Saturday, February 25, 2012

The Sudden Death of the Living Wage: Republican Class Warfare 2/3

by Nomad
In Part One of this series we introduced you to the concept of the Living Wage, which is entirely different from the Minimum Wage. Next we will look at conservative's arguments against the idea and the true and somewhat surprising history of the living wage.

A Threat to Health
The Republican party has had a long-held opposition toward any talk of a living wage. This latest crop has their own ideas about how to deal with the poor. Rick Santorum, for example, seems to think that marriage is the solution to poverty.
What two things, that if you do, will guarantee that you will not be in poverty in America?” he asked the crowd. “Number one, graduate from high school. Number two, get married. Before you have children,” he said. “If you do those two things, you will be successful economically. 
Michele Bachmann, who recently claimed she had been the “perfect’ candidate for president, had announced her intention to do away with any sort of minimum wage limit in order to stimulate the economy. Newt Gingrich called child labor laws “stupid” and Herman Cain told unemployed OWS protesters that
“ If you don't have a job and you're not rich, blame yourself ... It is not a person's fault if they succeeded, it is a person's fault if they failed."
This attitude is fairly common with Fox-News-watching public. Reagan played that mish-mash of religion, patriotism and the much-touted work ethic very convincingly. The logical runs like this:
America is the land of opportunity. 
We, as a nation, are blessed by God. 
Wealth and success is a sign of God's blessing. 
Every man's success and failure depends on the his individual attributes. 
Therefore, government has no responsibility in the matter.
It is linked with the delusion that that the United States of America is a meritocracy where everyone is treated fairly and anyone can pull himself up by his bootstraps if he or she just works hard enough, pays their dues and keeps their nose to the grindstone.

The "Threat" of Living Wage
The only problem is that for millions of Americans, it just not true. The living wage, the Republicans generally say, is a denial of one of the fundamentals of the American economy, namely, the free market principle approach to labor, hiring and wages. This view is expressed by Steven Malanga, a Manhattan Institute senior fellow.
The living wage poses a big threat to their economic health, because the costs and restrictions it imposes on the private sector will destroy jobs—especially low-wage jobs—and send businesses fleeing to other locales. Worse still, the living-wage movement’s agenda doesn’t end with forcing private employers to increase wages. It includes opposing privatization schemes, strong-arming companies into unionizing, and other economic policies equally harmful to urban health.
Incidentally, The Manhattan Institute, founded in 1978 by William J. Casey, who later became President Ronald Reagan's CIA director, is by no means the impartial think-tank it pretends to be. Wikipedia has this to say:
The Manhattan Institute received $19,470,416 in grants from 1985–2005, from foundations such as the Koch Family Foundations, the John M. Olin Foundation, Inc., the Lynde and Harry Bradley Foundation, the Scaife Foundations, and the Smith Richardson Foundation. The Manhattan Institute does not disclose its corporate funding, but the Capital Research Center listed its contributors as Bristol-Myers Squibb, Exxon Mobil, Chase Manhattan, CIGNA, Sprint, Reliant Energy, Lincoln Financial Group Foundation, and Merrill Lynch.
So much for its understanding about poverty and the needs of low-income Americans. And Sourcewatch adds some icing to the cake with this:
"The Manhattan Institute concerns itself with such things as 'welfare reform' (dismantling social programs), 'faith-based initiatives' (blurring the distinction between church and state), and 'education reform' (destroying public education)," Kurt Nimmo wrote October 10, 2002, in CounterPunch.
According to Malanga, the free market principles in which the wages are set by the employer and not by any kind of government regulation is the only solution.
(I)f living-wage advocates truly understood the free market, they’d know that it ultimately is far more moral than the centrally controlled economic system they endorse. If there is one thing that the last 50 years tell us, it is that the free market provides far greater economic opportunity and a decent standard of living for far more people than government-controlled markets.
And yet, that’s not what has actually happened at all. The free market approach to wages has encouraged a race to the bottom in living standards, pitting non-unionized dirt-cheap labor in developing nations against a highly productive but wage-protected labor in the US and Europe. 
In fact, if this graph is anything to go by, the poverty levels in America didn’t begin to climb until after the conservative Republicans began their much-celebrated exercise in free market principles.
Starting from the 1980s and continuing through to the last Republican administration, the poverty rates have climbed and remained high. The free-market solution was no solution at all, as far as the poor were concerned.

According to Richard Caputo, writing in the Journal of Sociology and Social Welfare, the Reagan years resulted in a higher percentage of both individual and family poverty. Forty percent of the nation’s personal net worth was possessed by 2.4 million people out of a population of 240 million. And look how that trend has been allowed to continue. 
And yet according to the Malanga , the opposite is true.
What was remarkable about the American economy during the 1990s, when about 13 million low-skilled, low-wage immigrants arrived, is that poverty rates didn’t soar, and actually declined slightly—showing the muscularity of our economy in lifting even many of these newcomers out of poverty.
This kind of spurious arguing shouldn’t surprise anybody. As we have seen in earlier reports, misrepresenting the Reagan years (and the years since) is practically an art with the conservatives. Like the “trickle-down” theory, the real life experiment failed to live up to promise. No matter, the conservatives said, we will repeat the miracle story over and over until it becomes accepted as fact. To paraphrase Reagan, the trouble with our conservative friends is not that they're ignorant; it's just that they know so much that isn't true. 

In a typical effort to misrepresent the living wage movement, Malanga resorts to the usual disinformation campaign found in most ALEC-friendly right wing organizations. 
Providing the intellectual muscle (such as it is) for the living-wage movement is a small group of Marxoid economists, led by University of Massachusetts–Amherst professor Robert Pollin, a longtime board member of the Union of Radical Political Economists, founded in the 1960s to bring Marxist economics to American universities.
As a matter of fact, the Far Right is now engaging in the same methods of academic deception that it accuses the opposition of. Utilizing a myriad of university studies financed by powerful corporate interests or dubious polls from organizations created solely for the purpose of muddying the debate, conservatives have continued to repeat the same dogma year after year. 

Challenging the Minimum Wage Dogma
Whether true or not, in the long or in the short term, for most members of the Far Right, minimum wage limits have a negative effect on the economy. End of discussion.
However, some dared to question that line.
The tenor of this debate began to change in the mid-1990's following some work done by two Princeton economists, David Card (now at the University of California, Berkeley) and Alan B. Krueger. In 1992, New Jersey increased the state minimum wage to $5.05 an hour (applicable to both the public and the private sectors), which gave the two young professors an opportunity to study the comparative effects of that raise on fast-food restaurants and low-wage employment in New Jersey and Pennsylvania, where the minimum wage remained at the federal level of $4.25 an hour. Card and Krueger agreed that the hypothesis that a rise in wages would destroy jobs was "one of the clearest and most widely appreciated in the field of economics."

Both told me they believed, at the start, that their work would reinforce that hypothesis. But in 1995, and again in 2000, the two academics effectively shredded the conventional wisdom. Their data demonstrated that a modest increase in wages did not appear to cause any significant harm to employment; in some cases, a rise in the minimum wage even resulted in a slight increase in employment.
The staunchest Conservatives, like the people of the Manhattan Institute, would like to portray the living wage movement as some kind of New Left socialist / anarchist /Marxist concept that spilled out of the turmoil of civil rights movement. According to Far Right sources, the movement began in 1994, as some kind of attempt to corrupt the "miracle" of Reaganomics, plotted by liberal professors and un-American leftists, those dreaded hangovers from the civil rights era. 
In fact, its philosophical roots go back much further. Nearly a hundred years before, to be precise and is not a new thing at all

Of New and Not So New Things
One of the seminal works on the subject of fair wages came not from the civil right movements of the mid- 20th century but from much earlier. On May 15, 1891, Pope Leo XIII issued an open letter, passed to all his bishops, that addressed the conditions of the working classes and of the poor. It was called Rerum Novarum (Latin for Of New Things).

It is, in fact, a remarkable document, and which elevated the Church from the promotion of a single faith to an ethical code for the advocacy of world social justice. This original papal document would be the source for a series of other social teachings by later popes, all of which related to the morality of fair treatment for the poor.

In the declaration, poverty in itself, Pope Leo explained, is no disgrace. It was unavoidable and part of the human condition. In an effort to maintain social harmony between the classes, he advised workers of the world that damaging or stealing of property of their employers was unacceptable. Had he stopped there, his message would have been nothing more than a carte blanche for exploitation. As one source explains:
But there was something else that concerned him very much: the material well-being of the working poor. He told them in no uncertain terms that they should receive what will enable them to be housed, clothed, secure, and to live without hardship. He made it clear that they were not to accept unjust treatment as though it were inevitable, and that they were to stand up for their rights at the same time that they helped to preserve good order in society. Protect your own interests, but refrain from violence and never riot ; your demands should be reasonable ; press your claims with reason ; form unions but do not strike. The message about preserving good order is clear and unmistakable, but so is the message about standing up for rights.

Leo XIII wanted the working poor to protect their interests, to make demands, to press their claims, and the principal means for doing this was the formation of unions. In their efforts to claim their rights, the working poor should find in the government an ally, and Leo made it clear that the working poor should be given special consideration by the government.
He also spoke directly to employers.
For Leo, employers have clear moral obligations: workers are not to be treated as slaves; the dignity of your workers' human personality must be respected; do not use people as things for gain; do not oppress the needy and wretched for your own profit. The approach to employers is on a high moral plane, but it is also very practical: you need your poor worker, so work with him harmoniously. It is immoral to treat workers unjustly, and it is also not in the best interest of ownership and management.
It was not a call for communism nor socialist but for an ethical re-examination of a capitalist system. According to the Pope, it was a government’s obligation to take a role in protecting workers’ rights and in keeping the peace. Fair wages are defined in Rerum Novarum as at least a living wage, but Leo recommended paying more than that: enough to support the worker, his wife and family, with a little savings left over so that the worker can improve his condition over time.

To a Right Wing conservative, that statement (for Newt and Rick it's an infallible source, by the way) is tantamount to heresy. It's hard to reconcile the statements made by the candidates- who have professed to be Catholic when it comes to abortion and homosexuality- with the official position of the Church on the poor. Why, you can ask, would the GOP be waging a war on religion?

In any case, the Pope’s letter would later have a profound effect on a leading moral theologian, priest, professor, author, and social justice advocate, Monsignor John Augustine Ryan. In 1906, published the book, A Living Wage.
While at St. Paul Seminary in 1894, Ryan read Pope Leo XIII’s Rerum Novarum and it was to form the basis for Ryan’s socio-economic views. As he saw it, the separation of economic thought from religious and ethical rules were the cause of social injustice brought about by the industrial revolution. The failure of employers to pay a sufficient wage would, in his eyes, inevitably damage the fabric of all society.
The living wage movement was not confined to the religious sphere. Around the turn of the last century, the fascinating English husband and wife reformers, Martha Beatrice Webb and Sidney James Webb wrote a good deal about the necessity of social and economic reform. They advocated the idea that the State should enforce a national minimum of wages which would provide the laborer with "the food, clothing and shelter physiologically necessary, according to national habit and custom, to prevent bodily deterioration."

They considered the industries that took more than they gave back to be little better than parasites on the community. The Modern Conservative has declared it is the poor who are the parasites. And, apparently their only solution to poverty is blame the victims, to remove their government safety nets and to force them to have more babies they cannot afford. All in the name of their professed morality.

In 1919 The Federal Council of Churches of Christ in America drafted a program of social reconstruction back which included in its demands “a Living Wage enforced by the State,” and “declared that “this Living Wage should be made the first charge upon industry, before dividends are considered."

Secular Support for the Living Wage

Finally, perhaps a more unexpected proponent of the Living Wage concept, was none of than the arch-capitalist Henry Ford. On Jan. 5, 1914, Henry Ford, head of the Ford Motor Company, introduced a minimum wage scale of $5 per day, more than doubling the wages for most employees.
James Couzens, the Ford treasurer, said: “It is our belief that social justice begins at home. We want those who have helped us to produce this great institution and are helping to maintain it to share our prosperity. We want them to have present profits and future prospects. … Believing as we do, that a division of our earnings between capital and labor is unequal, we have sought a plan of relief suitable for our business.”
The Wall Street Journal accused him of injecting "Biblical or spiritual principles into a field where they do not belong." The New York Times correspondent who traveled to Detroit to interview him that week asked him if he was a socialist but also added that his decision as “one of the most remarkable business moves of his entire remarkable career.”

Despite what was claimed, his main reason for the unprecedented wage increase was more likely to be economic rather than humanitarian. With its high turnover, the motor company faced a constant retraining of new workers. By the keeping and rewarding the best workers, the wage increase was offset by increased production and smaller training programs. 

Additionally, the wage increase provided Ford employees with enough money to purchase Ford automobiles, which further increased the company’s sales. In the end, through his ostensively labor-friendly policy, Ford’s business goals were realized and his wage increase had its intended effect: turnover declined sharply, and profits doubled to $60 million from $30 million from 1914 to 1916.
One further example of the long pedigree of the living wage movement: in 1917, The Interdenominational Conference of Social Service Unions, comprising ten religious bodies, including Catholics (like Newt Gingrich and Rick Santorum), spent more than a year formulating a statement of social reconstruction. They issued this statement: 
"In an industrial system such as ours, the right to life practically resolves itself into the right to a Living Wage, by which we mean not a mere subsistence wage but a wage sufficient to maintain a reasonable standard of life."
Regardless what the conservatives would like everybody to believe, the history of the living wage movement is extensive and historical and it should be a source of pride for any progressive. The twentieth century was, in fact, one long struggle between the capitalist on one hand who felt that labor was a resource to exploit and progressive social reformers who demanded a fair living wage of labor.

In the final installment, I will take a look at the last great attempt to address the problem of the living wage, the remarkable success of this movement and its catastrophic downfall. 

To continue to PART THREE

I welcome any comments or questions so don't hesitate to drop me a line to let me know what you thought.