A “New” Economy: Start by Increasing Minimum Wage

by Paula Apynys for The Economy, Working

The reality that our economy doesn’t seem to be working particularly well for much of America seems to be seeping into our collective consciousness. It’s a topic I’m seeing addressed in more and more outlets, which is good news. Of course the screaming question is “what to do about it?”

I enjoyed a wonderful conversation with friends the other night in which we discussed and debated that question. We didn’t arrive at any definite answers but we did start to agree on a couple of basic ideas:

  • New conditions require new approaches;
  • We have to stop the relentless reduction of value being assessed in dollars, and people being viewed as expendable units who’s primary purpose is to consume;
  • localize, localize, localize!

But when I suggested raising the minimum wage, some folks balked. It was interesting. People immediately began listing the reasons why it couldn’t be done, which boiled down to: “folks at the top won’t let it happen” and “won’t it destroy jobs?”

Increase Minimum Wage

I definitely believe minimum wage needs to go up. A point I think gets overlooked in discussions about an increased minimum wage is that an increase in minimum wage would essentially  mean an increase in a lot of other wages too. The actual numbers of people who earn minimum wage (or less) is relatively small (see this report:  http://www.bls.gov/cps/minwage2013.pdf), amounting to about 3.3 million people. But the number of people who earn more than minimum wage but still not enough to live on represents a whole lot more people. Thus, if minimum wages go up, it will affect way more people than the couple of million at rock-bottom.

The immediate response so many people and businesses have is “how can we possibly do this?” The conventional idea is there’s just not enough money to go around, even though trillions of dollars are being generated by this economy. One problem is most of the money is sitting at the top of the pyramid and not moving. A good deal of that money is being “created” through predatory and parasitical activities as opposed to actual creation and selling of usable goods and services, which, to me, means its not really “real”. And it isn’t — it’s numbers being moved from database to database, but those numbers obviously hold tremendous symbolic power. 

We might all want to recall Henry Ford’s great realization which was that he wouldn’t be able to sell cars unless people earned enough money to be able to buy them. He started paying his employees high wages and thus birthed America’s 20th Century middle class. There were a lot of other differences operating in how our economy became structured, especially during and post-depression. Taxes were higher for top incomes; top incomes were lower relative to average incomes; corporations actually paid their taxes and business leaders thought of themselves as “Americans” who owed something to the country, rather than “financiers” who look out only for themselves. 

At any rate, when people worry about raising wages, they do so from a sense of helplessness, because we’ve been taught to think of the economy as something that runs on some sort of natural law, like weather, instead of the reality that the economy is a human construct shaped by very specific human choices, like tax rates and percentages and caps and loopholes. 

So instead of all of us assuming a crouch of fear when the topic of increasing minimum wage, or wages in general comes up, why don’t we instead start trying to figure out “how to do it” instead of “why it can’t be done”?

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