America is not a poor country. Nor is Massachusetts a poor state.
Rather, when we are surrounded by our friends and neighbors who are barely keeping their heads above water, it creates the illusion of scarcity. It is just that, an illusion. The reality is that we actually live in one of the wealthiest, abundant countries in world history. The belief in this reality is one of the most fundamental premises of the Bernie Sanders revolution—that the rich are becoming richer, and the middleclass is joining the ranks of the poor in a period of unprecedented superabundance.
Central to this Sanders revolution is the belief that income inequality is the great moral issue of our time, the great economic issue of our time, and the great political issue of our time. It started as the “Occupy Wall Street” movement with radicals, and has blossomed into the great progressive cause with thousands of everyday folks congregating in streets and arenas, for which Bernie Sanders is the Messianic leader. Recently, Senator Elizabeth Warren spoke on this issue while at the Massachusetts State Convention.
Seldom does Bernie start a campaign speech without pointing out that today in America, the top 1/10 of the top 1% of the population has as much wealth as the bottom 90%; or that the top 20 people in our country own more wealth than the bottom 150 million Americans, almost ½ of our population; or that despite having the most productive workers in the world, our wages have gone flat while almost all new economic growth is siphoned off by the wealthiest.
Del Gallo has been to four Sanders rallies. When Bernie Sanders says, “The Walton Family of Wal-Mart, worth $ 149 billion, has more wealth than the bottom 40% of Americans” there is a resounding boo from the audience. Wal-Mart pay workers wages so low, that the American taxpayers have to pay for food stamps and Medicaid. The middleclass is subsiding employees of wealthy family. A $15 minimum wage would help bridge this gap. It would also take the Walton’s off of welfare, so that Wal-Mart’s employees do not have to rely on the government for their basic sustenance.
Low wages have contributed to another phenomenon. The 40 hour work week, once the centerpiece of the labor movement with a rich history, is disappearing because people cannot live on 40 hours pay. Ninety years ago, those that worked in Ford’s automobile plant had their hours reduced to 40 hours per week. Henry Ford said at the time: “It is high time to rid ourselves of the notion that leisure for workmen is either ‘lost time’ or a class privilege.” We are moving backwards. As Rinaldo Del Gallo talked to people across the district, he met people that worked two, sometimes three jobs. Not only does this result in an increased degradation in the quality of life reducing time for family bonding, sleep, leisure and exercise, it creates another ancillary phenomena: increased joblessness as these workers working multiple jobs take jobs from jobless people trying to enter the workforce.
Those who watch politics closely know that even many Democrats don’t support a $15 minimum wage. For instance, in the national race for president, Hillary Clinton has advocated a $15 minimum wage, but qualifies that with a statement that the legislation should be passed locally, in larger cities. She actually supports a national $12 minimum wage.
Many favor raising the minimum wage only on big box stores over for companies with over 200 employees, leaving those working for small businesses or municipal government working for less than subsistence wages. Del Gallo believes in providing everyone with a minimum wage, not those that work for large employers.
It is important to listen carefully to what potential candidates say about the minimum wage, and how often they mention it as part of their core values.
Bernie Sanders has said:
“Not too long ago, the establishment told us that a $15 minimum wage was unrealistic. Some thought it was ‘pie-in-the-sky.’ But a grassroots movement led by millions of working people refused to take ‘no’ for an answer. Loudly and clearly workers said, ‘Yes we can increase the minimum wage, not just to $10.10 an hour, not just to $12 an hour, but to a living wage of $15 an hour.”
Like Bernie Sanders, Rinaldo Del Gallo favors a $15 minimum wage. As a state senator, Del Gallo favors a statewide, across-the-board (with few exceptions), immediate raising of the minimum wage to $15 per hour. The exceptions would be for groups such as babysitters under 18 years of age, teenage camp counselors, or family members in family owned businesses. It is not commonly known that today, in Massachusetts, municipal employees are not even subject to the minimum wage. We have too many exceptions. Every adult that works to survive should have a job that pays to survive.
The minimum wage should be a living wage. Nationally, the minimum wage is $7.25 an hour. The Bay State, hiked its minimum wage from $8 to $9 at the start of 2015. It went to $10 per hour on the first day of 2016. The Massachusetts minimum wage is scheduled to go to $11 an hour in 2017.
But $11 and hour is not enough to survive on, and leaves in place a rigged economy where fat cats like Wal-Mart accumulate even more wealth and the worker is left the crumbs. We need to show the courage to raise the minimum wage.
THE MORAL CASE
There is a moral case to be made for a $15 minimum wage, such as the one advanced by Robert Reich:
Across America, workers at fast-food and big-box retail establishments are striking for $15. Some cities are already moving toward this goal. Bernie Sanders is advocating it. A national movement is growing for a $15 an hour minimum.
Economists are nervous. Krueger says a $15 an hour minimum would “put us in uncharted waters, and risk undesirable and unintended consequences” of job loss.
Maybe some jobs are worth risking if a strong moral case can be made for a $15 minimum. That moral case is that no one should be working full time and still remain in poverty. People who work full time are fulfilling their most basic social responsibility. As such, they should earn enough to live on.
A full-time worker with two kids needs at least $30,135 this year to be safely out of poverty. That’s $15 an hour for a forty-hour workweek.
Any amount below this usually requires government make up the shortfall – using tax payments from the rest of us to finance food stamps, Medicaid, housing assistance, and other kinds of help.
The history of a high minimum wage.
Most people do not know that in 1949, Harry Truman was able to get Congress to double the minimum wage despite decades of resistance.
Anybody with a modicum of knowledge about American economic history knows that the 1950’s was one of the most prosperous decades in the American experience. Doubling the minimum wage obviously did not hurt, and a cogent argument could be made that it helped. In fact, shortly after doubling the minimum wage in 1949, America experienced a historical low in unemployment.
In fact, the New Republic published an article in 2014 and observed that the 13 states that increased the minimum wage had higher rates of job growth than those that did not. Australia has a minimum wage of $16.88 an hour (Australian dollars), has an economy stronger than ours, and has not experience a recession in 20 years. (In American dollars, $16.88 Australian dollars is about $14.81 in US Dollars.)
Today, California was the first state to have enacted a state-wide $15 minimum wage.
New York soon followed.
FeelTheBern.org, a website that advances the Bernie Sanders campaign makes the following points regarding the $15 minimum wage:
Will increasing the minimum wage lead to fewer jobs?
Moreover, Bernie’s home state of Vermont, along with other states that recently raised the minimum wage, seem to be doing just fine. In 2014, the states that raised their minimum wages experienced more job growth than states that didn’t.
Job loss is mitigated on two fronts when raising the minimum wage:
- If you put money in the hands of low-income people, they spend it.
- Increased wages means some minimum-wage earners who are working two to three jobs to make ends meet can reduce hours, thereby opening up employment opportunities for those that have no job.
Won’t increasing the minimum wage harm small businesses?
Many conservatives claim that this is the case, but the evidence does not support it. Seattle, one of the cities to more recently raise the minimum wage to $15, has seen large increases in employment and income. According to MyNorthwest.com, not only have many of the businesses who opposed the increase seen higher employment numbers, some are even opening additional locations. In 2014, a study by the Center for Economic and Policy Research found that the 13 states that increased the minimum wage saw employment numbers increase faster than states that did not, an average of 0.85 percent compared to 0.61 percent in the other 37 states.
Several studies over the last 15 years have shown that increasing the minimum wage lowers employee turnover. CostCo saw just 17 percent overall turnover (compared to the industry average, which was around 44 percent), and only six percent after one year, as well as a massive decrease in employee theft in 2005. In 2003, the San Francisco Airport raised the minimum wage of employees to $10/hr and saw an 80 percent decrease in turnover among airport security screeners, a 44 percent drop among cabin cleaners, and 25 percent drop among ramp workers. The reduction in turnover saved companies $6.6 million. In 2004, San Francisco saw an average increase in length of employment of 3.5 months, and saw six percent of workers move from part-time to full-time.
The $15/hour minimum wage in historical context
According to post on the Senate Budget Committee’s blog, signed by 210 professional economists said:
We, the undersigned professional economists, favor an increase in the federal minimum wage to $15 an hour as of 2020. The federal minimum wage is presently $7.25, and was most recently increased in 2009. We also support intermediate increases over the current federal minimum between now and 2020, such as a first-step raise to $10.50 an hour as of 2016.
The real, inflation-adjusted, value of the federal minimum wage has fallen dramatically over time. The real value of the federal minimum wage peaked in 1968 at 10.85 an hour, 50 percent above the current level. Moreover, since 1968, average U.S. labor productivity has risen by roughly 140 percent. This means that, if the federal minimum wage had risen in step with both inflation and average labor productivity since 1968, the federal minimum wage today would be $26.00 an hour.
Del Gallo favors raising the minimum wage in Massachusetts to $15, immediately, across the board, and with few exceptions.