Wayne O'Leary

Minimum Effort on Wages

When it comes to progressive legislation, the approach of the Biden administration and its centrist allies in Congress has become transparently obvious. The cat is out of the bag, if, indeed, it ever was in the bag in the first place.

Here’s what we know eight weeks into the new Democratic era: Party progressives, for all the talk of their supposed influence over the White House and its agenda, will have precious little input during the upcoming two years. Joe Biden plans to follow the Obama playbook of hewing closely to the middle of the road, deferring to the moderates in his congressional caucus, and making nice with Republicans in search of that long-lost political holy grail, bipartisanship.

What gave the game away was Biden’s instant, unquestioning acceptance of the Senate parliamentarian’s “advisory opinion” that the $15 hourly minimum wage should not be part of any COVID-relief package passed under budgetary reconciliation. Enacting the measure any other way would, of course, require 60 votes in the Senate unless the chamber’s arcane filibuster rule were ended, which the president, along with centrist Sens. Joe Manchin (D-W.Va.), Kyrsten Sinema (D-Ariz.) and Diane Feinstein (D-Calif.), opposes.

Democratic centrists made their position on the minimum wage abundantly clear when a forlorn (but highly symbolic) effort was made by Bernie Sanders and other progressives to enact the $15 minimum, which was left out of the COVID bill, as a separate item. The requisite supermajority was never there, but seven Democratic moderates and one independent chose to gratuitously rub progressive noses (and those of underpaid workers) in their futility by joining Republicans in voting “no.”

The infamous centrist eight — remember their names — included Carper and Coons of Delaware, Shaheen and Hassan of New Hampshire, Manchin of West Virginia, Tester of Montana, King of Maine (the lone independent), and Sinema of Arizona. Sinema chose to put a special exclamation point on things with an insulting thumbs-down accompanied by a sarcastic curtsy for the cameras.

So America’s working poor are left with only the recourse of pursuing any added job compensation through collective-bargaining agreements, assuming they first manage to unionize.

The latter will be a steep climb. Since 2012, three states (Indiana, Michigan and Wisconsin) have been added to the antiunion “right-to-work” rolls, and when it gets the chance, the 6-3 conservative Supreme Court will likely affirm the constitutionality of a national right-to-work law.

In addition to endorsing Republican dismissal of a $15 minimum wage, the Democratic centrists, led by Manchin (the new Susan Collins), did their best to aid the GOP in weakening other aspects of their party’s COVID rescue legislation. Preemptively negotiating themselves down, or as observers have termed it, “signaling moderation,” centrists forced their colleagues to eliminate stimulus checks for families over a certain income level and to cut by a quarter the amount of additional unemployment insurance money going to the long-term unemployed.

The president himself was amenable to these gestures toward bipartisanship, and has gone further. A future cancellation of student debt totaling up to $50,000 is off the table, he’s said, and his new Treasury Secretary Janet Yellen has announced (presumably with White House approval) that a Warren-style wealth tax is not in the administration’s plans.

But it’s Biden’s stance on the minimum wage that’s really betraying his essential centrism. He’s nominally for the $15 minimum, but open to getting there very gradually or settling for considerably less in the name of bipartisan compromise, far short of the firm Sanders position and a hint that third-way triangulation may be on the horizon. The Biden view of the minimum-wage increase is reminiscent of the Obama approach to a health-care public option; that is, it might be nice, but it’s not worth fighting over and precipitating disruptions in institutional cordiality. Settle; by all means, settle.

Meanwhile, low-paid workers have to wonder if the president has their backs. He’s verbally supporting the organizing effort of Amazon employees in Alabama, and that’s good; however, it’s not enough. Top US corporations are doing exceedingly well in the pandemic economy. Amazon, for example, reported a 70% rise in earnings during the first nine months of 2020, increasing its profits $5.8 billion over a year earlier. For employees, it’s a different story. Giant retailer Walmart pays half of its domestic workers less than $15 an hour, typically $11 for new hires, barely a living wage.

Raising the national minimum to $15 would benefit 17 million lower-paid workers, according to the Congressional Budget Office. Another 10 million earning slightly over $15 would realize a positive spillover effect. Hysterical business predictions of massive job elimination (a forecast also made when the initial US minimum wage was enacted in 1938) would, the Economic Policy Institute (EPI) adds, be highly unlikely.

To this country’s everlasting shame, the national minimum wage, which applies primarily to industries engaged in production or sale of goods in interstate commerce and large retail, service or construction enterprises — intrastate commerce is mostly covered by state minimum wages — has not been raised since 2009, half a generation ago. It languishes at $7.25 an hour, 12th among economically advanced countries, as measured in American dollars, and behind 29 of the 50 states.

Until 1968, the federal minimum wage, adjusted for inflation, kept pace with labor productivity, increasing eight times, or every three to four years on average; regular increases continued through 2009 (14 in all), but failed to match rising productivity. By 2014, the EPI calculated worker output increasing at nearly three times the minimum wage. Meanwhile, the national inflation rate has risen 21.5% since low-wage workers received their last federally mandated pay increase.

The minimum wage at issue was originally enacted into law June 24, 1938, under the Fair Labor Standards Act (FLSA), reestablishing the workplace features of FDR’s National Recovery Act invalidated by the conservative Supreme Court three years earlier. It was the product of Democratic New Dealers supported by organized labor and passed over the strenuous objections of Republicans, big business, and low-wage interests in the South.

The FLSA, a point of pride with Roosevelt, who considered it second only to the Social Security Act among his domestic accomplishments, also established the maximum 40-hour week and time-and-a-half for overtime; it’s purpose, FDR said, was “to end starvation wages and intolerable hours.” Today’s Democrats must guarantee no less.

Wayne O’Leary is a writer in Orono, Maine, specializing in political economy. He holds a doctorate in American history and is the author of two prizewinning books.

From The Progressive Populist, April 15, 2021

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