”
President Obama will unilaterally increase the minimum wage for workers under new federal contracts to $10.10 an hour. He is now proposing a raise to $10.10 for all workers. Two of the nation’s largest private employers, Wal-Mart Stores and McDonald’s, have taken heat for paying many of their workers so little that they need government benefits and charity to get by.
In March, McDonald’s workers in California, Michigan and New York filed lawsuits against the company and several franchise owners, asserting that they illegally underpaid employees by erasing hours from their timecards, not paying overtime and ordering them to work off the clock. One of the tricks pulled by franchise owners was to order workers to show up for work and then told them to wait around (off the time clock) for enough customers to show up.
Piketty has amassed a huge ensemble of historical data to bolster his conclusions: over three centuries of data from 20 countries. His book shows that starting in 1980, under Republican Presidents Ronald Reagan and the two Bushes, income skyrocked for the upper 1% while remaining stagnant for the 99% and especially the lower 10% because the minimum wage did not even keep up with inflation.
People of conscience need to keep up the fight for the minimum wage right through the next election. While Republicans in the House vote time and again to repeal Obamacare which hasn’t a chance as long as Obama is President, the Democrats under Harry Reid in the Senate need to vote time and again to raise the minimum wage even though there’s not a prayer as long as the Republicans can veto it. However, it keeps the issue front and center before the American people. Maybe some day the logjam will break. Meanwhile cities and staes need to take the lead in raising the minimum wage.