Wage Rage

In response to recent proposals to raise the minimum wage for fast food workers, I've seen a range of reactions, from 'it's about time!' to 'what a terrible idea!'

The best and simplest argument for raising the minimum wage is: it's ethical. Those in support of a wage increase argue that raising wages for low income earners facilitates solutions for the quality of life dilemma faced by the working poor all over the country. A vast majority of Americans face skyrocketing costs of living and decreased net earnings. Wages have gone stagnant and costs have risen exponentially. Even a modest wage increase for so-called 'bottom earners' can result in increased productivity, morale and quality of life, while only making a nominal dent in a company's bottom line.

However, there is much resistance to this idea as well. Do some companies have an ethical imperative to raise wages for their workers? For some, ethics is irrelevant, For some, it's all market politics, and everything else is just noise.

Those against wage increases - particularly for 'entry level' jobs - use a less complex, more elegant line of reasoning to make their argument. Theirs is a simple reminder that supply and demand dictate value. To determine that value, they argue, one need look no further than markets, numbers and costs. Once you crunch the numbers, they glibly assert, there is no argument for a minimum wage increase that follows market logic, and thereby no argument for an increase whatsoever.

Their thinking follows a train of thought that goes something like this:

Wages are driven by the job market. The market determines not only the value of a job, but the value of the worker doing the job. Workers are thereby costs, and if you, as an employer, pay a worker more than that job is worth, you are, in effect, throwing money away and pricing yourself out of the market.

The notion that the market should never bear costs that its internal mechanisms do not allow for is elegant and airtight, from this market theorist's point of view. Market theorists who argue for keeping wages at market value all make the same basic assumption. They presume that the rules of the market are sacrosanct and fundamental and must be followed, lest business fail. They presume that companies who deviate from this path and explore ethical dimensions, social considerations, moral dimensions and fairness issues will ultimately see their business fail - or at very least, slowly lose the potential for increased profits over time.

While those who support wage increases argue the practical and ethical dimensions, those opposed to what they consider 'arbitrary' wage increases adopt a numbers, market driven approach. Market performance, to the free market economist, is the only variable that directly impacts whether a company lives or dies, and the only variable that should determine executive decisions like pay and benefits. There may be sociological, anthropological factors that determine how a company should improve its culture and the quality of life for the communities it serves, but opponents of the ethical wage increase are not interested in looking closely at any variable that does not directly link to market performance.

The typical market purist looks at wage issues in a vacuum, excised from geographical, sociological variables. The market, for him, is a self sustaining entity whose rules must be applied systematically to cost benefit analyses that companies perform when considering how much to pay their workers. Wage earners thereby lose their sociological dimensions in this purely market driven theorizing. They become costs to be considered, like any other cost. Their humanity, it is argued, is irrelevant to the bottom line, because without that bottom line, they would be out of a job.

This idea of workers as costs - or even cost liabilities - is not new to the corporate world. It's not some novel idea. In fact, it's the default approach in today's business world. The free market (driven by stock markets, job markets, and complex systems of determining shareholder value) demands that workers be considered costs. The job market assigns them an objective value, and based on that measurement of worth, determines wage or salary, benefits, and retirement packages.

This criteria - used to establish the value of all jobs, from entry level to executive -  is the cornerstone of any capitalist society. A hedge fund manager literally creates wealth out of thin air, thereby making his kind of wealth management position highly lucrative. Managers and bosses are usually closer to the money, so by market standards, they're more deserving of a share of that wealth. Even if they're terrible at what they do; even if they're engaged in illegal or unethical activity, their proximity to wealth creation, by market standards, places more value on what they do.

The value of low wage positions is measured by the market's demand for such jobs, rather than the local community's demand. In poorer communities, and in places where more people are struggling and out of work, a 'low demand' job may be highly coveted, but the market doesn't see it that way. This supply and demand criteria for determining job value, and how high wages can go, boils down to numbers.

The justification goes: there are more workers then managers at the entry level, thereby making those positions less rare, and less valuable. It's market theory 101. Management positions - by their very nature - are perceived as worth more because the responsibility is greater, requisite education requires vast amounts of investment on the part of the applicant. High salary jobs come pre-loaded with years and years of investment in special training and education. Pay disparities between management and subordinates are therefore normal, even by progressive standards, so far as the pay ratio isn't absurdly disproportionate. Unfortunately, with executive pay - and payouts - at a historical high, and wages sunk in the dead marshes for everyone else, it's hard not to get a little bit indignant when the business community continues to use a myopic, callous, inside-the-bubble justification for why wildly disproportionate pay ratios are acceptable.

Jobs like sanitation worker, clerk, grocery store bagger, fry cook and Wal Mart greeter all have less worth because of their high supply, low demand, and low value. Market theorists argue that a wage increase on 'entry level' positions, without market justification, is a naive waste of money, a slippery slope that does not guarantee a motivated or more productive workforce - just an overpaid one.

Free market Capitalism's boogeymen - Government workers, unions, and their bloated pay, exorbitant benefits, and famous laziness - are often used to drive a wedge into the larger argument about wage fairness - to great effect.

I've heard clever arguments opposing wage increases that tap into this resentment of striking workers. The anti-union line of thought makes the strikers the villains, the executives the magnanimous diplomats, and the rest of us the victims. Instead of a larger discussion about broadening worker representation one step at a time, or much needed union reform, free market advocates stoke resentment for those few groups who do still have representation. The hidden message is that some groups don't even deserve representation and are somehow denying that representation for more 'deserving' low wage groups. That is just one way to vilify the fractured, imperfect, and not-always-righteous union force - question their existence by accusing them of not giving their rights to everyone. I am amused whenever I hear this argument, because it is - in essence - a Socialistic premise in the service of union busting.

And what about the BART strikers? What about communities like the Bay Area, where a fast food wage isn't a livable wage? What about the mindset that these entry level jobs, like fry cook, janitor, or sanitation worker, aren't real jobs? How did the union worker become the poster child for an entitled, pampered class instead of someone like the under-performing, tax-avoiding CEO with the golden parachute? Why are we suddenly vilifying those at the very bottom, stoking resentment among the middle class against those less fortunate than them? How have the working poor been so successfully portrayed as millstones around the necks of the middle class?

For starters, people resist, or flat out deny, the insidious nature of institutional poverty - the kind of poverty that makes entry level jobs permanent fixtures for the working poor.

I take offence at the fallacious, arrogant idea that there are 'starter jobs' and 'real jobs' that are more deserving of respect, admiration and reward. The very notion of a 'starter job' sprouts from Silicon Valley's own high opinion of itself. The Valley is a place where high minded technocrats hide their faces in their coffee as the janitors walk by. In their minds, they're changing the world by virtue of their hard work and intelligence, and everyone else is just lazy. The mindset that some workers don't deserve higher wages or bargaining rights because their jobs aren't 'legitimate' or 'serious' is such an aberrant notion.

"Anyone who considers 'Macdonalds' a real job should just shoot themselves." says one compassionate comment I found. "Everyone knows that these are just entry level jobs - they're barely jobs!" says another. "If you stay in that job, your a loser who deserves to remain in HELL." says another Dante Alighieri inspired comment. "If you stay in a shit dead-end job, that's your choice!"

There is evidence to support that there are people with choices who are not aware they have choices. And then there are those who are aware of the choices who are locked in a cycle of poverty that restricts their access to time, support, logistics, community and opportunity. This is one symptom of poverty, but poverty itself is not simply a series of descriptors. It is a state of mind, one that, like depression, can be very difficult to pull away from without the proper support.

Unfortunately social welfare programs that might supplement or even sideline the need for higher wages - be they Government or privately funded programs - are being crippled by a popular notion that somehow, poverty is a choice that is up to the individual to solve. Personal responsibility theology states that all social blights - from dead end careers, to lack of a good education - are up to individual choice. The nature of poverty, however, is missed entirely by these self-described experts of human nature. Poverty is not simply defined by the whole of someone's assets or net worth. Poverty is not only not making enough money to live on. Poverty is not only scraping by with few resources. Poverty, at its core, puts a screen up between large groups of people and the potential opportunities available to them. Poverty blinds the poor from seeing their own potential, just as drug addicts without support networks fall further and further into their addictions. This is an immensely complicated topic, but it ties in directly to why the argument for higher wages is not - and should not - merely be the purview of the market theorist.

I'm called spurious and naive for supporting a minimum wage hike. The real spuriousness and naivete, however, is demonstrated by those who believe poverty is merely the choice of the lazy. Anyone employing market-exclusive reasoning for not raising the minimum wage, whilst ignoring the sociological elements, is ignorant to the nature of poverty. For a frightening percentage of people, low wage jobs are the finish line. Inherent laziness is not the reason people have a difficult time pulling out of poverty, or enrolling in school, or finding new opportunities. People who make statements like "if you can't afford to live here, or if your life here sucks, just move to another town" don't believe in the concept of institutional poverty and racism. They believe that everyone is the same, and that theory and practice are identical, and that anyone with a thumb can hitch a ride out of any bad circumstances and simply climb up the ladder to the next level.

That's not how it works. For those who have had opportunities so taken for granted as to be almost invisible, envisioning a life where those choices aren't so readily available can be very difficult. I'm not implying that we should immediately overhaul the inherent value of work, or even set about re-defining the definition of real work. That needs to happen, but it can wait. We need the market theorists, the numbers people, the economists and the number crunchers on our side. But we also need to lift the veil on the dimensions of this discussion that transcend theoretical economics and head into the realm of the humane, the ethical, and the just.


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