Obama and Democrats phony support for the minimum wage: it's about the elections

by Richard Mellor

Afscme Local 444, retired

The few thousand unelected rulers of society, the bankers, financiers, and other coupon clippers, have a bit of a dilemma; we outnumber them.  They have two political parties through which they enforce and direct their policies while we have no political voice of our own.

This means that in one way or another they have to pretend to have our best interests at heart when it comes to election time, after all, it’s the working class that votes.  They do this with lies, deception and semantic wizardry through their control of the mass media, the universities and other institutions that promote the market and capitalism.

At the moment there is a bit of a squabble between the leading political figures from these factions.  Obama is in a bit of a trouble around the Affordable Care Act or Obamacare as it is called and, as they always do, is making speeches aimed at his increasing his party’s political influence. This means tapping in to the mood among the masses.

He intends to make the inequality chasm in the US the main focus over the next three years he said Wednesday. “I take it personally” he told an audience at the Center for American Progress, a liberal think tank reportedly close to the White House. Both sectors of the capitalist class use these institutions and academics to fine-tune their political and economic message to ensure it resonates with the voter. “It’s what drives me as a grandson, a son, a father—as an American” he added.  (I’m in tears here)

Obama called for “eased rules” for union organizers whatever that means. Perhaps it means the Employee Free Choice Act is back after the Union bureaucracy got shafted on that some time ago. He is back talking about more stimulus including programs for children etc. as he also calls for more deficit reduction. He is also supporting raising the federal minimum wage as his party calls for raising it to $10.10 over the next “several” years and in a series of steps. And there is a bit of a movement developing out there around a $15 minimum wage. The president sends a “Powerful message; low waged jobs and income inequality are only increasing” said fellow Democrat, Tom Harkin who has sponsored a minimum wage bill in the senate. 

The Republicans of course are saying that all this caring stuff is about detracting attention from the ACA snafus and getting Democrats elected next year. They’re right about this of course but their squabbles meaning nothing to workers, it changes very little in our lives; you’ll still have to have two extra jobs if $10.10 becomes the federal minimum wage “several” years from now.  Their differences are over which section of them will govern society for the next four years.

Obama told the speculators and swindlers responsible for the Great Recession in a speech in Chicago in January 2009 “There will be time for them to make profits”, ,  “..there will be time for them to get bonuses…….now’s not that time.”.  As we can see and as we have learned through experience (or should have) he is a consummate bourgeois politician.

So what about the minimum wage? Both sides agree on the dangers of the minimum wage. We read about their concerns all the time. And what are they? Jobs, jobs, jobs. If the minimum wage is increased it will force employers to cut low-wage jobs.  It would break their hearts but they’d have to do it. That’s why the “party of the people” the Democrats, suggest raising it from $7.25 to $10.10 very slowly. They differ from their Republican friends who don’t want to raise it at all but they’re so concerned about jobs they want to make sure none are lost.

“Arbitrarily raising the cost of labor would increase not reduce the unemployment rate among young, less-skilled workers” says Bruce Josten, of the US Chamber of Commerce.  The C of C is one of the largest, most violent of all the gangs in the US that has prevented many policies that would make people’s lives healthier and opposed others or  restricting their influence like OSHA. But they never call it a gang, it’s legal you see. Leaving aside the false claim that all low waged workers are teenagers living with mum and dad; why would a living wage mean a loss of jobs?

Paying MacDonald’s workers $15 an hour would mean a drastic increase in prices, for the consumer the bosses’ argue. If they didn’t raise prices to pay for the wage increase they’d simply refuse to hire. “It would price these workers out of the market” they say.

The CEO of Boeing, James McNerney whose company is in the process of driving its workers’ wage and benefits lower adds his ten cents worth, “…if the workers are not productive commensurate with the increased labor costs then we’d move to places where the cost is commensurate” he says. McNerney is an advisor to the Obama administration on the issue of trade.  Along with his assault on workers in Washington State, he ensures US foreign policy that wages and conditions of workers in Bangladesh and Vietnam remain “commensurate” with productivity.

The Wall street Journal’s editorial also lambasts a minimum wage hike and those supporting it, “Where are employers in the low margin economy going to find this extra money………when was the last time they met a payroll? “  Even here, it’s not that the bosses’ standard of living might be cut instead of ours; the concern is the “payroll”, our jobs. The appeal is always to our self-interest.

Nowhere do we hear the word profits in these arguments against raising the minimum wage or wage increases in general. It’s always prices, the price of labor power (wages) or the price of other commodities workers make for sale in the market place. (labor power, our ability to work is also a commodity, a very unique one).

The bosses’ and their representatives in their two political parties don’t say, “If the minimum wage is raised and I can’t lay off workers or raise prices, it means I have to eat it in profits. My vacation will have to be postponed, I can’t buy that car for my son or pay his private college fees.”  In other words, what the fight is about her,e is which section of society takes a reduction in their standard of living, the bosses or the workers, we deal with that all the time.

Wages and prices are not organically linked. * If the bosses’ can raise prices they’ll do it anytime regardless of wages as long as the market will bear it, as long as the demand is there. If they can’t, they eat it in profits.  In the nineties, fast food joints were paying above the minimum wage voluntarily because labor was tight.  If they didn’t pay enough, the worker went somewhere else. Supply and demand has this affect.

Here’s an example I gave in discussions with co-workers.  If you call up Oakland airport here for a flight to NYC, it will cost more than the same flight on the same airline with the same unionized workers from San Francisco.  All the rest being equal, the difference is that the purchaser of flights has more leverage at SFO; the ratio between flights and those wanting them is different, supply and demand again. 

If there was a generalized increase in the minimum wage to $20 an hour say, it would mean some small capitalists would go out of business, or they may shut down one business and open up another to accommodate the demand for services or commodities that the increase in workers’ wages brought about. Some may pack it in and go get a $20 an hour job. It would simply shift capital investment from one branch of industry to another as workers’ buying power increased.  For some capitalists it would mean a reduction in living standards as their profits decreased, especially producers of high end goods like yachts or Lear jets neither of which are major purchasers for working people.

The dominant ideology in any society is the ideology of the ruling class, and capitalist ideology explains that only the market can provide life as we know it.  The capitalist class claims that only private capital can provide jobs and a future. This is paramount for them because profit has its source only through the buying of labor power and its use in the process of production. This is another area workers have to familiar ourselves with as most of us believe capitalists make profit by selling the commodities we produce above their cost as opposed to what actually happens, that a portion of the labor used to produce them is unpaid.

Elizabeth Warren recently pointed out that if minimum wage incomes had grown over the past period at the same pace as it had for the top 1 percent of income earners, it would actually be closer to $33 an hour than the current $7.25.  She won’t campaign for that though because her allegiance is also to the 1%, but like other liberals of her class she is concerned that they are overdoing it a bit, being too greedy increasing the chances of social unrest.  One of the reasons for the assault on public workers and services other than it crowds private capital out of the marketplace reducing opportunity for profit making, is that by its very existence undermines the dominant ideology in society that private enterprise is the answer to all things.

I tried to be a white-collar worker once because being a ditch digger was not considered the best work when it came to social mobility and recognition, there’s nothing wrong with white collar work, it just wasn’t what I was used to. I tried to sell insurance to small businesses but couldn’t do it, these poor bastards were up to their neck in insurance and in the clutches of the corporations. The guy training me told me that to ignore what a client says, “No means convince me”, he also told me that when you’re trying to sell the policy to the client and a plane crashes in his back yard; ignore it.

If you don’t feel confident countering the 1%’s arguments that justify their exploitation and thievery, simply ignore them and follow your class instincts. We know what we need to feed our kids and put a roof over our heads; we’re economists.

* For a more through explanation of wages and prices read Marx's Value Price and Profit

and its companion:  Wage Labor and Capital