Community and Compensation

Everyone is born a king, and most people die in exile. 

                                                                                    -Oscar Wilde

There is great inequity in compensation for work in America today.  As a result of current financial scandals, newspapers often publish top Chief Executive Officer salaries from the business world, sometimes performing wage comparisons between that salary and that of the rank and file workers.  The ratios are astonishing.

We can see this in the recent economic boom that ended in 2000, when many people were disenfranchised from wealth and power in this country.  During the boom period the Silicon Valley newspaper, the San Jose Mercury News, would routinely publish stories about workers in the area who could not afford to live locally.  Articles were written about families with two working parents living in homeless shelters.  Another series focused on necessary public servants like teachers and police officers in wealthy Palo Alto, California.  These workers were sleeping on couches during the week, only commuting back to their families and affordable homes on the weekends.  These articles were interspersed with news of multi-million dollar stock option deals and opulent “golden parachute” packages for departing computer executives. 

Is this fair?  Don’t those executives send their children to school and call the police when their expensive homes have been burglarized?  What can we do as a society when less than one percent of the workers take the lion’s share of wages in some extremely profitable industries?

Arthur Morgan wrote a biography of Edward Bellemy, author of Looking Backwards. In that book, Bellemy advocated a single wage for all workers, a radical idea in our capitalist culture.  There seems little chance of passing national legislation requiring such a radical re-division of wages, but some progress is being made through local government and grass roots activism.  

A cautious success story in some cities, the Living Wage movement is the philosophy that workers at the bottom of the compensation scale must be paid enough to live where they are employed.  The necessary pay increases are small on one scale, often just a few dollars an hour, infinitesimal compared to a CEO compensation package. But to the underprivileged the amounts are huge, the difference between having an apartment and being on the street.    

The cover story of the July 23, 2002 issue of USA Today was labeled “Living-wage movement takes root across nation.” The subtitle was “Controversial effort aids lower-income workers,” Immediately below the headline was a chart showing two curves. The first curve displayed the actual minimum wage from 1970 to 2000. The second showed the same curve adjusted for inflation. The chart shows that the adjusted minimum wage was lowest during the decade of the prosperous 1990s, pointing out that this prosperity was not being enjoyed by the lower socio economic groups. However, the key point is the comparison of the adjusted minimum wage in 1970 and 2000 (adjusted for inflation).

                         Wage in 1970 - $7.43. Wage in 2000 - $5.15.

The article points out that you can’t survive on a job that pays minimum wage. A photograph accompanying the article shows Marlene Mendoza and her son shopping together. We learn that Marlene no longer has to work 80 hours per week since she began earning a living wage as legislated by the city of Los Angeles. She now only has to work 60 hours per week. 

The article references a book The Living Wage: Building a Fair Economy by Robert Pollin and Stephanie Luce, published in 2000.  The book describes how the living wage movement began in Baltimore in 1994, and spread  to 12 other cities within three years.  These cities have all passed similar laws setting a living wage above the federal minimum wage, and the movement is beginning to spread further.

All media stories tend to look alike, and this USA Today story is no exception. After developing the theme, the interests of “balanced reporting” must be served and to do so the article interviews business people and economic professors. The same theme occurs, as familiar to us as the litanies on the New Economy. It can be summed up simply - stupid workers getting decent pay and stupid employers paying these wages don’t understand that doing so will destroy the jobs and then the stupid worker will have no work and the stupid employer will be out of business.

This is probably the basic tenet of all of modern economics.  Economists are in some sense firm believers in the Bible, at least the passage that says, “The poor we will always have with us.”  The poor, rather than being seen as cohorts, are considered an additional natural resource, available cheaply to add value to products or services to be retailed. 

There is no need to read a complex economic text to deduct basic facts about Marlene and her compatriots in the USA Today article.  A little common sense suffices.  Eating  in the airport restaurant where Marlene works, or parking in the parking lot where Kebende Woldesenblat, also featured in the article works, would provide an opportunity to develop a few statistics. We could  watch Marlene work for a few hours, count the number of customers she serves, estimate the tab and compute her wage portion of the revenue. The same can be done for  Kebende. Assuming 60 cars an hour pass through the gate where Kebende sits, and each pays $2.50, the going rate in many metropolitan airports, then Kebende’s receipts are $150 per hour and he gets paid $6.50 per hour. If paid a living wage, he would get $10.00 per hour which means that to make the same profit above wages, the owner will have to raise the price 3%, increasing the parking from $2.50 per hour to $2.58 per hour.

This theory that decent wages destroy jobs has been put forth for many decades and the results are in - poverty is increasing and inequity is growing. (See our Web chart). It is a fairly trivial effort to counter this popular economic argument. But the economists have a backup argument, which is a sort of economic imperialism.  The theory can be summarized as the  “White (or Privileged) Man’s Burden.”  This argument acknowledges the inequity between the top and bottom groups of our society, but explains that progress and innovation come from wealthy people, and if they can’t be as wealthy as they wish,  they won’t bother to work and therefore innovation and progress will stop.  The similarities to the justifications for British colonialism in the 19^th century are chilling.

The beauty of the fledgling living wage movement is that it is a local, or “grass-roots.” Grass-roots means people take action in their community to solve a problem. They do not wait for the government to solve it, whether that government is local or national or even global. They become aware of a problem in their town or neighborhood, organize some like-minded people, and begin the work. They don’t bother writing letters that won’t be read to their congressman or congresswomen.  If years later, Congress passes a law, it is to affirm what has been created by people working on the local level.

And so, people begin to create change by working in their communities.  People begin a living wage movement, an organic farming movement, a civil rights movement, an anti-war movement.  It’s thrilling to see how successful they can be.   We can only hope that the Living Wage Movement and other grass roots campaigns will continue to spread and grow.  Such organizations may appear to be national but that is only on the surface. Movements are made up of individuals, working together in their communities.

Arthur Morgan was a supporter of the common worker.  We suspect he would see the Living Wage not as a new important benefit, but only a lack of unfairness, a simple right to dignity and fair pay for hard work, a block to exploitation.  We believe this is long overdue.