The Minimum Wage: Could the Democrats Please Give Consideration to the Idea of Ceasing to Betray Working People?

By Lambert Strether of Corrente.

Let’s begin by noting that the current minimum wage is miserably inadequate and a flat insult to working people. The MIT Living Wage Calculator project[1] has this to say:

While the minimum wage sets an earnings threshold under which our society is not willing to let families slip, it fails to approximate the basic expenses of families in 2013 [or today]. Consequently, many working adults must seek public assistance and/or hold multiple jobs in order to afford to feed, cloth, house, and provide medical care for themselves and their families.

An analysis of the living wage using updated data from 2013 and compiling geographically specific expenditure data for food, childcare, health care, housing, transportation, and other basic necessities, finds that:

The minimum wage does not provide a living wage for most American families. A typical family of four (two working adults, two children) needs to work more than 3 full-time minimum-wage jobs (a 68-hour work week per working adult) to earn a living wage. Across all family sizes, the living wage exceeds the poverty threshold, often used to identify need. This means that families earning between the poverty threshold ($23,283 for two working adults, two children) and the median living wage ($51,224 for two working adults, two children per year before taxes), may fall short of the income and assistance they require to meet their basic needs.

Three jobs, 68 hours… It’s hard work — and extremely time-consuming! — to be part of the working poor.

Is raising the minimum wage popular?

Yes, it is. Rasmussen (a Republican-leaning polling firm) finds that 54% of American Adults favor an increase in the minimum wage, and 32% are opposed. That may be why increasing the minimum wage did so well in the 2014 election:

Voters in four red states approved ballot initiatives to raise their state minimum wages on Tuesday, sending another message to Washington that Americans support a higher wage floor.

In fact, the margins were, in some cases, greater than those of the Rasmussen poll (22%); Alaska’s initiative won by 38%, Arkansas’ by 31%, and Nebraska’s by 20%.

So 2014 was a debacle for Democratic candidates, but not for the sort of policy that, given their brand identity, one would expect Democrats to be backing. Perhaps the Democrats should give consideration to not s*cking on policy if they want to win?

But by what amount should the minimum wage be raised?

There are several ways of looking at this question, depending on the sort of social contract you consider wage labor to be.

$21.72. If by productivity, $21.72. Here the social contract is that if workers become more efficient, then their wages should increase in proportion to the efficiency gains. Oldthink, I know! But if that’s your theory, $21.72 is the result. CEPR:

Between the end of World War II and 1968, the minimum wage tracked average productivity growth fairly closely. S ince 1968, however, productivity growth has far outpaced the minimum wage. If the minimum wage had continued to move with average productivity after 1968, it would have reached $21.72 per hour in 2012–a rate well above the average production worker wage. If minimum-wage workers received only half of the productivity gains over the period, the federal minimum would be $15.34. Even if the minimum wage only grew at one-fourth the rate of productivity, in 2012 it would be set at $12.25.

$15.00. If by cost of reproducing labor power, $15.00.

Here the social contract is that workers sell their labor power for what it costs to reproduce it[2] (which is what “a living wage” is shorthand for). As it turns out, that’s $15.00 an hour. Americans for Tax Fairness:

[We have] analyzed the effect of Walmart’s new wage policy and found that even after the planned pay hikes are fully implemented, large taxpayer subsidies will still be required to make up for the company’s low wages.

Here’s how the numbers break down. An employee working 34 hours a week (Walmart’s definition of “full-time”) for $9 an hour would take home about $16,000 a year. If that worker was single, she would qualify for three out of five public programs. With children, the employee would qualify for all eight of the public programs—and the same is true at the $10 an hour rate.

The reality is Walmart would need to raise its base pay to at least $15 an hour to properly compensate its workers and relieve America’s taxpayers from picking up part of its payroll tab [which amount to $6.2 billion a year in public subsidies that support its employees: food stamps, Medicaid, child care support and five other taxpayer-funded programs].

It’s a remarkable exhibition of state capture that Walmart has actually gotten the taxpayers to “top up” the wage packet they offer.

$10.10. If you’re a Democrat, $10.10.

Finally, one might take the view that the social contract is a pure power relation[3]: Workers are paid what they have the power to take, period; “the strong do what they can and the weak suffer what they must,” as Thucydides said. Here — after agitation began for $15 — Democrats determined that the appropriate level of suffering for workers is to be denied a share in productivity gains, and to continue combining their wage packet with government subsidies to make a living wage.

Obama is throwing his support behind congressional Democrats’ proposal to raise the minimum wage to $10.10 and peg it to inflation, more than a dollar higher than the $9 proposal he made in his State of the Union address in February.

“The President has long supported raising the minimum wage so hardworking Americans can have a decent wage for a day’s works to support their families and make ends meet, and he supports the Harkin/Miller bill that accomplishes this important goal,” the White House official said in an email.

Given that $10.10 does not, as we have just seen, make ends meet, the White House email statement is grotesquely, breathtakingly cynical, even for Obama. (And whenever you hear “hardworking Americans,” keep a sharp eye out of for the con.) In any case, the real tell here is the number itself: Why 10.10? I’ve never been able to find a justification for it. Euphony? Why not be generous, and round up to the nearest quarter, for 10.25? Regardless, $10.10 is the number, and in one of his famous Executive Orders, Obama put that in place for some workers:

On February 12, 2014, President Obama signed Executive Order 13658, “Establishing a Minimum Wage for Contractors,” to raise the minimum wage to $10.10 for all workers on Federal construction and service contracts. The President took this executive action because raising wages will improve the quality and efficiency of services provided to the government. Boosting wages lowers turnover, increases morale, and will lead to higher productivity overall on Federal contracts.

However, as we have seen, $10.10 is not a living wage. And you will notice that none of the justifications in the Order have anything to do with workers at all.

What happens to leftists who try to raise the minimum wage “too much”?

The Democrats try to punish them, or discredit them and compromise away their proposals Naturellement. Two examples, first Seattle, Washington:

Mayor Ed Murray is expected to release his plan to raise Seattle’s minimum wage as soon as today. No matter what happens in the $15 wage debate, Seattle City Councilmember Kshama Sawant has already won.

If the Seattle City Council passes a $15 wage in the coming months (as appears likely), Sawant will appropriately get credit for coming out of nowhere to commandeer the city’s political agenda.

$15.00! Sawant got the workers “too much!” So what do the Democrats do? Run a candidate against Sawant, of course! Black Agenda Report:

Kshama Sawant helped lead a multi-year effort to raise the minimum wage in Seattle. The CEO of Seattle’s Urban League, [Panm Banks,] a longtime political insider with great fundraising connections wants to run for local office. Apparently there are no neoliberal pension-cutting Democrats for her to go after in Seattle, and no neolithic Republicans worth dethroning either.

The number one and only target of Banks’ campaign for office will be the socialist, because she knows things. Pam Banks knows that while you can never have too many Republicans or Democrats in office, even one socialist is way too many. CEO Banks knows that while you can never have too many corporate funded politicians, even one elected official that doesn’t take the corporate cash makes everybody else feel nervous and look bad. … Banks knows that any run against a socialist incumbent will be well funded by forces who already call the League, and her, their good friend. They just might not be friends of the people of Seattle.

Second example, Portland, Maine, where the Greens started an initiative for $15.00. Then this happened:

Under Portland mayor [Brennan’s] proposal, the minimum wage would initially increase from the current $7.50 to $9.50 an hour, with additional increases scheduled over the next few years.

Again, $15.00! Those darn Greens are trying to get the workers “too much!” Green state chair Asher Platts met with Brennan (sorry, Faceborg):

I saw the mayor of Portland today, he seemed really upset at the #‎15now campaign for overshadowing his more moderate min wage proposal.

What was odd, was when I explained to him that we supported any work to raise the wage, and that our campaign does him a favor by making his proposal look more moderate, and explained how with negotiations you always ask for more than you expect and compromise your way back, he said, “maybe that’s how you negotiate Asher, but that’s not how I negotiate.”

Which I was confused about, because… the definition of negotiation….

I guess he’s right though, that’s not how Democrats like him negotiate– they start conceding everything to their opponent and work their way backwards from there.

“[T]hat’s not how I negotiate.” Indeed!

Are there business benefits to raising the minimum wage?

Besides those mentioned in the statement that accompanies Obama’s Executive Order? Why, yes. One of the leitmotifs of the Obama recession has been business owners and managers complaining that “Darn it, we just can’t fill that skilled welder position for $8.00 an hour! What’s wrong with people these days?” Well, even or perhaps especially if you accept human rental by capital as the means of doing the work that society needs done, there is a mechanism for handling that issue: The pricing mechanism. The Gap — before Walmart and McDonalds — applied it, with wondrous results:

So far, there’s been one clear reaction, a Gap executive said at a conference Tuesday in Washington. For years, the company had tried to get more people to apply to work at Gap’s stores. Only the wage increase made any difference.

“Almost immediately, we saw our applications increase by double digits,” said Dan Henkle, the company’s global head of human resources, on a panel at the Council of Institutional Investors’ spring conference. That, in itself, should lead to better performance, he thinks. “The idea is, the more people who are applying to your stores, the greater the pool to choose from, you’ll get the best talent into your stores.”

If the Democrats — and, for that matter, J-Yel — are truly worried about the labor force participation rate, instead of shedding crocodile tears about it, then one way to entice people back into the crapified jobs is to at the very least not offer crapified wages. Eh?

Is there a business downside to raising the minimum wage?

Once you get away from the chalkboard, the neoliberal textbooks, and talk radio, it seems not. The fight in Seattle revolved around the restaurant owners, and it seems that they suffered no ill effects. Seattle Times:

Truth Needle: Is $15 wage dooming Seattle restaurants? Owners say no

The claim: Recent Seattle restaurant closures may have been linked to the city’s new $15 minimum wage.

What we found: False.

An article suggesting the $15-an-hour minimum wage was a factor in some recent Seattle restaurant closures caught fire with national and conservative media this week[4]. The only problem: When we asked the restaurateurs in question, they said it’s flat wrong.

And here’s the cost to diners from Eater:

How will the wage law impact the consumer? Will it increase prices? According to a University of Washington report prepared for the Seattle Income Inequality Advisory Committee, wage increases of about 10 percent can result in a 1- to 2-percent increase in a restaurant’s operating costs, which in turn translates to “one-time” price increases of about 0.7 percent. And so because the full wage increase from $9.47 to $15.00 represents a 58 percent change, consumers could see price hikes of about 4 percent total in the coming years from the wage law…

So, I can increase the wage packet for the cooks, the waitstaff, and everybody else by 60% while paying — let me break out my calculator: 20 * 1.04 = 20.8 — 80¢ on a twenty dollar meal? That doesn’t really seem so bad, does it?

So why do Democrats keep kicking the left?

I don’t know[5], honestly I don’t, although I’m reminded of Harry Reid disliking the “smelly tourists” who visit the Capitol; fortunately, the new Visitors Center forces them far underground, away from the sensitive nostrils of our elites. And I’m also reminded of Frum’s Law:[6]

But why Democrats hate the base — I grant I’m identifying the left with the base[7] — I don’t know.

Could it be that Democrats just don’t want working people to succeed?

I think it could. McDonalds offered its (non-franchise) workers a raise:

[B]ut hopes had deflated. Ms. Andino, who earns $8.75 an hour, the minimum wage in New York State, quickly learned McDonald’s was offering only $1 an hour more than that. And the pay increase was only for employees of company-owned stores, not for employees like Ms. Andino who worked at McDonald’s franchises.

But that did not stop Ms. Andino from feeling encouraged by the news. By 11 a.m. that day, she was demonstrating in Midtown Manhattan with dozens of other fast-food workers for better pay. The employees derided McDonald’s offer as too little money for too few employees, but they hailed the overture as proof that their protests were finally bearing fruit.

“We’re making progress,” said Ms. Andino, 20, who like many other workers continued to press McDonald’s and some retailers to increase wages to $15 an hour. “If we continue fighting, we’re going to end up winning.”

“If we continue fighting, we’re going to end up winning.” I think that’s a feeling that Democrats just don’t want working people to have[8]. The weak suffer as they must.


[1] Interestingly, Ikea pegged its wage to the results of that calculator.

[2] In other words, labor power is a commodity like any other, and in this case is sold at cost.

[3] Here are Bob and Ray on the Thucydidean theory of labor relations. Caution: The humor is Sahara dry.

[4] Amusingly, our crazypants Republican governor picked up on this.

[5] The classic expression of this existential question for the left comes from Susie Madrak (and WaPo):

“We’re the girl you’ll take under the bleachers but you won’t be seen with in the light of day,” the blogger, Susan Madrak pointedly told Axelrod on the call, which was organzied for liberal bloggers and progressive media.

Needless to say, she was not invited back. Now, as of this moment, the Democrats are emitting left-like noises, but I think that’s because “they have no place to go”; in the 2014 debacle, most of Steve Israel’s Blue Dogs got nuked, as voters decided they might as well vote for a real Repblican instead of a fake one.

[6] I did some Googling and found what I believe to be the original expression of Frum’s Law. Curiously, it seems to be a retweet (“RT”) from Glenn Greenwald (“@ggreenwald”) but I can’t find anything from Greenwald at all. So Frum’s Law it is.

[7] A good proxy for the size of the left is 14% of the electorate: Those who think ObamaCare doesn’t go far enough, and presumably want single payer or even a national health service. Last I checked, that’s about the size of the (feared) Tea Party.

[8] Unless it’s channelled, controlled, and neutralized by the Democratic nomenklatura, of course.

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.


  1. Disturbed Voter

    Can we stop pretending that the US isn’t like China? We have a one party system, just like China … only the Chinese are more honest about it. Those techno-tycoons in California look more and more like mandarins every day.

    Unfortunately there is no non-controversial definition of what a person is worth, what their labor is worth. Capitalism tends to make war against labor, hence the attractiveness of socialism.

    It is clear, in a given location, at a given time, what it takes monetarily, for an individual or family to live a modest existence … unfortunately academic economics doesn’t give a fig about that.

    1. big money party

      It is a one party system with good cop/bad cop & divide-and-conquer strategies.

      Lambert, I appreciate your activism, and I mean this with all due respect–but can we all stop pretending the Democrats give a nano-second of thought to their working class victims?

        1. two beers

          Emulation of your literary namesake may be laudable in certain social situations, but is entirely misplaced when discussing diseased and rotting political systems.

          It is unclear at times whether you’re merely beating around the bush, or if you simply don’t even see the bush.

  2. allan

    As last night’s farce in Chicago showed, the Dems’ contempt for the base is reality-based.
    The GOP isn’t the only party with a lot of low-information voters.
    If Rahm’s TV ads bought with Ken Griffin’s contributions can get people to forgive and forget,
    then that’s a viable electoral model.

      1. CB

        The more I read about Chuy, the less I think of him. A lightweight taking on a (small) heavy hitter and no definitive plans for governing. Do all these so-called progessives live in bubbles?

  3. Ned Ludd

    When leftists organize into a powerful force, they get thrown in jail, like the American Railway Union leaders jailed to suppress the 1894 Pullman strike. When leftists achieve electoral success, they are targeted like Kshama Sawant or simply banned from serving, like the members of the New York State Assembly removed from their seats in 1920 for being members of the Socialist Party of America.

    From Eugene Debs in 1919 to Angela Davis in 1970, effective advocates from the left are jailed and coerced into silence, providing room for establishment-friendly social democrats and liberals to fill the void with palliative measures; these measures may provide temporary relief but, they do not, by design, alter the balance of power.

    1. Ned Ludd

      I meant to write: “jailed or otherwise coerced into silence”. For Angela Davis, I was referring to her dismissal from UCLA.

      UCLA philosophy professor Angela Davis was dismissed by the University of California Board of Regents for her acknowledged membership in the Communist Party. The decision was met with protests and students packed Royce Hall for her lectures during appeals. A judge later overruled the decision, but the Regents finally prevailed, firing Davis in 1970 for “inflammatory language” that she used in several speeches.

      As of 2008, California law still stated “that any organisation that applies to use a public school facility can be asked to sign a statement that ‘the applicant is not a communist action organisation or a communist front’.” The state senate voted to repeal this part of the law – now that “communism no longer threatens the U.S. government’s political well-being”.


      Though Lowenthal said he believes communism no longer threatens the U.S. government’s political well-being, nonetheless, his bill makes clear that one cannot teach communism with “the intent to inculcate a preference for communism.”

      One can, presumably, still teach capitalism with the intent to inculcate a preference for capitalism.

  4. cassiodorus

    Why do the Democrats keep kicking the left?

    Because the Democratic Party is a right-wing party. If $10.10/hr. is enough to buy off the working class while promoting corporate profit in a world of declining economic growth, then what’s the point (for them) of $15/hr.?

    from this diary:

    Americans would then think of government power as being contested by two different types of conservatives:

    1) Antipublic conservatives — conservatives who are interested in destroying the public sphere and the commons for the sake of some idea of radical, disconnected individualism that imagines everyone as individuals defending property with guns, or as beholden ideologically to the church of their choice (see e.g. Rick Santorum).

    2) Corporate conservatives — conservatives who are mainly interested in “saving capitalism” (Obama’s primary mandate) and who do so by maintaining corporate hegemony but who are also interested in buying off the mass public to the extent necessary to preserve the social order.

    1. Demeter

      One point to a “real” living wage would be the regeneration of the US Wealth Machine. There cannot be wealth generated, when the capital sits in piles like manure, breeding flies like Jamie Dimon and the Congress and the current regime in the White House…

      1. Disturbed Voter

        Money doesn’t drive an economy, it only greases it. Once you have enough liquidity … then everything depends on the real economy, not on finance. Excess money is also bad, because that attracts finance flies … speculation rather than investment happens.

        What actually happened in 2008 was the uncovering of massive control fraud. The Feds restored order by committing a even larger counter-balancing control fraud. The money made in much of the private sector prior to 2008 wasn’t real money, it was counterfeit … and like a Ponzi, it benefited the folks who got to First Base first, but eventually you run out of rubes. One bankrupt gambler covered the bets of another bankrupt gambler … in both cases with counterfeit money. Feds covered a bad balance sheet with new counterfeit money.

        On net, if the money had gotten off the balance sheet, into the real economy … then it would have been massively obvious that the government is bankrupt, not just the financial sector. As it is, the government fraud continues, as QE, to cover the annual deficit … which happens because for many years now, the US is politically bankrupt, the financial bankruptcy is just a symptom, not a cause.

        There is real capital out there … but the vast quantities of fiat make it as hard to find as a needle in a haystack. Money measures capital, facilitates the transfer of capital, but it isn’t capital. Most of the new capital is in Chinese factories.

        1. Pelham

          Good analysis, but I’d disagree on one key point. The government can’t be insolvent because it can always print more money. And printing money to hand over to banks, we now know, clearly isn’t inflationary.

          However, printing money in the face of a key shortage in the real economy — such as energy supplies or labor — would be inflationary. Fortunately, we have no such shortages at the moment. So we should be printing money and distributing it directly to households.

          Unfortunately, the Dodd-Frank law explicitly forbids the Federal Reserve from distributing money to actual human beings while opening the floodgates for money printing to benefit those detestable creatures known as bankers.

          1. Disturbed Voter

            Your view is a conventional (if liberal) one. You have lots of company. There is a difference between insolvency and bankruptcy … a crucial one. Zimbabwe never became insolvent, but it has been politically and economically bankrupt … under President Mugabe. Indeed, with high speed trading of all sorts of securities, including FX … insolvency is the least problem we have.

            In addition you are implying a conventional market equilibrium model, as imagined in a Drambui fevered moment … by Adam Smith. Markets have never worked that way … supply and demand … and the hidden hand (but we know that the hidden hand wasn’t a metaphor) … are complete fabrications.

            Bankers merely facilitate the plutocrats behind the bankers … the plutocrats call the shots, and have been since building pyramids was in style. Most people are completely gullible as to the nature of the FR or of the government. It isn’t “of the people, by the people, for the people”. In those days it was of the Vanderbilts, by the Duponts, for the ghost of the Second Bank Of The United States.

            The establishment has no more intention of sharing their ill gotten gain, than the Mob intends to share out their ill gotten gain with the ghetto dwellers. Economics has nothing to do with it … criminology does.

    1. jrs

      Really though I really believe the reason is because bribes. These politicians are bought and paid for and we know it (even if we aren’t allowed to enough exactly where the $$$$$$$$$ is coming from).

      1. Kurt Sperry

        Looking at European countries, some with pretty strict campaigning and electoral controls, it’s obvious by the political outcomes seen that such controls are, while necessary as part of any solution, also insufficient in themselves. Putatively left Euro parties produce Blairs, Hollandes, etc. ad nauseum and in Italy Berlusconi simply owned the media many watch and built an empire on highest level corruption, meaning corruption that is all but unprosecutable. Billionaires and democracy, as others have noted, may be fundamentally incompatible.

  5. Northeaster

    Massachusetts is in a higher income bracket, yet income disparity is one of the worst in the country, with an increasing populace in poverty. Mind you, Massachusetts is a one-Party state, Democrat, and has been solidly since the early 90’s. They have a super majority, and until last election, had The Governors Office as well. If this income increase is the panacea, then we should have been ground zero for this theory in income disparity. Blaming The Republican Party doesn’t work, they are near non-existent here, so the thesis here doesn’t work in my state.

    Meanwhile, Massachusetts taxation continues to reach record levels, while incomes continue on their 14 year trend down.

    1. EricT

      If you look at a listing of states by ratio of income for the 1% compared to the bottom 99%, you’ll notice a lot of blue states at the top, but you will also notice that the median incomes for both the 1% and the 99% are significantly higher than that of the red states. Perhaps taxes are the reason behind a more equitable arrangement between the 1% and the 99%.
      Table 2
      Or maybe taxes have absolutely nothing to do with income inequality in the first place.
      Appendix C
      But, well being is definitely correlated to the red – blue divide

      1. MyLessThanPrimeBeef

        A lot of people believe the democrats and the republicans are not that different.

        If so, how do we explain well-being correlating with the red-blue divide?

        Believing in something will make it real? People are wrong to say the two parties are the same or similar?

  6. tongora

    Lesser evil = more effective evil. The old wolf in sheep’s clothing routine. Simple, but extremely effective.
    “Game over, man. Game over.”

  7. Bart Fargo

    An interesting tidbit from the link in footnote #1 is that the wages from the MIT Living Wage Calculator aren’t meant to allow for retirement savings. I can appreciate why allowing for such savings would make the calculations more complex, but SS was never meant to be a primary source of income even in the days before the price of medical care took off like a rocket. So I question whether the numbers it spits out could really be considered “living wages” if they ensure only the most insecure of retirements. The link also explains how the calculator can yield wages that are even lower than $10.10 if the calculations assume an employee is single and lives alone in a relatively inexpensive part of the country. Naturally, these are the parameters chosen by the companies who’ve used the calculator to set their minimums, and we might guess the Obama administration arrived at $10.10 through similar assumptions. Though in general I must agree with you that their numbers are fairer, and certainly more evidence-based, than anything mainstream Democrats have to offer.

    Otherwise, I think it would also be helpful to point out the positive effects a minimum wage increase is likely to have on domestic consumption, to counter the argument (favored by many opponents) that increasing the minimum wage could only increase unemployment and thereby cancel out any benefits. This point demonstrates how elites since the late 60s are perfectly happy with a smaller pie, just so long as they get to eat nearly all of it and top it with plenty of frothy financial whipped cream.

    1. diptherio

      The MIT living wage calculator is (I suppose) a step in the right direction, but still a joke. No retirement savings is just the beginning–they should call it the “just barely living” wage calculator…

  8. Adams

    Harry (Smelly Tourists) Reid is a lame duck. The new minority leader in waiting, Chuck (Carried Interest) Schumer is too busy blowing Barry’s kneecaps off on the Iran deal to dink around with such trivia. Also, he has to set an example of unilateral “Moderation and Bipartinsanship” ™ for smelly populist Senate Dems like Liz and Bernie, who apparently just don’t get it. Yet.

    Nicely argued, Lambert, but I think the “sainthood of lost causes” designation is already taken.

    1. Oregoncharles

      Once again: Bernie is NOT a Democrat. Until recently, that’s been his saving grace.

      which makes it doubly ironic that he’s now considering running for the Dem nomination.

      1. Adams

        Good point, thanks. But he walks like a Dem, talks like a Dem, caucuses like a Dem. Not sure how he quacks. Maybe he only wants to be a Dem, so he’s going to run as one. Also, there is no Socialist Party. I looked it up in the Yellow Pages. But we love him anyhow.

        1. Steven Greenberg

          Bernie Sanders talks like no Democrat I know, and that includes Elizabeth Warren.
          Can you quote us some Democratic sounding remarks that Bernie Sanders has made?
          Let’s start with one and go from there.

  9. TedWa

    Democrats betrayed their common good legacies handed down to them by bailing out the banks. They still think it was the right thing to do. I personally never thought it was. How can you change that mindset without voting them all out? If you can’t do the latter you can’t do the first. Throw in a lying weasel Democrat for President in 2008 and 8 years later you’ve got that mindset set in stone. They believe their own bs and nothing gets in the way of that.

    Absolutely no one seems to want to admit that in order for capitalism to work there must be capital, and that among the blue color working classes. Corporations aren’t job creators, everyday people are. Their money and their needs spur the innovations that’s taken this country so far. If you don’t pay them enough capitalism dies and crapitalism thrives like a zombie apocalypse sucking out whatever marrow remains in the backbone of this country. Pay em!! I say. And get these welfare queen corporations off the government dole. Is it possible that the only reason we have Walmarts springing up everywhere and fast food joints on every corner is only because they would not exist and thrive to the extent that they do without government subsidies? Sadly, Yes.

  10. Globus Pallidus XI

    Supply and demand people, supply and demand.

    Wages are low primarily because our post-1970 cheap-labor open-borders immigration policy has flooded the market for labor. Period. If we can’t address this most basic of all economic facts, then the rich have successfully brainwashed us and we might as well stop wasting our time.

    I know, I expect we will hear the usual mass-media conditioned mantra “That’s just scapegoating immigrants”. If so, for shame. First of all, nobody is saying anything about ‘immigrants’, the issue is entirely foreign nationals. And nobody is scapegoating anyone, but only pointing out that if importing foreign nationals at an excessive rate causes the labor supply to increase much more rapidly than jobs, wages fall and profits rise. They just do.

    If finance were not so corrupt, could we possibly create enough jobs to absorb the current rate of population increase? Perhaps (although seeing how the population increases in California are causing water shortages, the USA may be running short of the resources to do that). But this is not relevant. If a bridge can safely hold 100 people, and I march 500 onto it, and it collapses, am I blameless because in principle a stronger bridge could have been built? Nonsense. We have the economy that we have. FIRST make it able to handle more people – if that’s possible – THEN you can add more people without driving down wages. Not the other way around…

    1. JTMcPhee

      GP, a really masterful job of blowing nativist smoke there. Care to add any numbers and citations to support the notion that open borders either existed, or that “foreign nationals” (except maybe in the sense of all that offshoring of everything by craporations) are the reason wages for ordinary people have been driven into a little dark hole and stomped on for nigh onto 50 years?

      1. Vatch

        I don’t think GP is blaming immigrants or foreigners; he’s blaming the corporate executives and politicians who encourage high levels of both immigration and offshoring. There’s plenty of information about the effect on wages here.

        1. JTMcPhee

          Really, vatch? Citing the Center for Immigration Studies, which bills itself as a right-wing think tank focusing on immigration issues and if you scan the stuff put up there seems hardly even fair and balanced? THIS CIS, ? The one that puts out stuff like this? The sidebar snapshots on CIS’s web page are apparently screen shots from FOXNews programs.

          I guess, to be fair and balanced, in the world of informatics, stuff like that can be considered “information…”

          1. Vatch

            There’s nothing in the “About” page that says the organization is right wing or conservative. As for Steinlight, his boss reprimanded him, although I think he should have been fired. A lot of NC readers probably also think that Obama should be impeached.

            Until there’s full employment in the U.S. (and I mean real full employment, not the rampant underemployment we currently have), and the U.S. population is no longer growing, then we can think about allowing increased immigration.

            1. JTMcPhee

              Got to protect the bona fides of our favorite sources and cites, right? Some folks are pretty clear that the CIS has the orientation i stated:,d.b2w

              One would have to do some deductive reading in the “About” page, and look at the rest of the people and work product that make up the organization, to reach the conclusion about orientation of CIS, you got me there. But other people have done that and there’s lots more documentation where the Daily Beast link comes from. Hmmm- does The Daily Beast employ a lot of cheap-labor open border immigrants who are not illegal aliens?

              I do like the original poster’s handle — Globus Pallidus, literally “pale globe,” also with interesting physiological connotations:

              The globus pallidus is a structure in the brain involved in the regulation of voluntary movement. It is part of the basal ganglia, which, among many other things, regulate movements that occur on the subconscious level. If the globus pallidus is damaged, it can cause movement disorders, as its regulatory function will be impaired. There may be cases in which damage is deliberately induced, as in a procedure known as a pallidotomy, in which a lesion is created to reduce involuntary muscle tremors. When it comes to regulation of movement, the globus pallidus has a primarily inhibitory action that balances the excitatory action of the cerebellum. These two systems are designed to work in harmony with each other to allow people to move smoothly, with even, controlled movements. Imbalances can result in tremors, jerks, and other movement problems, as seen in some people with progressive neurological disorders characterized by symptoms like tremors. The basal ganglia act on a subconscious level, requiring no conscious effort to function. When someone makes a decision to engage in an activity such as petting a cat, for example, these structures help to regulate the movement to make it as smooth as possible, and to respond to sensory feedback. Likewise, the globus pallidus is involved in the constant subtle regulation of movement that allows people to walk, talk, and engage in a wide variety of other activities with a minimal level of disruption.

              1. Vatch

                I might be wrong about the Center for Immigration Studies. Perhaps they do present a biased point of view. But I’m concerned that the article you cite uses the Southern Poverty Law Center as a source. Some consider that organization to be very unreliable. See this short article by someone who happens to also object to the viewpoints of the Center for Immigration Studies. The SPLC, as of 2010, had $175 million in assets. Shouldn’t some of that money been spent on the causes that they claim to care about?


                You might also want to look at this PDF file with the SPLC’s IRS form 990 for 2013. The salaries of the company’s top officers lead me to believe that the SPLC is primarily a money making operation. You’ll have to scroll down a bit to see that Morris Dees was paid more than $326,000, and Richard Cohen was paid more than $319,000. And the group’s assets as of 2013 are up to $340 million!!


            2. MyLessThanPrimeBeef

              I think that’s another consequence of having the world’s reserve currency – no one can print it like us to attract people from all over the world to come here to earn it.

              Not only their subjects, but governments themselves all over the world desire our money.

              It’s not comforting to imagine another world where we from might here have to move to another country to earn her fiat money.

      2. Oregoncharles

        The fundamental question is whether the law of supply and demand applies to labor. ALL economics assumes that it does. There are modifications – for instance, the increase in demand that comes with having, and especially paying, more people. However, hiring people in the very worst bargaining position minimizes that effect.

        Unless you’re prepared to disprove that supply and demand applies to labor, all you’re doing is name-calling.

        Incidentally, this is independent of how we treat immigrants once here. The better their status, the less the downward pressure on wages and working conditions.

        The real solution is to address the horrible conditions where they come from, which are often the result of US policies.

        1. Ben Johannson

          Keynes made clear in The General Theory (as Kalecki did seperately) that labir is not subject to supply and demand market forces but is driven by the phenomenon of effective demand, hence you are simply wrong to assert all economics assumes otherwise. Furthermore ainstream economics assumes if labor supply increases then demand for labor will increase equivalently a la “supply creates its own demand”. Wages are a factor of demand for labor production, not market equilibria.

          1. Oregoncharles

            How is “effective demand” different?

            I took Keynesian economics in its heyday, a long time ago, but don’t remember this distinction. Perhaps it wasn’t in Samuelson.

            In general: labor is obviously going to behave differently from inanimate supplies. For one thing, it’s self-mobile, and capable of going on strike. But I still see no case for the original claim. Higher demand probably won’t produce higher supply, because that isn’t why people have babies, but I suspect demand will definitely affect wages – at least unless the laborers can set their own rates, a very small subset.

            1. Steven Greenberg

              You didn’t take Keynesian Economics if you got it from Samuelson, especially in the later versions of his book. Samuelson left out an awful lot that he didn’t he didn’t like, or that he didn’t think we could handle. What would Joe McCarthy have said, after all? A fellow has to keep employed.

              1. fdsf

                I think ben is referring to the ability of McDonalds or Exon Mobile to sell another unit because there’s another consumer in the country. Though that is demand, it doesn’t create wealth, and the extra mouth just pushes down wages through cut-rate labor markets. Basically, it’s B.S.
                The New “Left” can drop the zeal for immigration. The people that are here need to be integrated to keep solidarity, but everyone else needs to be discouraged from coming, like any other non-Western country on Earth…

    2. amateur socialist

      Regarding the problem of legal immigration I note that Computerworld reports that the Immigration and Citizenship service hit the FY2016 H-1B visa cap in April.

      Perhaps someone could ask Madame Secretary what this indicates for un and underemployed recent STEM graduates. Soon please.

    3. James Levy

      I object only to your mono-causal explanation, and the fact that if what you say is true, that immigration was the only factor, period, then why outsource? Why offshore? If all those immigrants drove wages down, down, down, then why the Rust Belt, where the jobs weren’t taken by immigrants, they were sent elsewhere? And why have wages for people like doctors and university professors stagnated? Surely they aren’t under pressure from illegal immigrants.

      You can make a case that mass immigration hurt the bottom quarter of the population, and that perhaps it had a spill-over effect into the next quarter, but you cannot make the case that it was THE cause of lower wages across the board. Your obvious rage and desire to make this exclusively the fault of immigration does indicate that your hostility is based on more than just righteous indignation.

      1. Kyle

        I’ve always found it extremely odd that someone would take up the interests of foreign nationals over their own countrymen sans some qualifying factor such as wars of imperial aggression. Are you confused who your countryman are or are you just misrepresenting your allegiances?

        “…your hostility is based on more than just righteous indignation.”

        Oh, since you brought up the race card, here’s a big fat joker for you –

          1. financial matters

            Yes, this sounds like a recurring theme:

            “Moreover, because of this self- imposed impotence by the federal government, employers who try to follow the law are penalized because they must compete with employers who violate the law and benefit by paying lower wages and providing cheaper working conditions that are more profitable to these employers but hazardous to the illegal workers. The status quo, therefore, is a perversity of justice. Law breakers are rewarded while law abiders are punished.”

          2. Kyle

            Yes Lambert, you wouldn’t believe the number of illegal immigrants working for chicken farmers contracting to the likes of JBS, Tyson and Pilgrims. Also in processing, like potato chips. They’re all over the south but as well in any agricultural state such as California of course but also Idaho. Labor can’t compete with foreign labor that lives six to a room in the lowest rent housing they can find and God only knows how much they really make.

            Greenspan actually went to Congress to promote legislation for the increase of immigration to increase the value of the dollar. It’s sickening.

        1. James Levy

          My reply was, in general, a technical one. I notice you didn’t address the obvious points about offshoring and the Rust Belt and the fact that the incomes of professionals, who are not under wage pressure from illegal immigrants, have been stagnant for years. My guess is you have no answer to these inconvenient facts, but you can enlighten us all by providing an answer.

          As for countrymen, I give that as little weight as I give a man’s race or religion. A person is either good or bad. Where they were born has little to do with that.

          1. Kyle

            Fair enough, but you could have left out the racist backhand slap. It was unfair and unwarranted. And I still have a problem with people who lack loyalty to their own.

            I concur with your argument concerning multi-causality. But with the helter-skelter of the chronology in your examples you’re attempting to make hash of the real impacts of immigration both legal and non of the current day. I can’t agree with that given that manufacturing has been offshored with the majority of new jobs coming in the service sectors.
            The Rust Belt phenomenon was much earlier than NAFTA so I don’t understand your rationale there. A lot of reasons for it, primarily though was the oil cartel driven inflation that caused the greatest amount of damage, in my view, along with steel dumping by Japan into the US. Japan also began making serious inroads with automobile imports into this country enabled by poor quality US vehicles that the industry thought it could get away with because of ‘market capture’, but that was later too.

            It was NAFTA that caused the multi-decade expansion of illegal immigration into this country through agricultural product dumping by the US into Mexico. It destroyed Mexico’s agricultural sector but there was also quite a bit of US foreign capital shenanigans going on also. Worked quite well to get the Mexicans to migrate to the maquidoras to work for slave wages just to survive. US proxy wars in South America added to border porosity.

            All of this is caused by the destruction of labor. All of it. The mass migrations in the US from the Rust Belt to the Sun Belt, migrations across the southern border, migrations in Europe; none of these would ever have occurred without the destruction of people’s ability to earn a living. Now it’s occurring in the US on a level that the term ‘wage slavery’ ceases to be a euphemism.

            See below the article I posted by Henry C. K. Liu for more.

            1. Lambert Strether Post author

              “Loyalty to their own.” Hmm. “I am human, I consider nothing human to be alien to me.” –Terence.

              Adding. “All of this is caused by the destruction of labor. All of it.” Yep. On both sides of the border, or rather, on all sides of all borders.

              1. Sibiriak

                Lambert Strether: “Loyalty to their own.” Hmm. “I am human, I consider nothing human to be alien to me.” –Terence.

                Why stop at human? Why not all life? What’s the principle for drawing a line?

              2. Kyle

                Nice try Lambert, but a plane without wings won’t fly. Those people live by different laws than we have here. Men institute government to provide for their common defense and security. This from John Locke if you would take that as a sufficient reference whom James Madison almost directly quotes using those terms. Presumably that means food security and job security or economic security or the general welfare. And, you will not resolve the problems of their country by moving them here just as you cannot resolve China’s population problem by moving that population here. To do so would be to also move their problems here. The whole world cannot live here. The way you resolve their problems is to promote these ideals and their enforcement by their own government.

                The US through NAFTA destroyed the will, if it actually existed in Mexico, of their government to provide for the purposes for which it should have been instituted. I don’t believe it ever existed given Mexico’s history of extreme class differences dating from the days of divine right monarchy. If we want to do more, then the thing to do would be to get NAFTA repealed so that Mexico has sufficient food security at least. Many of the Mexican farmers were poor prior to NAFTA but they had food security before they had to move to the maquidoras to survive. The political problems will be more intractable.

                Even given the largeness of your ideals, you cannot in reality, take care of the whole world. We can, by being loyal to ourselves, provide for our own and thereby set a suitable example. Without loyalty, there is only anarchy, treason and chaos notwithstanding your quote.

                  1. Kyle

                    Fellow citizens. I don’t see how allowing foreign nationals to come here and displace those already here from economic security is a good thing. Bit of a beggar thy neighbor approach. Must be other means, don’t you think?

          1. Vatch

            Uh, there’s no mention of Tancredo in the linked article. Do you have a comment on what’s actually written there?

    4. Kyle

      Development Through Wage-Led Growth – Stagnant Worker Wage Income Leads to Overcapacity by Henry C.K. Liu

      “…in the post industrial finance economy, the export sectors in low-wage economies are largely owned or financed by cross-border international capital. This type of international trade incurs inevitable long-term stagnation in the domestic economies of all trading nations because the low wages paid by international capital lead to insufficient aggregate domestic consumer demand.”

  11. Ulysses

    Awesome post!

    “Rose said he wants people who speak up for a living wage to know that they are not alone. He said the whole community stands behind those people.

    “Sometimes it seems very lonely, like you may be the only voice,” Rose said. “So I say to you here today: Let us never give up this fight until we see a living wage for every single person, every human being, this county, this community, this nation, this world. Let’s not stop until a living wage is the order of the day.”

    Read more at:

    1. OooSillyMe

      “Let’s not stop until a living wage is the order of the day.” We need to DEMAND that Congress get off it’s lazy ass and do SOMETHING about the economy. No more allowing the posturing and whining on TV about how bad Obama is and that everything he does is “bad”. We have seen the unemployed left hanging, retirees without their expected pensions because they were stolen out from under them, massive cuts to SNAP, Meal on Wheels, Housing and Heating assistance while the filthy rich roll in untaxed dollars and whine about how we are all “envious” of them. It is well past time for American corporations to pay taxes instead of use every loophole at their disposal to pay nothing and get millions in refunds. No one in DC will listen to us until we ALL DEMAND a living wage….not a bare survival wage, not a pittance wage but a REAL LIVING WAGE. I am in my 60’s and my father was the sole provider for my mother, 7 kids, 2 cousins and my uncle who was my age AND they bought a house, 2 cars and sent us all to Parochial school……now 2 parents working can’t even afford rent, electricity, heat and food.

      1. JTMcPhee

        A couple of words that aren’t heard enough in connection with the phrase “We need to…:” DEMAND, and ORGANIZE. And one more: POWER. Those are the ones that have gotten the kleptocrats to where they are, on top and pushing down. The nature of the game, going back to that wonderful skit in “The Holy Grail:”

      2. hunkerdown

        What’s that? We need to pray to the oligarchs to stop being so oligarch-y? Why are you protecting them and their positions? If anything, every person who hasn’t left Gomorrah the entire DC metro area needs to be driven into the Atlantic, Trail-of-Tears style, not spoken to, much less reasoned with.

  12. Dan Lynch

    Enjoyable essay, Lambert.

    Lambert said I grant I’m identifying the left with the base.

    I would say that the current Democratic base is urban, not left.

    There was a time, during the New Deal – Great Society era, when Democrats kinda sorta halfway represented the working class, both rural and urban. But that’s dead, and has been replaced by identity politics. Do you identify with the articulate urban 1%’er, or with the brush-cutting cowboy hat wearing red state 1%’er? But no matter who you vote for, the 1% win.

    1. Lambert Strether Post author

      If you crudely divide the body politic into the 1% (really the 0.01%) who own the show, the 20% who help them run it (“pillars of the regime”), with half of the 20% holding genuine power, and the other half being wannabes, and then the rest of us working class, then I would say the Democratic “base” is firmly anchored in the 20%, and that’s really what the capture of the Democratic Party machinery by Obama’s faction signifies. (See here for the “creative class”* and its cultural markers, like PBR; you can skip the first part.)

      Of course, the Democrats are still collecting residuals on FDR, but Obama’s crapification of Keynesian stimulus in 2009, along with the new normal of a permanently crapified labor market, took a lot of good will off the balance sheet.

      * Ever ask yourself who writes the software that’s giving all the UPS drivers knee, back, and neck pain?

      1. hunkerdown

        At a guess, a UPS-style project would be built largely offshore, with a few token H-1Bs sponsored by Infosys or Tata. But as far as the cweative cwass is concerned, those are allies.

    2. Jim

      The old New Deal coalition that tended to unite well-paid industrial workers with farmers and minorities has passed into history. Democratic party power today seems to pivot on a coalition of urban poor( who tend to trade votes for transfer payments) and the high-tech rich. And this coalition seems to be held together intellectually by the media-foundation-university-government sector.

      It is this latter grouping that is of prime importance in churning out “progressive ideology.”

      This sector is primarily upper-middle class and includes many artists, writers,actors, fashion designers and non-profit honchos. along with tenured professors in the elite universities.

      This creative grouping is tied closely to media oligarchs who also tend to have tight linkages with the tech establishment. Their real power comes from collectively persuading, instructing and regulating the rest of our society.

      Of course, the plight of the small-business middle class is ignored by these groupings–as well as the importance of skilled labor and its potential contributions to economic growth in the more traditional manufacturing and construction sectors of the private economy.

      The power of the Democratic party depends primarily on the support of the wealth and knowledge generated by the finance, media and tech sectors and cemented together by intellectuals in the entertainment-media-government-foundation-university complex.

        1. hunkerdown

          It’s not *all* Hollywood, or their digital/gaming divisions, but I’d suppose that the rank and file of the creative class, being highly informed on TPP’s IP issues, would rather not give up their black-hats liberating content. Big Pharma is in a better position to capitalize on the new IP regulations or anything in TPP than is the $10/hr web designer. Insofar as “liberalization” means introducing middlemen to create scarcity where there was none before, partner governments would likely also be glad to have a better excuse with which to attack not only whistleblowers but “undo” leaks.

    3. hunkerdown

      I would say that the Democratic base is urbane. That is, the sort of people who really don’t want their posh, overrated high school lives to ever end. Not that any political party exists for any other reason than to perpetuate the problems to which it sells itself as the solution. Does one identify with the abused, or the rescuer? Regardless, the abusers whimper and wring their hands all the way to the slave auctions.

  13. Denis Drew

    If somebody in 1968 — when the LBJ min wage was $10.75 in today’s money — had asked Americans what could possibly cause a catastrophic crash in the minimum wage to $3.50 less, almost 50 years in the future — what fantastic event could they have guessed: a comet strike, a limited nuclear exchange, multiple plagues? :-)

    By early 2007 the fed min had dropped almost in half — under performing Malthus! With population growing by half from 200 million to 300 million wages should only have dropped by a third — except for a little thing called the Industrial Revolution.

    A $15 minimum wage would only add 3.5% to the cost of GDP output: 70 million X average $8,000 raise = $560 billion out of a $16 trillion dollar economy. 3.5% per capita about what we grow every couple or so years. ($15 the 45 percentile wage — 5% at min now get full $16,000 — to get 50% of the workforce, 70 million.)

    What America needs is a big culture change — to realize what is happening to us.

    1. Denis Drew

      Almost forgot — EXTREME LOW WAGE caused unemployment:

      Where are the American born cab drivers? When I left NYC for Chicago in 1980, cab driving was a good job for a high school grad (who was willing to work really hard). From 1981 thru 1997 Chicago allowed on 30 cent rise in the mileage charge on the meter — at which 1990 midpoint Chicago:
      * started building subways to both airports
      * opened up unlimited limos
      * put on free trolleys between all the hotspots downtown
      AND added 40% more taxis — effectively putting the American cabdriver out of work (I emigrated to SF)..
      Almost forgot: Chicago mileage charge is today 50 cents below what it was raised to in 1981.

      Ditto for NYC where after the last successful taxi strike in 1974 the mileage was raised to $2.25/mile (2004 dollars). By early 2004 the fare was down to $1.50/mile — the lease system (that neutered the union) meaning that the shortfall came all out of the driver.

      100,000 out of (I estimate) 200,000 Chicago gang-age, minority males are in street gangs I presume because they wont work for a min wage that is several dollars below 1968’s, double the per capita income later.

      Half of Ferguson’s African American males are missing from the census:
      “While the problem of missing African American men is especially severe in Ferguson, young black men are absent from most U.S. cities. In the neighboring cities of East St. Louis, IL and St. Louis, about 38% and 24% of African American men age 25 to 34 are absent from their communities, respectively. On average, about 18 percent of young African American men are absent from large cities. (This calculation is based on the combined population of 33 cities with the largest African American populations, home to about one quarter of African Americans in the U.S.) In contrast, outside of large cities only about 4% of young black men are absent from their communities. The challenges posed by an absence of black men in Ferguson are problems faced primarily by larger cities.”

      To me this suggests no need to move industry to the poor side of town — I think it suggests that the poor will travel to a healthier (unionized as well as hiked min wage) labor economy. Tell a kid on the south or west side of Chicago he or she can make $600/wk flipping burgers or anything at all and jump out of their way.

      It is very inefficient to keep all theses would be productive people out of work, insufficiently educated, etc.

  14. Vatch

    Rahm Emanuel survived Garcia’s challenge, and remains mayor. Today isn’t the only time that we have discussed the relative merits of Democratic Party and third parties such as the Greens. Two weeks ago there was one of those (many) discussions, and I suggested that we would know more after the Chicago runoff mayorall election. The corporatist Democratic Chicago mayor will continue in office.

  15. amateur socialist

    Re: Seattle’s “overreach” with a $15 minimum wage: There is a good piece in the (huge) Nation 150th Anniversary Commemorative issue. (sorry couldn’t find a link to it online, may be paywalled…) In “We Built This City”, by Kshama Sawant, she detailed her eventually successful campaign to win a seat (as a socialist!) on the Seattle City Council. Good backgrounder to the current (sad) state of play there.

  16. NOTaREALmerican

    If you don’t vote Democratic those Republicans are gonna win.
    That’s all ya need to say to get the “liberals” and “progressives” to vote Democratic.

  17. Invy

    Even if the working class gets the $21-$22 min wage, it will either be inflated away or the ruling class will invest in robotics to replace workers. While there may be some needed human dexterity, in time, all entry level and many specialist jobs will be gone.

    Look at the oncoming transportation sector automation. That alone is going to wipe out an entire sector of workers, where will they go? We don’t have the job growth to absorb that, given we barely have half the monthly jobs produced for new workers month by month.

    So, minimum wage increases are NOT enough. We also need basic income, so… say the minimum wage is set at the $22 level and increases with inflation. Then for the unemployed, a basic income set at the MIT estimate for a given region as well as subsidies for moving if finding work in another area.

    It is always good to have a dream.

    1. jrs

      I could easily see it going to rent. Mostly literal monthly rent checks to the landlord, but all the other rents will get their due as well I suppose.

      Yes dream of something better than wage labor for masters we have no impact over. Got to at least dream big.

    2. jonboinAR

      If automation puts most out of work, I should think that raising the wages of the few left working would hardly cause inflation.

  18. two beers

    Could the Democrats Please Give Consideration to the Idea of Ceasing to Betray Working People?

    They could, theoretically, but they don’t need to, because you pwogs will keeping voting Blue regardless of what policies the Dims pursue.

    So why do Democrats keep kicking the left?
    I don’t know[5], honestly I don’t,

    Keep voting blue, Strether, and keep wonderin’ why you keep getting kicked.

    You “honestly” don’t know? How can you be that blind?

      1. two beers

        I’d appreciate the irony better if I saw you endorsing a third-party candidate (no, Bernie Sanders doesn’t count).

    1. Oregoncharles

      Green, not blue. And although he’s being cagy about it, I think Lambert is,t oo.

      You haven’t been reading the comments long; the last time I put in a plug for the Green Party, about 5 other people chimed in.

      1. Lambert Strether Post author

        I don’t support or endorse any political party and it’s not my place to, at NC. That said, there are some parties and a few politicians I hate less than others. I do feel an obligation to cover emergent parties, like the Greens, or the libertarians (though they seem quieter these days), and/or para-parties, like Working Families Party (sorry to be unkind, but after the Cuomo debacle….).

  19. armchair

    Bravo to the Seattle Times for calling BS on the exodus of small business restauranteers leaving town. An interesting development has been businesses moving, within King County, moving from outside the city limits to within the city limits. These businesses are voluntarily entering Seattle where minimum wages will soon be $15 an hour. Here is a quote from the linked article:

    Expedia would be the latest corporate headquarters in the region to pull up roots and head to the center city. Weyerhaeuser announced plans last year to leave Federal Way for a new office in Seattle’s Pioneer Square neighborhood in 2016. MulvannyG2 Architecture said last year it was leaving Bellevue for 1101 Second Ave. in downtown Seattle.

    I wonder where a small business like a food truck will want to park? Maybe they’ll want to park by the new Expedia headquarters, which is in a restaurant starved location? Hmmm, looks like there are a lot of hungry yuppies coming to town. So much for the $15 minimum wage, restaurant apocalypse. There are more locavores coming to town than ever before!

  20. Bill Frank

    C’mon Lambert. Betraying working people is what the Democratic party does and they’re damn good.

  21. Pedroloco

    When I try and make arguments for minimum wage, my liberal farmer friends (who also want a higher minimum wage) point out how disruptive it would be to the low wage farmworkers. Growers would let their fields lay fallow rather than try to compete in an industry of low-margins that competes in a world economy. Farmworkers would face unemployment (and they don’t get to collect unemployment benefits). How can these rural communities transition to higher margin crops when they are trying to cope with world competition, droughts, high wages, etc? Seems what works in Seattle may not translate well to the small farming communities of Eastern Idaho…..

    1. LifelongLib

      I’ve gotten similar responses from small-business friends, who ironically are in fields like restaurant supply and home renovation that are heavily dependent on disposable income. Nevertheless their focus is just on cutting costs and making payroll. The greater number of customers that would (in aggregate) result from paying people more doesn’t in their minds offset the additional costs to their particular businesses.

  22. Pepsi

    Paying workers more and treating them like human beings produces a much better result, in my experience, than paying them as little as possible and grinding their bones to make your bread.

    Every business school needs to be burned to the ground so that we can start over, with all the sociopaths safely stuck inside a volcano.

    1. MyLessThanPrimeBeef

      Perhaps the ‘original sin’ of birthing into a business school, via Darwinian competition, ruins the successful applicant forever.

      Luckily, the applicant, in most cases, is used to that for he/she would have been exposed to ‘you have to be quote-unquote, superior to survive in this ruthless world’ since preschool.

  23. sharonsj

    Much as I am furious with the Democratic Party for selling out, they are saints next to the looney womb-obsessed Republicans and their job-taking voodoo economics. Dems occasionally stand up for real people while Republicans stand up for tax breaks for off-shoring companies hiding their wealth in Switzerland. But I concur that if Dems (and Repubs) don’t start pulling their heads out of Wall Street asses, they won’t have any heads. French Revolution, anyone?

    1. MyLessThanPrimeBeef

      Only Nixon could go to China and it seems, only the democrats can neoliberalize the people, in both cases, without disturbing anyone.

  24. papicek

    Don’t anyone get your hopes up. Without price controls, there’s no such thing as a “living wage”.

    1. jrs

      I think it’s more we need to have a society with far less wealth and power concentrated in landlords and other rentiers (like the medical industry).

  25. kevinearick

    Make-work Capital sees the economy as capital versus labor, and so is establishing a global monetary function in China, to encapsulate and replace labor with machines, the New World Order, same as the old. Income is completely arbitrary accordingly. Labor’s response is nature, and determines its own income to balance at desired gravity. If the middle class wants to eat cardboard, drink sewage and breathe smog, by participating in make-work nonsense, that is up to the middle class.

    1. MyLessThanPrimeBeef

      To add to your point, at the bottom, the mantra is ‘what the market will pay,’ but at the top, it’s ‘how much the government will bail us out or trickle down to me (with my excellent network).’

    2. Denis Drew

      Imagine a simple market where cloth weavers sell their wares to clothing sewers — many individual sellers, many individual buyers. Prices set at the mutually comfortable level — as in a level at which seller and buyer are equally happy/unhappy. At what other possible level?. Came the steam looms. …

      … But wait. I heard a lecture today (by a Hathaway vice-pres yet) which described how investors in steam looms expected to recoup their money in three years and reap the bounty of mechanization for seventeen more. Only to discover of course that the bounty would be reaped instead by consumers — as competition drove prices down. …

      … Back to the post-steam loom — separate employees from bargaining directly with the ultimate consumer — labor market. It’s almost too simple to describe. Steam loom operators did not — could not — set the price of their labor at the mutual comfort level with the ultimate consumers — who benefited from the price competition noted above and could surely have afforded to pay a few extra bob. Labor’s price was set instead at bare subsistence level — take it or leave it; we can hire the next starving sod who comes along (not very comfortable). Leaving loom operators families living on oat cakes three times a day because they could not afford wheat bread (forget about meat from my readings).

      Unions in centralized bargaining labor markets tend to set labor’s price back at mutual comfort level with the ultimate consumers. There should be plenty of comfort to go around.

  26. Kevin Carhart

    What, if anything, is the interrelation between the story of the minimum wage increase, and the simultaneous story of promoting independent contractor status? According to the new Sarah Kessler piece, last summer the 1099-pushers Taskrabbit “instituted a minimum wage of $11.20, which matches the highest minimum wage in the country…”
    It is devious as hell. Now that they have winnowed their way on to the scene, they want to present an argument for good wages with reputation and trust in place of regulation.

    Kessler seems to think that the gig economy won’t last, because it’s being sued to death. But what are they going to do if they lose the suits? Will they fold, or will they just moderate and say, look, we added wage floors and insurance, aren’t we progressive now? That’s why I’m writing this on this thread- because I’m worried that people like Taskrabbit CEO Leah Busque are considered “visionaries” and “thought leaders”, and her ideas get in to the minimum wage discussion. It’s a little bit of an answer to your question, Lambert. David Plouffe went to Uber – Busque was a big Obama donor, as well as Reid Hoffman. Democrats are enamored with small enterprise instead of jobs.

    In the interest of undermining Busque’s ability to push a privatized minimum wage floor as a market-based solution, I wrote up an example of how they cheat on the other guy’s reputation system while touting their own as the wave of the future.

  27. tj

    Who needs labor?

    I’m about as far from being an economist as is possible so forgive me if my observations about this discussion are too naive. But…

    To me, a critical piece missing in most discussions of this type is the fundamental structural shift that technology has made to the relationship between labor and the cost of goods and services. We are accelerating ever faster (some say at an exponential rate) toward an economy where the cost of labor, even at current minimum wage rates is high relative to the cost of acquiring capital (automation) needed to replace it. Since technology (computers, robots, etc) continues to impact productivity at a compounding rate it’s cost of replacing human capital for either jobs that require thinking or doing is racing forward and will continue claiming jobs that humans once did at a faster pace. This will continue as long as engineers are able to double the number of transistors onto the same size chip every two years (Moore’s Law).

    If this is true, raising the cost of labor can only hasten the number of jobs lost at the low end of the wage scale as business races to exchange human capitol with technology that can do the same job better,faster, cheaper. As technology advances, it’s ability to replace labor is working its way up the wage scale. So, today in addition to Applebee’s needing a few less lower wage servers because you can now settle your own bill yourself (Applebee’s Installs Kiosk Tablets), higher end jobs like attorneys are feeling the impact as well (Armies of Expensive Lawyers, Replaced by Cheaper Software)

    Even the field of information technology is no longer going to be a safe haven. We are close to the tipping point where computers will be better at generating new software than humans. Witness the current offerings of small/medium business website SAS (Software As a Service) hosting companies where designing a website for your business is virtually drag and drop and requires no more technical skill than clicking a mouse and typing. Fifteen years ago, it would have cost a few thousand dollars and one or two developers working for a couple of weeks to get a website built for your small business. Today you can do it yourself in an hour or two. The cost? Less than ten dollars a month.

    The well intended position that we can educate ourselves out of this problem is, unfortunately, a flawed argument. It may work for the few but will not for the many as the amount of work that machines cannot do evaporates. At best, our most educated will be competing on the margins for fewer positions (Humans Need Not Apply).

    My premise is that the move to increase minimum wage, while well intended, entirely misses the mark and will only serve to both hasten and deepen income inequality as both business and government replaces human with more automation. Witness the number of parking coin collectors now being replaced in communities across the country with “smart meters”. Pretty soon, you won’t even need cops walking around ticketing cars for expired meters…. with a software update, they can simply debit your account.

    Eventually, what will be needed is some form of guaranteed livable income. A livable wage does not help anyone without a job and there are going to be fewer and fewer jobs in the world to come. A structural shift that isn’t being considered in most of the current economic and political discussions best I can see.

    1. Blue Guy Red State

      tj, look for Universal Basic Income in teh Google.

      Lefties like me worry that the GOP and similar corporate fascists will glom onto this concept as a way to finally cut social programs off completely, i.e. UBI becomes a substitute for Social Security, Medicare, SNAP et al.

      Right wingers worry that a UBI will complete the Nanny State and turn the few remaining upright citizens into slothful poors.

      Somebody will have to try this out – Finland was supposed having a referendum of some kind very soon, and some country like Estonia might give it a shot.

      I’m very big on the history of the Roman Empire and the ‘dole’ was manipulated by both the virtuous and the vile; I expect the same in the 21st century whenever it comes into being (and I see that as somewhat inevitable).


      1. Lambert Strether Post author

        This particular leftist sees the BIG as bread and circuses and the JG as a way to structure and reform the workplace democratically, setting a baseline for the rest of the economy. To caricature, but not much, BIG advocates want money. JG advocates want money and power for workers. Historically, in the US, the left has had problems seeking and managing power. Hence, the BIG, which shunts aside that question in favor of a monthly check.

  28. Ernesto Lyon

    I attended the Health Committee meeting for the atrocious CA SB277 yesterday.

    I’m a former Democrat, and I voted for Obama the first time, but I have to say the CA Dem state
    senators on the committee were a bunch of dimwits (Ed Hernandez aside). I think the majority status has made them stupid, while the GOP is getting lean and mean as the minority party.

    The Dems are a hollowed out crony party feeding on Pharma, Healthcare and Insurance money.

  29. Ben Meiklejohn

    Nice article, but you inaccurately referred to Asher Platts s state chair of the Greens. Gil Harris and Lisa Willer are the co-chairs of the Maine Green Independent Party.

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