Danny Cardwell's picture

    Raising The Minimum Wage Treats The Symptom Not Our Illness

    In theory, raising the minimum wage would pull millions out of the hell called poverty. There are, however, unintended consequences that come with doing this: a portion of the very people such legislation is designed to help would be hurt; some jobs would be eliminated through automation, and the productivity requirements for those fortunate enough to have a job could exceed their physical capabilities. We could, inadvertently, speed up the economic Darwinism many workers are currently facing. There's enough Prima facie evidence for us to admit that low wages are now a structural part of global capitalism. In order to properly address the growing wealth gap we have to be wiling to admit that there are industries that depend on a supply of unskilled low wage laborers.

    Much of the economic analysis I see disseminated by the right ignores the developing world's impact on labor markets in America. I, cynically, assume this is on purpose. For the average low information voter, independent of party affiliation, the wonkier side of economic theory isn't something they're fired up to engage. For some of our fellow citizens it's easier to blame their economic realities on affirmative action or immigration policies than it is to look at global factors that may be at the root of their problems. Most people don't care that Mexico is dealing with the problems associated with Chinese currency manipulation, as well as a more competitive global manufacturing market. In a strange twist of fate Mexico is losing some of the manufacturing jobs they got from the United States a few decades ago. The developing capitalist countries in Asia and Africa are the de facto beneficiaries of the market's unrelenting quest to to cut payroll and meet shareholders rising expectations. Is there anything the left can, realistically, do to make American workers understand that we've made progress, but that we still have work to do?

    Our transition from an agrarian economy to an industrial economy wasn't smooth. Teaching farmers and field hands to work in factories had it's own set of problems, but it worked for two hundred years. Less than forty years into the information technology revolution it's become painfully obvious that IT isn't immune to capitalism's problems. We have software companies that use our visa policy to solicit the best and brightest graduates from the developing world as a way of reducing payroll. We're insourcing and outsourcing the tech jobs that were supposed to save us. The need to cut costs touches every part of our economy. Karl Marx was right in his Economic and Philosophic Manuscript of 1844 when he theorized that in the production based economy, money is used to produce more labor, which produces more goods, which leads to more capital. Money is never just an end. The interests of workers isn't factored into the equation. 

    The Republican platform of wholesale deregulation is just a symptom of global capitalism's greater economic illness: the unquenchable thirst for capital. Our trade agreements aren't designed to be fair to the American workforce. If every pro-labor law was overturned we might see manufacturing jobs return to our shores, If the minimum wage was $2.00 an hour jobs, not rain, might flood the Midwest. How much money do you think could be saved on safety harnesses, hard hats, and safety glasses? This is extreme, but it's consistent with the rhetoric that makes up libertarian and conservative economic theory. Once a company has shareholders or is owned by a private equity firm it's almost impossible for that company to remain pro-labor. The pressure to produce more money outweighs the costs of producing happier people.

    The sad actuarial truth is that a steep increase in the minimum wage could temporarily lift millions out of the category of the working poor, but it would also hurt smaller businesses, and cause a spike in the expected productivity of the labor force. While some sit idly on the sidelines waiting to get into the game, millions in the labor force are working their fingers to the bone with no chance of getting out of poverty. The minimum wage is never going to keep up with the cost of living. If we, progressives, aren't willing to openly support policies geared towards investment in large scale infrastructure projects, and creating community based government jobs with a living wage we're wasting our time. We face what's referred to in philosophy as the critics dilemma: If we state, too brutally, the nature of our economic situation we could cause those in the lower middle-class to lose what hope they may have for the future; however, if we understate the economic realities facing the working poor we could disconnect ourselves from their suffering, which could further alienate them. We have to be honest about our predicament and our intentions to deal with the macro level issues beneath the surface of our economy. We have to quit treating symptoms and start treating causes.


    Thanks Danny.  I'm with you as usual.  Raising the minimum wage will help some - and I do support a $15 minimum - but as long as our workers are competing directly with workers paid slave-wage levels in the far east, higher salaries here may well lead to higher unemployment.  I think it's worth the risk as the evidence suggests that when workers here have more buying power they stimulate demand sufficiently to offset the loss of some jobs to overseas producers.  But as long as ever "freer" trade is the trend, American workers will be on a treadmill.

    I think you are conflating low skill minimum wage workers, who don't compete with anyone but other local service workers, with higher skilled  and paid industrial and production workers who do compete with foreign industrial labor.

    One of the problems we now see is that millions of those higher skilled workers lost their higher pay level jobs and are competing for these low skilled and paying jobs to support families, which they were never intended to do and that is driving the demands for higher wages there.

    These wage hikes will have to be paid for and Capitalists don't share profits so higher prices will spread through the economy eating up much of the  gains these workers might realize. More tax revenues will be needed to pay the raises in government minimum wage jobs and because most of these jobs can't be speeded up to produce  production gains automation will continue to replace workers.


    The loss of many higher-skilled labor jobs to offshoring puts downward pressure on wages in lower-skill service work as formerly middle-class welders and accountants compete for jobs at Wal-Mart and McDonald's.

    Oh please, Hal - there's been a doubling of accountants in 30 years - we didn't outsource them - ever look at the BLS or something practical? http://www.theguardian.com/business/2015/aug/17/technology-created-more-...

    Not sure how much welding you expected to continue either

    "Finance and accounting (F&A) was one of the first processes that companies outsourced, and the practice continues to boom: Ed Thomas, an analyst for Ovum research, found the number of F&A outsourcing projects valued at $1 million or more increased in 2012 compared to the year before."  http://www.forbes.com/sites/xerox/2013/07/12/the-benefits-of-outsourcing...


    "In September 2010, the United Steelworkers (USW) filed a section 301 petition with the U.S. Trade Representative which accuses China of illegally stimulating and protecting producers of green technology exports, ranging from wind and solar energy products to advanced batteries and energy-efficient vehicles. Indeed, the U.S. trade deficit in clean energy products had more than doubled between 2008 and 2010, displacing more than 8,000 U.S. jobs in 2010 alone (Scott 2010a). The 2010 USW petition details more than 80 Chinese laws, regulations, and practices that violate international trade agreements and have hurt U.S. clean energy manufacturing and green technology industries." http://www.epi.org/publication/growing-trade-deficit-china-cost-2-8-mill...

    Your cite was to accounting positions in the UK.  I was discussing the US.

    UK, US, let's not quibble over a mere 8 places in the alphabet...

    We're joined at the hip in war and finance (which is just war by other means). You go to war with the beancounters you have, not the ones you wish you had.

    Yeah, I found UK accounting positions doubled despite offshore. You show some loss in the US due to some activity, but WHAT ARE TOTAL GAINS AND LOSSES OVER X YEARS? Always vague FUD of world going to he'll in handbasket. If you're going to make ridiculous claims, back them somehow.

    Update: Ok, on regular laptop - 1999 & 2014 data:

    Accountants & auditors 13-2011: 1,327,000  (1999) 1,333,000 (2014)  1,475,000 (2024 est)

    So not doubling like UK (though I don't know what related categories might be), not losing.

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