Wednesday, August 21, 2013

It's about total compensation

Today it's a three-fer, since each story is about the same thing: the consequences of low U.S. wages and the absence of benefits.

First, my man Harold Meyerson notes that low wages paid by big retailers and fast-food joints are now hurting big retailers and fast-food joints, because low-paid workers don't have money to buy stuff.  (Duh).  Furthermore, Meyerson makes the interesting observation that we've gone back to the pre-WWII era, before big retailers like Federated and Macy's actively backed New Deal-era reforms like the minimum wage, unemployment insurance, 5-day workweek, unions, and co-op banks. Back then, businessmen understood that a healthy middle class was in their own best interest. 

It seems we've forgotten, once again, what actually makes America go. (I blame this all on the historically amnesiac Tea Parties, who don't care about anything that happened in America between 1789 and 1980.)

Next, Heidi Moore reminds us that our recent focus on the minimum wage, while correct, actually obscures the key issue: total compensation.  Wages could theoretically stay flat, but if more employers were to offer health insurance, paid sick leave, vacation and a retirement plan, then wages wouldn't need to be as high.    

Moore also observes that low total compensation, historically speaking, has put a record-high strain on government poverty programs such as food stamps. So, with corporate profits at an all-time high and compensation at an all-time low, welfare becomes a subsidy for Big Business.  (Wal-Mart has long been the national poster child for forcing its employees to go on welfare).

Finally, Sarah Kendzior points out that the feminist debate over whether women should work or stay at home is all rather quaint, considering that women, just like everybody else, make such decisions based on hard economic realities. Paradoxically, due to the high cost of child care, it is often cheaper for a woman to stay at home rather than work; yet staying at home allows her skills to degrade, or at the very least carries a stigma with potential employers when she tries to re-enter the workforce. Educated, qualified women excluded from our workforce reduces our nation's overall productivity. 

So once again, the answer is for Big Government to step in and mandate paternity leave, provide free or subsidized daycare, and make giving birth at a hospital cheaper, so that young families don't start off in debt.  Because the free market has failed to address these failures.


By Harold Meyerson
August 21, 2013 | Washington Post

By Heidi Moore
August 20, 2013 | Guardian

By Sarah Kendzior
August 19, 2013 | Al Jazeera

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