At a Reddit site on the Internet, a person who self-identified as a right winger asked why there were so many homeless people, poor people, struggling workers in “blue” states and cities. My reply was that there are homeless people, poor people, struggling workers across the USA and since cities have dense populations, by definition, they would have more of everything, including homeless and the rest.
I’m not really satisfied with that answer. I have rephrased it and posted it here. Why are there poor working class citizens in Massachusetts? We pride ourselves as the bluest of the blue, Democrats run our state senate and house and even when we elect a Republican as governor, they are portrayed as “centrist” Republicans who would probably run as a Democrat in a red state.
Why were our state legislators silent on wages until the threat of a state ballot?
In Massachusetts, more than 70 percent of adults living in poverty worked either full-time or part-time jobs. Why?
Why does Massachusetts have one of the highest levels of income inequality in the nation?
I don’t want charity for the working poor. To quote Reinhold Niebuhr : We have previously suggested that philanthropy combines genuine pity with the display of power and that the latter element explains why the powerful are more inclined to be generous than to grant social justice.
Why are there so many wealthy Democrats in this state who seem to ignore the plight of the working poor? Was Upton Sinclair correct when he said “It is difficult to get a man to understand something, when his salary depends on his not understanding it.”
Back in 1968, Merle Haggard wrote a song a as a tribute to Oklahomans and others who lived in labor camps during the Great Depression.
Mama’s Hungry Eyes
A canvas covered cabin in a crowded labor camp
Stand out in this memory I revived;
Cause my daddy raised a family there, with two hard working hands
And tried to feed my mama’s hungry eyes.
He dreamed of something better, and my mama’s faith was strong
And us kids were just too young to realize
That another class of people put us somewhere just below;
One more reason for my mama’s hungry eyes.
Why Are There Poor Working Class Citizens in Massachusetts when Democrats are in control and have been for generations?
The most obvious answer to your question is perhaps also the least useful — the reason why there are poor working class citizens in Massachusetts is that the handful of people at the very top of the wealth distribution have taken essentially all the wealth.
As we’ve agreed before, it has little or nothing to do with political affiliation. A great many of the “Democrats” who control Massachusetts state government would be Republicans in any other state. The wealth tax proposal by Elizabeth Warren is radical in no small part because its the very first time any official has proposed to actually tax wealth.
It is important to stay focused on wealth, rather than income, concentration. The primary effect of taxing high income is to make it harder to become wealthy.
In addition to a wealth tax, we could and should dramatically increase the estate and gift tax on large estates. The federal estate tax floor is already $11.8M per taxpayer. No estate smaller than that will ever by subject to any federal estate tax. The maximum current estate tax rate is 40%. The GOP wants that to be zero. During America’s best times for the middle class (1941-1976), it was 77%.
When wealth is captured by a handful of uber-wealthy, it is not available for anybody else to earn or spend. When there is no wealth to earn or spend, more people are homeless. To your specific question, when there is less wealth for the rest of us, then more people chase the smaller wealth.
It’s a game of musical chairs, with the uber-wealthy owning the merry-go-round and the chairs and the rest of us running ever-faster trying to snag a constantly shrinking number of seats.
My view is that taking back wealth from the very wealthy and distributing that wealth among the rest of us is the only way we’re going to restore our economy to the health it enjoyed fifty years ago.
Well said Tom. Sad but true.
I want to ask about your comment that you “don’t want charity for the working poor,” which I think means that you don’t want, for example, UBI, welfare payments, tax credits, etc. You want dignified jobs that pay more. From the perspective of “not wanting charity,” why is an increased minimum wage different than direct payments by the government? In both cases, people are going to receive money that they would not receive in the labor market without government intervention. The real difference is that with UBI etc. the cost is socialized, whereas with a high minimum wage the cost is borne by the employer, or more realistically by the employer to some extent and by consumers to some extent (in the form of higher prices). If we are talking about the dignity of labor, the morality of the thing, and so forth, why is better to force the employer to pay more than the labor is worth than it is for the government simply to hand out the money? I don’t understand this at all. This is not an argument against the minimum wage, it’s just a question about your basic perspective, which from reading many posts over time I take to be that it is just immoral and against the dignity of workers to pay them so little.
If a cop on the beat discovers a thief forcibly taking money from a victim, is it charity for that cop to stop the robbery? If a vicious and cruel bully “asks” a weaker and much smaller victim for money, does the victim really have the ability to say “no”? Does the victim’s “consent” mean anything? Does “consent” mean anything when a person has no realistic choice but to say yes?
A minimum wage is a mechanism for society to stop employers from forcibly robbing the less powerful of the value of their work. A minimum wage recognizes that many people have no realistic choice of refusing to work for a given pittance in the absence of a minimum wage.
A different and related basic perspective is the question of who has the right to own newly created wealth. For wealth that is created without labor, who does that wealth rightly belong to?
Your comment is premised on the view that someone’s labor is worth more in money than what anyone is willing to pay for it in money. It’s a misunderstanding of what it means to say that something has a dollar value. I am not opposed to a minimum wage. I am just saying that from the perspective of the dignity of the worker, I don’t see any difference between saying my employer should be forced to pay me more than my labor is worth and saying that the government should pay me regardless whether I work. If anything, I would think the latter would be preferable to the former from a perspective of dignity, because we could say that everyone has a right to a certain standard of living no matter whether they work.
Our entire economy is premised on the axiom (it’s much stronger than a view) that the value of someone’s labor is higher than the cost of that labor. That’s the only way to generate profit.
The wage of a worker isn’t paid by “anyone”, it is instead paid by that worker’s employer. A for-profit enterprise can only earn a profit if it is able to sell the worker’s product for more than it pays that worker. While it’s true that the enterprise’s customer pays the worker, it’s irrelevant. The enterprise’s customer buys also buys the coffee in the lunchroom. So what? The employer pays the worker and the employer generates its gross profit by collecting more from its customers than it pays its workers.
I strongly suspect that every employer who is forced to pay its workers a minimum wage would prefer to pay those workers a few pennies per day and still get the same labor. That is the difference between having the employer pay minimum wage versus the government pay a UBI.
Suppose a UBI was in place so that a worker could collect $15/hour while not working for a given employer. How much would an employer pay that worker to punch a clock and push a broom forty hours a week? With no minimum wage, it sounds like you’re suggesting that the employer could pay the worker a pittance — say $1/hour for discussion — and collect the difference in profit. The effect of the UBI without a minimum wage in that scenario is to put $560/week ($14/hour) for that employee into the employer’s wallet.
That’s why there’s no trade-off between UBI and minimum wage, and that’s why a minimum wage is needed with or without a UBI. A UBI might increase the cost of labor (because the worker might demand more than the UBI to do the job), but that’s just a fixed offset that affects every worker. A minimum wage is still needed to protect those workers who for whatever reason must do the work and are not able to themselves force the employer to pay a higher wage than other employers pay other workers.
I share your doubts about the connection, today, between minimum wage and the dignity of the worker. In fact, I find the tie between wages and dignity to be both repulsive and destructive. The result is that we strip any person who is unable to work of dignity. I think that’s something we need to change.
Katherine Graham, by her own account, had never worked a day in her life until her husband — the publisher of the Washington Post — committed suicide in 1963. She became the first woman to be CEO of a Fortune 500 company, and built the Washington Post into the icon it has been since it singlehandedly broke the Watergate story. Katherine Graham had dignity when she turned 40, even though she had no wages or job at all.
I fully support a UBI, as well as other mechanisms for sharing wealth. There is no dichotomy between that and a minimum wage. Even with a UBI, we will still need a minimum wage (for the reasons cited above).
One thing that conservatives have right is that higher minimum wages make certain economic activities infeasible using labor. For example, if the minimum wage is $15/hour, and it takes 3 hours to fix a pair of shoes, and people are only willing to pay $30 to get a pair of shoes fixed, then fixing shoes is not a viable economic activity.
If UBI is in place at $15 with no minimum wage, then yes, the employer could offer $1/hour to employ someone to fix shoes. We don’t know if he will get any takers at that wage though. But maybe $5/hour is enough to get workers to do this work (plus the $15/hour UBI). Now fixing shoes is a viable economic activity.
At the same time, maybe there is an economic activity (let’s say cellphone sales) that is in high demand, something that can generate $20/hour profit. A $15/hour minimum wage might be seen as fair here, and implementing a $15/hour UBI might allow the owner to pay just $1/hour, pocketing the other $19. That certainly seems unfair, but maybe this economic activity sucks for workers. Maybe people would rather work for $5/hour fixing shoes – a job that is now achievable due to the UBI. So that other employer will now be competing for labor that isn’t as desperate.
I could be convinced to get on board with eliminating minimum wage provided that life-or-death needs are provided to everyone. This takes away the fear of death from the labor market, something that distorts the marketplace like a gun to every laborer’s head.
I hear you, and I think it’s a false dichotomy.
I’m pretty sure that my definition of what my “life-or-death needs” are is going to be drastically different from whatever definition the government says.
I don’t think there’s any need to eliminate the minimum wage if a UBI is put in place or vice-versa. Alaska — hardly a far-left radical liberal blue state — has had the closest thing to a state UBI in place since 1982. Alaska also has a state minimum wage.
I think there might be an interesting discussion about whether and how to use a UBI to defer increases in the minimum wage or vice-versa.
I remain convinced that we should do both.
How is worth decided? You seem to think it is like gravity or the speed of light; some natural measurable phenomenon that can only be observed and not the product of human decisions.
There’s a saying in Arkansas, “If you find a turtle on a fence post, you can rest assured someone put it there”.
It depends on what you mean by “worth”.
If you mean “worth” in the sense of self-esteem, dignity, and so on, then it has nothing to do with the market or any wage.
I think tedf is using the word in its much narrower sense of an amount of money. The worth of a collection of stocks and bonds is the cash value of those stocks and bonds in the current market.
Pretty much everything in the economy is the product of human decisions. The worth of a portfolio nevertheless is most certainly a measurable phenomenon. In addition to being observed, it can be raised or lowered in accordance with well-understood market mechanisms. If a company splits its stock two-to-one, then the worth of each share will be immediately cut in half.
Worth, in the context of this discussion, is an equilibrium largely governed by the balance of supply and demand for a given job, a given collection of employers, and a given population of workers. If an employer offers a higher hourly wage, more workers will seek that job. If an employer offers a lower hourly wage, fewer workers will seek the same job. If many workers can perform a given job, then a worker who demands a higher wage will find fewer employers willing to pay that wage. If only a few workers can perform a given job, then that same worker will find more employers who will pay that wage.
This is all basic micro-economics and it’s been known for centuries. It isn’t affected by rhetoric or folksy sayings.
Government intervention is what has tilted the labor market in favor of the wealthy class and against the working class. If it takes government intervention in the labor market to even the score, how is that a bad thing? How is it charity?
I agree with you that minimum wage is not charity.
I don’t think that has anything to do with government intervention. Wealthy people have controlled the labor market at the expense of poor people for as long as there have been wealthy and poor people — with and without government intervention.
The working class was absolutely plundered by the wealthy class during the peak of the industrial revolution where there was little if any government intervention at all.
I think a reasonably compelling argument can be made that protecting the people on the bottom from people on the top is a fundamental purpose of government. In my view, for the last 30-40 years (since Ronald Reagan), the US government has abandoned this fundamental purpose in exchange for the bribes that elected officials have received from the very wealthy. Some of those bribes might be legal — as in conforming to the laws of the time — but they are bribes nevertheless. A person who is dependent on receiving money from another person is far more likely to do the will of the person paying the price.
I’m really just following a different path to the same answer as you. The reason that it matters is that I think the assertion that protecting the vulnerable is “charity” is a pernicious GOP talking point that, like so many others, strikes at the very foundation of American representative democracy.