One Market Under God
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George Will speaks the gospel of the GOP elite and libertarians with his argument that the minimum wage should be $0. Trust the market, he says, and wages will be set to a decent level. Of course, that’s what got us here in the first place. Blindly trusting the market to do what’s right without any policing inevitably leads to the market’s participants doing everything within their power to line their pockets and bollocks to everyone else.
The whole reason we’ve got minimum wage law and other labor laws is that left to their own designs businesses colluded with each other, fixed their prices, and paid their workers next to nothing in horrible life-threatening conditions (and some of those laborers were children).
Capitalism is great and it works, but without policing, rules, and enforcement it is the playground of devils – devoid of morality and a pariah on our society. We learned that lesson collectively already, we won’t repeat it. America’s past that.
UPDATE: This is the kind of story that makes regular people roll their eyes when the conservative elite pooh-poohs a piddling increase in the minimum wage.
By the end of 2005, Nardelli received packages worth $154.3 million, not counting the value of stock options, since becoming CEO. His pay for 2006 hasn’t been disclosed.
Now, after six years on the job, Nardelli will get cash severance of $20 million, acceleration of unvested deferred stock awards and options valued at $84 million, vested shares worth $44 million, bonuses and long-term incentives of $9 million, 401(k) payouts of $2 million, retirement benefits of $32 million and $18 million in other entitlements if he abides by no-compete clauses over the next four years.
The total package is seven times the $30 million Home Depot set aside last June for stores and employees that provide good customer service. Home Depot has 2,127 stores and 355,000 employees in the United States, Canada, Mexico and China.
But clearly $7.25/hr means the end of civilization as we know it as the unwashed hordes get a tepid increase in pay. Bob Nardelli’s gold-encrusted loafers don’t go for free, you know!
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© 2000-2011 Oliver Willis
Merely the interest on this one robber baron’s severance would fund the minimum wage increase for 500 full-time workers in perpetuity.
Stuffed shirts like Will will never understand that total market freedom is as extreme as total market control.
How many Home Depot employees will see an increase in pay if MW increases to $7.25/hr?
ZERO.
Not in the immediate perhaps, but a higher minimum wage gives a higher number for them to compare their wages to, putting them theoretically in a better position to argue for a pay increase for themselves, either at that job or another. Thats not much of an argument either, that increasing minimum wage wont have a positive effect in this specific case, and begs the question that if an increase would have such inconsequential effect, why is it opposed so strongly?
Oliver,
Why do we never here you complain about how much money Clinton Portis makes? Or how much money Danny Snyder makes?
1) Principle
2) Many union job contracts are tied to MW calculations…raising the MW will also mandate already high wages for union employees to go up automatically
3) Raising the MW will make a greater group of workers part of the “working for MW” classification because the cutoff will rise up to their current wages … then we’ll hear cries of “Look at how many people are working for MW!”
4) How do you justify keeping a worker who makes double the current MW (because they’ve worked hard and earned raises) at their current wage while Joe Smoe, who just started working at the same place, gets a raise for just being alive?
5) Where is the money going to come from to increase the wages of workers (mostly part-timers) who are making MW? In other words, what will these employers have to do in order to meet an increased payroll?
“5) Where is the money going to come from to increase the wages of workers (mostly part-timers) who are making MW? In other words, what will these employers have to do in order to meet an increased payroll?”
Either…
A – Raise the cost of their product.
B – Lay employees off.
Thought provoking Rebuttal, JWG, and I thank you for it
1) Principle
…people need to be making significantly less money than they require in order to sustain themselves… on principle? I’m sure you cant be that cruel, would you care to clarify?
2) Many union job contracts are tied to MW calculations…raising the MW will also mandate already high wages for union employees to go up automatically
Here you may have a point, I was in a grocer’s union for all of three months and dont remember anything about how it was run. I’d be interested to see a citation, but I’ll plead ignorance and concede to you that such calculations probably exist, but would such mandatory increases for “high-paid union employees” (I saw $6.75/hr while paying union dues, for the record) not be negotiable? And even if so, how bad a thing would that be?
3) Raising the MW will make a greater group of workers part of the “working for MW” classification because the cutoff will rise up to their current wages … then we’ll hear cries of “Look at how many people are working for MW!”
…you believe people will be complaining that, since MW has gone up to a level where more people are closer to self-sustaining on it, that people will complain about more people being on it? And that those complaints are reason enough to keep from doing it?
4) How do you justify keeping a worker who makes double the current MW (because they’ve worked hard and earned raises) at their current wage while Joe Smoe, who just started working at the same place, gets a raise for just being alive?
I’m currently making $16.50/hr, and you’re assuming I’ll have a problem with someone going from making a third my pay to just under a half? Um, well okay, I justify it to myself because he needs that money to be able to live. Question asked, question answered.
5) Where is the money going to come from to increase the wages of workers (mostly part-timers) who are making MW? In other words, what will these employers have to do in order to meet an increased payroll?
I dont think you get to make that argument, as most of what we’ve been hearing is how the economy is doing much better because businesses are doing better, which puts them in a better position to share their wealth. If you want to argue that they shouldnt be forced to spend their money like that thats fine, but you cant pretend the money isnt there.
C – Not pay CEOs hundreds of millions.
It’s the same logic that Henry Ford used to raise the wages of his assembly-line workers decades ago. He realized that if he paid his workers better, they could afford to buy his cars. Not to mention that the people who did business with Ford’s workers also profited from their newfound money and made enough to afford cars themselves. More car sales = more profits = more money for both Ford and his employees.
Raising the minimum wage puts more money in the hands of the working poor, who will promptly go out and spend it. Businesses may have to pay more for labor, but the additional sales would make up the difference. At least that’s how it worked the last time the minimum wage was raised. The economy hummed along just fine and none of the dire consequences that conservatives were predicting actually happened.
I think everything wrong with Will’s Weltanschauung is summed up in this sentence near the end of his article: “Labor is a commodity.”
To borrow a line from Soylent Green, “This commodity is people! PEOPLE!!!”
Our society has basically 2 main components: the civil and the economic. There must be a balance of these two for satisfactory life. The market absolutists almost totally ignore the former. This is why they are so happy to look at China, which is making great strides in the latter but still has a very repressive political system. When the economic conditions are such to cause a huge slice of the populace to be miserable, the balancing force of civil remedies (such as minimum wage) take effect.
I’m pretty sure Will is opposed to worker’s unions as well, which is seemingly incongruent with his treatment of labor as commodity. The entire point of unions is to change the condition of that commodity. Presumably Will wouldn’t object to someone trying to raise the price of pork bellies by cornering the market and changing the supply: that’s part of the nature of commodity trading. But try to do the same thing with this “commodity” of workers, by changing the condition under which the labor is offered, is anathema to all capitalism.
But of course guys like Will and Nardelli don’t really care about consistency or civil life: they want that second yacht and the goddam uppity serfs had best get cracking!
How many Home Depot employees will see an increase in pay if MW increases to $7.25/hr?
One would have thought it obvious, JWG, but not everybody works at Home Depot.
“5) Where is the money going to come from to increase the wages of workers (mostly part-timers) who are making MW? In other words, what will these employers have to do in order to meet an increased payroll?”
Study after study has shown cost-of-living increases in the minimum wage have no detrimental effect on inflation or employment, yet right wingers keep trotting this argument out whenever the subject comes up.
As Madame DeFarge suggests, minimum wage workers spend their extra bucks in their home towns, and the economy grows. People like Nardelli send their millions overseas for new Ferraris or chalets in Gstaad. Italy and Switzerland get rich and the income gap here widens precariously.
Trust the market, he says, and wages will be set to a decent level. Of course, that’s what got us here in the first place.
I wonder if that statement would have been tinged with sarcasm from 1992 – 2000?
4) How do you justify keeping a worker who makes double the current MW (because they’ve worked hard and earned raises) at their current wage while Joe Smoe, who just started working at the same place, gets a raise for just being alive?
JWG will tell you that this about fairness but it’s really divide and conquer. Pit one worker against another the company wins, which is exactly what unions were ostensibly formed to combat. Rheinhard lays it out nicely.
What is being opposed here is not the minimum wage so mcuh as the right of laborers to make demands on employers based upon their own value.
Industries and companies have the resources to lobby Congress and get laws enacted to protect their own interests and to advance those interests and as far as I know, George Will doesn’t have a problem with that. Vote for a Democrat because a rise in the minimum is tied to a raise in your union contract and somehow as Rheinhard said, it’s “anathema to all capitalism.”
On principle, a person is not going to work for 40 hours at a wage that will not sustain them within an economy that is at full employment (which our current unemployment rate is defined as). No one is forcing a person to work at their chosen place of employment.
Who is going to benefit from a rise in MW? (besides union labor tied to MW and cost of living adjustments)?
http://www.bls.gov/cps/minwage2005tbls.htm
Well (not counting workers who earn tips):
- over 70% are part time workers
- over 59% are younger than 25
I’m going to assume these are not the workers you’re concerned about, but I will note they make up the majority of MW earners.
So let’s focus on the people who are earning MW and who are more arguably trying to live on those earnings:
- less than 25% of MW earners are older than 25 and not living with a spouse
- that’s less than 1% of ALL hourly wage earners
- that’s 533,000 people
Now obviosly we’re talking about more than that since the data doesn’t include workers between $5.15 and $7.25. But it should be clear that raising the MW will have a huge impact on teenagers and anyone with a union contract tied to MW laws compared to actual MW earners fighting poverty.
Care to guess who’s doing the most pushing? I’m betting against those well-known and feared teen labor organizations.
May I ask what is problem with a wage gap?
If I’m spray painting Escalades for $14 or $15 an hour, what do I care about a CEO making a gazillion dollars?
Back in the so – called “Golden Age of Capitalism” there were billionaires like Gould, Fiske, Mellon and Carnegie.
Their social effect was mostly positive.
Most people today would worship the ground Bill Gates walks on, if it weren’t for Windows 98, and the BSOD
=;-}
Their social effect was not positive until they got old and started giving away their money. The minimum wage helps those at the bottom and ripples up. I’ve got no problem with people making a buttload of money, I just don’t think it’s right when CEO pay is in the stratosphere but those people who make the corporation go don’t get to see increased benefits either.
I was replying to your comment about the Home Depot CEO’s salary funding MW workers. It was a worthless argument.
I thought we’re talking about the few MW earners who can’t sustain themselves. They’re not going to be spending the extra money on the products of their employers who are the ones already losing money on increased wages. Those specific companies must either 1) reduce labor costs (reduced wages for others, fewer raises, or firings) and/or 2) increase prices. This must be done not because of market forces but because of government forces.
No. A federal MW hike is the government telling employers what the value of labor must be. Would you argue that a government mandated price cap is actually the right of consumers to make demands on the worth of products? I hope not.
I find it interesting that you’d say this when the argument about high CEO salaries is repeatedly used in comparison to low wage earners.
Really? How many companies are paying huge CEO salaries with minimum wage workers?
Really? How many companies are paying huge CEO salaries with minimum wage workers?
*looks around* My god, All the WalMarts and Gas Stations in the world have Disappeared!
“A federal MW hike is the government telling employers what the value of labor must be. ”
I’m sure that’s what it looks like when you deliberately forget that 80 percent of the population suports a raise. The people are demanding that their labor be valued and the Democrats are responding to that demand.
Again, somehow or other it’s all in the interest of capatlism for businesses to lobby for legislation that undermines the right to organize and strike, but when 80 percent of the people in this country support a minimum wage it’s egregious government interference in the free market.
And JWG, I never said that fairness should not be a factor in this, I said that what you would describe as fairness is, in actuality, nothing of the kind.
The problem here is people keep bringing up big companies such as Walmart, Home Depot, etc. That is a complete non-issue. Most places such as that are already paying in the vicinity of what min wage increase will be (Contrary to what Rex says, Walmart employees are paid higher than minimum wage) so there will be no impact there either way.
It does affect however, small business owners. The kind of small retail and service shops that maintain a staff of less than 25 people. People who own such stores have a very small margin for profit. If they are suddenly forced to have to pay 10 people 2 dollars more an hour per day, it comes out to quite a bit of money for a business that size. It is especially trying on new startups. It is why minimum wage laws should be kept at a state level. Not all states are the same. It is easier for the cost to be absorbed in California than it is in Mississippi.
WalMart pays above the proposed federal MW hike. I don’t know about most gas stations, but the ones in Southern Indiana also start out above $7.25.
Like Oliver, you aren’t basing your argument on actual reality.
Because they don’t know much about economics, and they also believe like the leftists around here that big corporations are not paying their employees “fair” wages, when the reality is that big corporations can absorb higher employee costs and already pay above MW.
Karl Marx loves you.
I’m wondering why 80% of the population is so enthusiastic about raising the value of teenaged part time work. Maybe because people don’t know the actual facts?
Media? Hello?
“Karl Marx loves you.”
Wow. Just wow. People should be paid fairly and have the right, through whatever means, to demand the pay they think they deserve. That to you is heresy.
I’m glad to know that you think every union worker who does indeed have their salary based on the minimum wage has no idea where their economic interest lies in this debate because are they are just ill-informed.
I’m sure they would love to know that their economic interest lies in actually dismantling what little is left of their union, demolishing the income floor beneath them and leaving their fates to the self-interest of fat cat CEOs with one too few summer homes.
“Through whatever means”?
You want the government to determine the value of labor in the private sector.
You tell me what political/economic theory is supported by that belief.
Please define “fair” in terms of economics. Additionally, why do you think $7.25 is “fair”? Can people survive on that?
So let’s not pretend that this is about helping the 1% of hourly wage earners, but is IN FACT about increasing union wages (which accounts for many many times more hourly wage earners).
You want the government to determine the value of labor in the private sector.
You tell me what political/economic theory is supported by that belief.
The theory of “government by the people, for the people”?
The Founding Fathers supported government wage controls? Wow, your historic and economic insight is astounding!
No, they supported a system where the people would vote in representatives who would act in accord with their wishes.
Since the people elected more Democrats this time, they get to do what they want, which includes raising the minimum wage. If the people hadn’t wanted that, they shouldn’t have voted for Democrats.
Oh, and by the way: that phrase is from Lincoln, not the Founding Fathers. Since you’re into historical insight and all.
Hmmm. In northeast Mass., Home Depot has adopted a policy of detaining Spanish-speaking customers who sign credit cards and then mistakenly pocket the pen. They detain them for shoplifting the pen, then ask them to pay about $600 or face arrest.
Also last May their board of directors failed to show up for their corporation’s annual meeting. This is unprecedented (or almost so) in the history of public companies, and a gross dereliction of duty. It was surprising that the NYSE didn’t summarily delist their stock for that offense.
I guess they gotta fund the payout to their rapacious CEO Nardelli somehow.
“You want the government to determine the value of labor in the private sector.”
No. I am simply saying that the government may be the only mechanism that people have of making their own demands.
You keep forgetting the other side of the equation.
If business and industry had no access to the levers of power to advance their own interests you might have a case.
But they do and I don’t see you complaining that business lobbying to preferential treatment whethers it taxes, trade, regulation etc. is anti-thetical to free choice and a free market.
The labor movement in this country has suffered under any number of self-inflicted wounds but its decline has also been readily helped along by a conservative/industry movement that has used the power of the government to undermine and weaken the right to organize and strike in this country.
Just as businesses have done everything in their power to reduce the collective voice of labor in this country, you are now saying that workers don’t even have the right to demand that their elected officials speak on their behalf.
And JWG, it’s always been about everyone who is effected by the minimum wage. So let’s not pretend that you didn’t just call 80 percent of America ignorant.
I agree with everything you said, but you misused the word “pariah.”
If raising the MW is such a dandy idea, let’s raise it to $100/hr.
That would make all of us RICH!
I’m counting that extra money already.
I would like to welcome John Stossel to the comments section, in the body of “sinner”, who identifies himself with a line that he has used ad nauseum about minimum wage on talk shows to inflame debate to the point that no sensible discussion can carry on and he gets to be smug about how very very right he is, conscioiusly ignoring the historic trend of minimum wage meeting roughly in ratio to the increases in average cost of living, scholar that he is.
I would like to offer a counter argument then, Mr. Stossel, if a low minimum wage is such a wonderusly orgasmically fantabulastical thing, then what possible harm could come from assigning it an equally arbitrary negative amount. If we make the minimum wage -$100/hour, surely we wouldnt have (as we once did) major labor and employment providers colluding to low-ball market expectations for what labor is actually worth, and have people be comparatively ecstatically happy to only have to pay their bosses $20/hour that they work. This being the logical conclusion of your wonderfully logical argument, surely you’ll agree that the massive influx to unemployment and welfare that would accompany such a move would be marvelous indeed, dont you agree?
Or maybe you should just shut up until you can actively stop being such an idiot.
Trust the market, he says, and wages will be set to a decent level.
Actually, Will doesn’t say this, and I think it’s for a reason: he’d argue, along with libertarians, that wages will be what the market will bear. If they’re decent, fine with him; if not, also fine with him. It’s the principle of the matter.
For those making a pragmatic argument against the minimum wage, I think it’s reasonable to expect some better alternative for a social safety net.
It has been mentioned on the internts that the minimum wage should be some negative number. Surely workers would want to pay their employers for the priviledge of working in Will’s dream world.
By the way, Will seems to embrace the role that immigrants are playing in holding down labor wages. These elites like Will never seem to get enough flesh off the backs of those laboring at the other end of the scale.
Hey, didn’t we try that minimum wage of $0 already? Wasn’t it called “slavery” or something of the sort?
I know the phrase. The governmental concepts behind the phrase were designed and implemented by the Founding Fathers. And you’re right that the people can elect representatives to enact Marxist economic policies. But let’s not be afraid to call them what they are.
Ah, commies, pinkos, and fellow travelers. Someone is stuck in the past with John Birch people. Before retiring for the night, you best check for commies under the bed.
What we have in American is socialism for corporations: Tax breaks, R&D subsidies, outright payments, farm subsidies to wealthy farm corporations, accepted monopolies. Yes, if you’re one of the elite, just drop a bundle on your Republican congress person and Voila! the government is in your back pocket. One could call it National Socialism and not be too inaccurate.
Why don’t you review the General Welfare clause?
Article I, Section 8: “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States.”
1. JWG: a minimum wage increase so modest that it barely keeps up with inflation is Keynsian, not Marxist. Sticking Nardelli’s head on a pole and nationalizing his Ferraris – that would be Marxist.
2. Sinner: Next time your doctor tells you to take a Zoloft, go ahead and take the whole bottle. If one is good for you the whole bottle will surely be super-good!
3. JWG: if I had said that the interest on Nardelli’s bonuses could buy five pigs per year for every Bangladeshi, would you have replied that Bangladeshis don’t eat pork?
4. Any wingnut: if employers have to offset minimum wage increases with higher prices or staff reductions, how do those same employers fund balloning executive compensation without higher prices or staff reductions?
And I oppose them with as much ferver as I do wage controls.
You have got to be kidding me. Again, who argued for government controls for wages when the Constitution was being debated?
Since Home Depot is paying his salary, whose employees could be potentially recompensated by his mythical salary reduction?
Again, point me to one of these employers with “ballooning executive compensation” who are paying minimum wage.
BTW, there are examples of executives getting raises while laying off (non minumum wage) employees.
The companies who are going to be hurt by a MW hike are the small businesses run by local business people — not the mega companies with CEOs who aren’t paying MW anyway.
If “nobody” actually makes the minimum wage (as some have suggested here) why all the fuss over raising it?
Dear Wingnuts:
Unfortunately for you, we already tried the libertarian paradise-It was called the Gilded Age. It predictably produced a handful of ultra wealthy individuals such as Rockefeller, J. P. Morgan, etc., and a vast number of desperately poor workers. But if that is what you want to sell to the American public, I say go for it!
Thank you, CDWard, I was trying to ignore Frank’s unbelievably inane statement above about “The social effect [of unfettered captialism] was mostly positive”. Now I can do so with a clear conscience.
JWG: I was not suggesting that Nardelli’s bonuses be divided up among home depot workers, I was trying to illustrate the whopping imbalance between Nardelli’s gargantuan compensation and the relatively small increase in minimum wage.
I could have made the same point by leaving minimum wage out of it and bringing the home depot workers in: The interest on Nardelli’s payoff could provide a $2 increase in the hourly wages of 500 Home Depot employees in perpetuity. Still think its pointless? I doubt many Home Depot workers would. That’s $80 a week, $320 a month, $3840 dollars a year.
You are also missing the point of my question about ballooning compensation, inflation and unemployment (though answers to *your* question might include Exxon, McDonalds, etc.). Regardless of what a corporation pays its workers, it has to finance its mammoth white-collar compensation packages either by raising prices or decreasing costs (i.e., usually, firing people). Especially if, as has often been the case recently, the growth of these packages have a positive correlation with decreased corporate profits.
My question was: why are rightwingers so concerned about the inflation/employment pressure of minimum wage changes, and so unconcerned about this other sort of inflation/employment pressure?
I’ve answered this multiple times.
Small business owners will be hurt (rather than the mega corporations everyone keeps erroneously bringing up).
Additionally, this is actually a government mandated backdoor payraise for union employees whose contracts are tied to the MW, rather than the lies about helping people who are “making significantly less money than they require in order to sustain themselves” (as has been repeatedly mentioned).
What does one have to do with the other? Why can’t a company who is already paying its employees well above the MW also pay its CEO a gross amount of money? Why do you feel that you have the ability to determine Nardelli’s value to Home Depot?
Because it’s the company’s decision how many people it wants to have on the payroll and how much it values the work of those employees. I don’t want the government making those decisions.
As long as we’re not talking about government involvement, I’m happy to discuss the business decisions (good and bad, “fair” and obscene) all day long. But again, I am only “concerned” right now about the calls for government control of those decisions.
Something George Will and other Religious Capitalists overlook is the fact that we don’t have a genuine “free market” system in America. We have a market that is rigged in favor of capital over labor ala corporations’ undue influence over public policy.
In a more balanced representative system – where both capital and labor interests were treated equally in the halls of Congress -Will et al. might have a point. But, until such time that corporations cease trying to gain unfair advantage, things such as the minimum wage are necessary to prevent the scales from completely tipping in favor of capital.
Time and time again, the greed and myopia of corporate leaders beg to be regulated. Like children, corporations demonstrate that they cannot be trusted to be honest and play fair on their own. They require negative incentives (read: threats of penalties and punishments) to even begin to think about broader issues other than the bottom line.
Again (since no one has answered it), please provide an ACTUAL corporation that is paying its employees LESS than the proposed MW hike.
It predictably produced a handful of ultra wealthy individuals such as Rockefeller, J. P. Morgan, etc., and a vast number of desperately poor workers.
Prove it.
Prove there were a vast number of desperately poor workers.
If that $154.3 million was spread among the 355,000 employees, that’s $434.65 or 21.7 cents an hour (assuming full-time). Seems like a better way to spend money to me.
Raising the minimum wage gives poor people more money, which they spend.
This George Will crap is like the argument for allowing smoking in restaurants. It turns out that business actually IMPROVES when you ban smoking.
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