Sunday, August 14, 2016

$15 an hour in California Bay Area is starvation wages.

see below
By Richard Mellor
Afscme Local 444, retired

We think too small.  Like the frog at the bottom of the well.  He thinks the sky is only as big as the top of the well.  If he surfaced, he would have an entirely different view.  

The City Council in my local town just voted 6 to 1 to raise the minimum wage all employers must pay to $12 an hour by July 2017. Pay would increase after that by $1 an hour per year until maxing at $15 an hour by July, 2020.

Naturally, this issue raises hackles among conservatives and liberals alike. But let’s think about this a bit more. Firstly, brushing all objections aside, our starting point as workers, socialists, and activists must be to demand what we need to live a decent and secure life in harmony with the natural world and not what, corporations or politicians or their allies atop organized labor tell us is acceptable.

We are always told that the rich, hedge fund managers, CEO’s of major corporations and the like have to be allowed to make as much money as possible or they will not be motivated. But when it comes to workers, the low waged among us are expected to be motivated receiving wages that barely keep food in our children’s mouths or a roof over our head. In fact, the low waged often have to work three jobs, have to-------keep three employer’s in business-------in order to make barely enough to do that. If you steal, you go to jail.

I do not oppose the council’s plan but let’s be honest, in this part of California you can’t live a decent life on $15 an hour now, never mind in 2020. It’s poverty wages. According to Rentjungle, As of July 2016, average apartment rent within the city of San Leandro, CA is $1807. One bedroom apartments in San Leandro rent for $1614 a month on average and two bedroom apartment rents average $1907.”

The present minimum wage here is $10 an hour, the same as the state. So a family of four assuming both parents are earning minimum wage would bring home $3,840 a month before taxes for a six-day week. Then there’s expenses, food, transportation, medical care, rent, childcare etc. Assuming they want their children to have their own bedroom, they would have to cover these expenses with $1933 after rent. Then there’s childcare. I looked up childcare and found costs from $1200 a month to $1600, another paying $500 for two full days only. Lets be generous and say they got a deal of $1500 for two kids, so they would be left with around $400.

The US is the richest of the advanced capitalist economies and the worst one to be poor in. Better paid workers and the middle class are a few months away from homelessness themselves. If you can’t pay here, you’re not worth much. There’s a reason so many of the kids that blow away their class mates are from the middle or upper middle class, their home lives are a wreck, the competition to maintain their social status fierce.

So when we’re talking about raising the minimum wage we must reject outright the ideology of the market we must take all these things in to account and start from what we need.  We must look at this as we should with all aspects of society, from a class perspective.

When I was a candidate for the Oakland City Council in 1996, a major aspect of my campaign was for a $10 an hour minimum wage. Representatives from small business and the Chamber of Commerce strongly opposed the measure it as they did at the San Leandro meeting last week. It will put them out of business is the argument, and we hear all the time that they’ll have to raise prices and pass the costs on to the consumers. This last argument is basically an attempt, intentionally or not, to blame the workers’ wages for the price of goods. It’s used to coerce workers to accept concessions or the they’ll move production to South Carolina or Vietnam.

But wages and prices are not organically linked. Capitalists are out to get as much for their products as possible.  But they cannot raise prices at will.  They are subject to economic laws. If the demand for labor say, is greater than its supply, then this places the sellers of labor at an advantage over the buyers and the market forces the buyer to offer higher prices for workers.  This happened among the fast food industry in the 1990’s boom when wages rose with no significant attempt on the part of the labor leaders to organize workers to force increases under favorable conditions; the rise was market driven. The competition between employers for labor power was high and wages at the bottom end rose.  If the supply of labor is greater than the demand, then the buyer, the capitalist, is in a stronger position.

So what happens when an employer can’t pass the cost of a forced wage increases on to the consumer?  Where do the increased wages come from? Well, their profits of course; the income of the business owner. But they are not going to say, “I can’t pay higher wages because I will have less for myself” or “I have to raise prices because I live in a nice neighborhood and will have to move if I don’t.”  By saying that they will have to lay people off which means the worker accepts a lower wage or no wage, or increase prices which means the business goes under and there’s no job and no service, the motive seems egalitarian as opposed to self serving. This is not always intentional, sometimes the system works behind the backs of its participants.

The various campaigns for a higher minimum wage have been fairly successful but have also been coopted by big business and their political parties, particularly the Democrats. The heads of organized labor have also undermined this movement getting opt out clauses for unionized workers they represent in order not to place undue pressure on the employers who may reduce other benefits to offset the wage increases. And $15 an hour ten years from now will be near starvation pay. Socialist Alternative in the struggle in Washington State accepted this compromise in order to maintain the support of the leaders of the unions, that stifling bureaucracy atop organized labor that has built a relationship with the bosses based on labor peace. The alternative to this is building a wider movement linking various issues.

In the San Leandro case, the head of the Alameda Labor Council spoke in support of the measure but their entire approach is to accept wage and benefit cuts for their own members as SEIU did with the opt out clause in the Northwest.  The higher waged workers, auto, retail, manufacture, have seen wages and benefits savaged with the passive acceptance and in some cases hostile intervention of the heads of organized labor. In cases like the Cleveland Five in Cleveland North Carolina, the UAW international leadership cooperated with the Freightliner corp. in undermining and even terminating members of an aggressive leadership that opposed concessions. The Alameda Labor Council has 100,000 workers affiliated to it although most of them wouldn’t know it. The LA Labor Council has 800,000 workers. The labor hierarchy would not consider for one moment organizing and bringing the potential power of these their members to the table. They are more afraid of a conscious membership than they are of the bosses.

However, the argument that a price increase will hurt community businesses is generally correct. A cut in pay hurts a worker’s income and an increase in the cost of labor power will cut in to an employer’s income if they have no way of offsetting it. They take a lower standard of living and even might have to pack up and go get a nine to five.

The workers’ movement should make it clear that part of our struggle is to free community business from the stranglehold the corporations have over them. Community businesses are bled dry by insurance companies, banks, loan companies, big landlords and other leeches.  Taxes are another burden both workers and small business bear disproportionally.  This class, the small shopkeeper basically, is a class workers can win to our side in the struggle against big capital and the 1%, but our movement has to reach out to them too and we do that by showing that they can meet many of our demands if we collectively direct our activity and power at big business, Wall Street and the two political parties that represent their interests. Workers with more money in our pockets are good for community business also.

The small business owners generally see the workers’ wages as the easiest way to cut their expenses. They do not want to take on the banks, the insurance companies, the tax collectors and so on. This is a false and unfair approach and one that will backfire on the them. They should unite with the low paid workers to fight for lower rents, lower taxes, lower insurance payments etc., and in this way pay higher wages. And the workers’ movement must appeal to them on this basis, many of them have a niche in the community that they are happy with and part of, and we can be allies. But if a small business in the course of the struggle claims it cannot survive without cutting wages or increasing prices then let’s open the books and let the movement decide collectively.

Returning to organized labor. It is important that the movement that is building for a higher minimum wage must orient to the rank and file of organized labor with its 12 million members. All social struggles should have this approach.*  As we have suggested in the past, every union member should be at their union local moving motions to hold meetings in the workplaces, in the unions at all levels for the minimum wage movement. The bureaucracy with its army of staffers enters in to this movement as with all movements, to temper it, soften it, ensure it is made acceptable to the bosses and their allies in the Democratic Party. This is against the rank and file members’ interests.

This is the way to link the existing trade union membership with the movement for a living wage whatever the amount, whether their wage is above $15.00 an hour or not. The more they keep down the minimum wage the more the bosses will push down the wage of all workers, the more the workers push up the minimum wage the more the wage of all workers will be pushed up. The reason this would happen would be that a more powerful workers movement would be built and this would push the bosses onto the defensive and force them to hand over some of the trillions of dollars they have looted from workers and hidden away in the last decades.

Here are a couple of small examples of the massive wealth that is in the hands of a minority of Americans. In the book, The Box, the author claims that one of the first container trips from New Jersey to Houston in 1956 lowered the cost of transporting the cargo by 97%, from $5.83 a ton to 15.8 cents a ton. Where did all this money go?  Workers have not benefited form productivity and the incredible technology boom.

And, between 1980 and 1992 steel companies reduced the man hours necessary for the production of a ton of steel from 9.2 to 5 as in roughly the same period, 1982 to 1994 according to Business Week, corporate profits increased 166%, consumer prices by 75% and executive pay 514%. Reports in 2012 claimed that as much as $32 trillion has been stashed in offshore accounts around the world in order to avoid paying taxes.  The taxes on this alone would end poverty. Too many examples like these exist.

The last 40 years has seen massive wealth accumulation in the US as more and more billionaires have emerged.  Our expectations are too low as well as our wages, and among all this wealth, the retirement age increases.

Our worldview not theirs
In feudal times, the dominant ideology was that the King was King by God’s will. Where did that idea come from? The king of course.  The capitalist says that they will return eight hours value (in wages) for eight hours work. Impossible. They say don’t fight for higher wages or they’ll just raise prices. Not true.

I oppose all taxes on workers, the middle class and community business. I am opposed to bonds, borrowing money to build a school hospital a neighborhood swim pool (remember them!). At some point we have to fight back, go after the people that have our money rather than fight each other for the crumbs. I’m opposed to profit driven wars that cost trillions and I am opposed to wage concessions and for a minimum wage people can live on. We could perhaps frame this in a certain way that would demand a wage that includes a basket of goods, a minimum for housing, a minimum for food, a minimum for leisure etc. Education, health care leisure centers and even housing should be provided socially. It’s not difficult.

We can take some advice from our enemies:

“Negotiations are a euphemism for capitulation if the shadow of power is not cast across the bargaining table.” George Schultz

* Check out the movie Pride

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