Guest Opinion: The minimum wage and democracy
The minimum wage has been a contentious issue at the various levels of the United States government. About 40 percent of American workers earn a wage lower than $15 per hour, a level popularly argued for; many economists consider a low wage to be under $13.83 per hour.
Under the capitalist firm, the minimum wage does not consider the costs of health care and other human needs not accounted for in the wage relation. The worker, without capital and property, has only his nor her labor power to sell in the market economy.
Human capital in the United States today comprises not only the bones, muscles, and brains of the worker; many have college degrees, are far more literate and educated, and have better access to basic medical care. The relationship of work and capital ought to be in question, not money.
Unabated focus on money has become a mystical goal, masking rational interests and needs with irrational consumption. While monetary compensation in this market economy is necessary to exchange for the means of subsistence, and an increased wage may presently serve many, cash is only a temporary answer; access to capital, goods, and services is what is needed, i.e., control of the means of production, parental leave, day care, pre-school, health and dental care and decent housing.
Popularly argued for is the institution of a $15 minimum wage. We should consider the effects on genuinely small businesses (not those defined by the Small Business Administration as being less than 500 employees). Businesses that employ four or six people who manage on the minimum wage, or more, could be put out of business with such a wage. While helping some, others would be added to the unemployed pool. Such intense regulation of capitalist enterprises is due to the faults within the arrangement of the firm, and thus influence the relations of society and politics. A new organization of the firm is needed, as well as reconsidering of dominant values that guide culture and politics in the United States, that is, profit.
An increase in the minimum wage is no doubt necessary; the current federal wage of $7.25 is unacceptable, as is, arguably, the soon-to-be increased Oregon wage of $9.25. The current federal wage is, when adjusted for inflation, less than 1968's minimum of $1.60, what today would be $10.74. An evolved approach the minimum wage is needed, new forms that would entail a more just and sustainable economy.
Given the current situation, four considerations are here urged:
1) A redefinition of the sizes of various businesses — a more reasonable estimation might be less than 50 employees — or rather to average on the basis of market share (the SBA varies in their standards, in employees or in annual revenue).
2) Given the first point, with recognition of the variables of industry (seasonal work, or other natural fluctuations), construct a relative base wage for businesses for consistency, e.g. (given hypothetical numbers) respectively, $12.50, $15, and $17 per hour. (To note, many large businesses offer benefits to employees that are not explicit in the set wage. A wage of $9.10 per hour may well be $11.60 when including benefit costs.)
3) Implement a tax incentive program for businesses that negotiate wages with workers one-on-one, with worker associations or with other relevant groups. They may choose to have fluctuating wages in months with more business than slower months. Tax breaks for businesses may help decrease the need for welfare programs and thereby diminishing untidy state-control.
4) Invest in and create supportive institutions for establishing worker-owned cooperatives and variations thereof. The internal organization of this enterprise — the growing awareness of their efficiency and effectiveness is well noted — may help make consistent steps toward such political and economic democracy and may allow for a negation of the "middle man" so common in capitalist corporations and businesses, or the state. In Southern Oregon, the SOREDI program can aid in this by explicitly allowing cooperative enterprises, as is done with traditional enterprises, to work with their loan and tax incentive programs. Various forms of investor support exist that can help in approaching this form of firm organization.
Jonathan Chenjeri, a student at Southern Oregon University, lives and works in Ashland. Contact JonathanChenjeri@gmail.com for citations in this article.