A national labor leader aims to expand the economic
fairness debate.
How about taking
a moment this Labor Day to reflect about those Americans who earn the least for
their labor?
These Americans —
workers paid the federal minimum wage — are now making $7.25 an hour. On paper,
they're making the same wage they made in July 2009, the last time we saw the
minimum wage change. In reality, minimum-wage workers are making less today
than they made last year because inflation has eaten away at their incomes.
Minimum-wage
workers here in 2012 simply can't purchase as much with their paychecks as they
could in 2011. And if you go back a few decades, today's raw deal gets even
rawer. Back in 1968, minimum-wage workers took home $1.60 an hour. To make that
much today, adjusting for inflation, a minimum-wage worker would have to earn $10.55 an hour.
In effect, minimum-wage
workers today are taking home almost $7,000 less a year than minimum-wage
workers took home in 1968.
Figures like
these don't particularly upset many of our nation's most powerful, in either
industry or government. We live in tough times, the argument goes. The small
businesses that drive our economy simply can't afford to pay their help any
more than they already do.
But the vast
majority of our nation's minimum-wage workers don't labor for Main Street
mom-and-pops. They're employed by businesses that no average American would
ever call small. Two-thirds of America's low-wage workers, the National
Employment Law Project documented in July, work for companies
that have at least 100 employees.
The 50 largest of
these low-wage employers are doing just fine these days. Over the last five
years, these 50 corporations — outfits that range from Walmart to Office Depot
— have together returned $175 billion to shareholders in dividends or share
buybacks.
And the CEOs at
these companies last year averaged $9.4 million in personal compensation. A
minimum-wage worker would have to labor 623 years to bring in that much money.
So what can we do
to bring some semblance of fairness back into our workplaces? For starters, we
obviously need to raise the minimum wage. But some close observers of America's
economic landscape believe we need to do more. A great deal more.
Count Larry
Hanley among these more ambitious change agents. Hanley, the president of the
Amalgamated Transit Union, sits on the AFL-CIO's executive council, the labor
movement's top decision-making body. He recently called for a "maximum wage," a
cap on the compensation that goes to the corporate execs who profit so hugely
off low-wage labor.
Hanley wants to
see this maximum defined as a multiple of the pay that goes to a company's
lowest-paid worker. If we had a "maximum wage" set at 100 times that
lowest wage, the CEO of a company that paid some workers as low as $16,000 a
year could waltz off with annual pay no higher than $1.6 million.
During World War
II, labor leader Hanley points out, President Franklin D. Roosevelt called for
what amounted to a maximum wage. FDR urged Congress to place a 100-percent tax
on income over $25,000 a year, a sum that would now equal, after inflation,
just over $350,000.
Congress didn't
go along. But FDR did end up winning a 94-percent top tax rate on income over
$200,000, a move that would help usher in the greatest years of middle-class
prosperity the United States has ever known.
Throughout World
War II, FDR enjoyed broad support from within the labor movement — and the
general public — for his pay cap notion. Now's the time, Hanley believes, to
put that notion back on the political table. We need, he says, "to start a
national discussion about creating a maximum wage law."
Hanley may just
have started that discussion.
OtherWords columnist
Sam Pizzigati edits Too Much, the Institute on Policy Studies weekly newsletter
on excess and inequality. OtherWords.org
