The federal minimum wage has maintained at $7.25 since its most recent bump in 2009 — a full decade ago. During that time the cost of housing has gone up by over 20%, and the cost of private health insurance has increased to an absurd degree. (Thanks, Obama.) At a time when CEO compensation is at an all-time high, and when the wealth gap is wider than before The Great Depression, 80% of workers are living paycheck-to-paycheck without any apparent end in sight.
All right, so that’s a lot of links for only the first paragraph. From here on I will do my best to spare you. The point to the story is that minimum- and low-wage workers are getting a bad deal in the United States. $7.25 an hour comes out to roughly $15,000 a year before taxes, which in 2019 is nothing short of a poverty wage. People can’t afford much of anything — let alone a house or decent health insurance — by earning so little.
Part of the reason why workers are getting screwed so heavily is that neither of America’s major political parties looks out for them. The Republican Party goes out of its way to give tax breaks to the ultra-wealthy, to make it harder for workers to join unions, and to privatize every major industry. Meanwhile, since the days of Bill Clinton, the Democratic Party has followed suit in shunning organized labor at the behest of the donor class. Despite what mainstream media tries to tell you, there isn’t a “left” party in the United States, and hasn’t been for at least 40 years.
Nonetheless those same mainstream media members continue pushing the idea that the economy is doing great, that it’s booming, but unsurprisingly none of that greatness or boom has trickled down into the pockets of ordinary people. Last September CNBC posted an article saying “nearly 6 out of 10 workers are still recovering after The Great Recession,” which, again, covers a decade-long stretch. In the meantime the Koch brothers, some of the wealthiest individuals in the world, have seen their net worths more than double.
I’ve heard my conservative friends and family members go through the mental gymnastics of trying to defend this broken system, the one where three families own more money than the bottom 50% of workers, and it would be kind of hilarious if it wasn’t so sad. Only in America can propaganda outlets convince workers making $30,000 or $50,000 or $100,000 per year that the real problem is poor people sucking the government tit, rather than the consolidation of wealth at the very top, and their active participation in ensuring not having to pay a fair share of taxes.
And that brings us back to the $7.25 minimum wage. For the American economy to function properly — which it currently isn’t — people at the bottom of the economic pyramid need to be spending money. Since the 1980’s, when Ronald Reagan substantially and irrevocably cut the corporate tax rate, the money from the working class and middle class has slowly been funneled upwards to society’s richest families. And that’s great if you have five or ten million, or five or ten billion, dollars in the bank. It hasn’t worked out so well for the disappearing middle class, nor has it worked for the nearly half of American workers earning $35,000 per year or less.
Raising the minimum wage would be simplest way to stimulate the economy. In solidarity with Fight For 15 activists, in 2016 Independent Vermont Senator and Democratic Presidential candidate, Bernie Sanders, proposed that the federal minimum wage be raised to $15 an hour. There is data, however, suggesting if worker productivity kept up with inflation, that the minimum wage ought to be closer to $20 an hour.
For purposes of this article we will roll with the $15/hour number, and mostly because it’s more realistic in the relatively near term. Think of how much extra shit ordinary people would be able to afford when earning $600 a week, $2,400 a month, and $31,000 per year (again before taxes), as opposed to what we have currently. That’s extra money to spend taking the family out to dinner, more money for families to spend on new clothes for their kids, and more money to spend on entertainment and leisure activities.
This is how you jumpstart an economy, by putting more money in the pockets of tens of millions of people. The myth of trickle-down economics that was pushed by Reagan and his conservative crony capitalist buddies in the 80’s was a sham from the beginning. The economic prosperity they promised never came from the top-down; it never came by giving tax breaks to the wealthy; it never came by gutting welfare programs and deregulating big industry.
The economics I propose are trickle-up: when workers have more money, workers spend more money. And when workers spend more money, it benefits everybody. It benefits regular people who would have less anxiety from paying bills and putting food on the table. It benefits small businesses which would generate more revenue and give them a better opportunity for expansion, thus creating more jobs. And big businesses, well, they already have all the money. I think their owners will still be able to sleep at night and afford a meal here and there if they are paying their workers a decent wage.
But this isn’t just my opinion. Economics isn’t a game of you feel this way, I feel that way, and we’ll meet somewhere in the middle. America didn’t get out of The Great Depression by creating a ponzi scheme to get more money to the top 1%. And if the last 40 years in the United States are any indication, the solution to the current income-inequality problem can’t possibly pop up out of thin air by doing the same things we’ve been doing.
It probably won’t surprise you, but the way America did get out of The Great Depression was by doing the opposite: by creating a federal jobs program, by investing in working people. It was a time when the marginal tax rate on the wealthy was high, when it was easier for workers to join unions, and where organized labor was feared, and had power.
Everything is a circle, and once again we are at a point in history where so few have so much, and so many have so little. American Capitalism has created an entire generation of cynics and nonbelievers, and can you really blame them? We’ve all seen how this story ends. The stock market is going to crash again, hundreds of thousands of people are going to lose their jobs (again), and there will be zero accountability to the bankers who destroy the economy, or for all the millionaire corporate media members who spend their days telling you that the real problem you should care about is Russia, or poor people, or immigrants.
I don’t have to care about the minimum wage, because I make enough that I don’t have to. The reason I do care is because, as a worker and taxpayer who has a (small) stake in this country, what benefits those below me on the economic pyramid can only benefit me. I’m a dealer in the casino industry, so I obviously work for tips. If regular workers have more disposable income, that means more people are going to be spending an extra couple hundred dollars a month at the casino. And that’s more money that could potentially end up paying for my next Ralph Lauren jacket.
I really couldn’t give a shit whether or not you like Donald Trump, or whether or not you watch Fox News or consider yourself a conservative. I think the function of most mainstream media outlets isn’t to inform us, but merely divide us. The economic problems in the United States, from the concentration of capital, to the poverty-level federal minimum wage, to all the tax dollars that go to the military instead of healthcare and education, are not left vs. right issues. They are all top vs. bottom issues.
I know many of you can only read this through the lens that I am just some leftist, and therefore my economic ideas can’t possibly be taken seriously, but I can assure you none of these are my ideas. My bias is not towards some far-out Trotskyist ideology, but rather to what policies worked in the past. Right now America is doing literally everything opposite to what has proven to have worked.
But, again, these are not popular ideas to either major of the major political parties. Worker issues and class struggle are not talked about by the revolving door of millionaires on MSNBC and CNN and Fox News. However, if you go issue by issue, a majority of Americans support higher taxes on the rich, and more benefits to the workers at the bottom generating all their wealth.
So you can parrot the talking point that news people say, and tell me the economy is doing great because of the stock market. That’s not untrue. But the question I’m interested in is exactly who the economy is working so great for, and exactly who is enjoying the fruits of such a booming stock market. I don’t have to be a scholar to know it isn’t me, and it isn’t you.
Future Bets 