It says a lot about North Carolina, doesn't it, that state Treasurer Richard Moore could get so much political mileage from his modest suggestion that we raise our minimum wage? I mean, it's not like he said we ought to have health insurance for everyone, or decent housing, or even equal education opportunities. No, all he said was that anyone who works in North Carolina ought to make at least $6.15 an hour, which is a buck more than the current state and federal minimum.
For this, Moore was hailed in newspaper editorials ("a worthwhile cause," Greensboro News & Record; "compelling arguments," Asheville Citizen-Times), saluted by progressives ("welcome news," Chris Fitzsimon, N.C. Policy Watch), and even better from his standpoint, excoriated by conservatives ("more pandering," ex-Jesse Helms hand Carter Wrenn said on his Talking About Politics blog).
Which is, like, so cool for a guy who wants to be elected governor in two years, as Moore, a Democrat, does. But what makes it really awesome for him is that he made his pitch at a forum sponsored by N.C. Citizens for Business & Industry, and around here that's considered just brash ("demonstrates political flair," Winston-Salem Journal; "it takes moxie," The News & Observer).
I believe I even said of Moore, on our Indy blog, that he merits "a plus mark" for telling business people to their faces that they have some responsibility for the common good.
Still, it's only by the pathetic standards of our Bush-league, Tar Heel politics that a proposal to raise the minimum wage so little, and so late, could be seen as so bold and so brave.
It's been nine years since the federal minimum was increased 50 cents to $5.15 an hour. Annually since then, Congress has brushed off attempts to move it up. So 17 states have acted on their own, including a lot of "blue" ones (California, Connecticut, New York), but some "red" ones as well (Florida, Virginia).
Washington state currently has the highest minimum wage at $7.63 an hour (a figure set using an inflation index); Oregon is next at $7.50.
But last year, the N.C. General Assembly balked at Greensboro Rep. Alma Adams' bill to raise our minimum to $6.15, and even when she came down to $6, the Democrat-controlled House of Representatives passed it, but the Democrat-controlled Senate didn't.
And where was Gov. Easley on the issue? He was crowing that Site Selection magazine picked us No. 1 in "business climate," a ranking held the prior year by Bush-league Texas. "Texas?" Easley huffed. "We can do everything they can do about 25 percent cheaper in terms of labor, capital expenditures and land acquisition."
Yup, we're cheaper 'n Texas when it comes to payin' our labor, by gum.
No wonder Moore stands out.
Moore's remarks last week should be viewed in the context of the week's major business event, which was IBM's decision to stop funding defined-pension plans for its employees. In full-page newspaper ads, IBM explained that while its 125,000 retired employees would still enjoy old-timey pensions, the company could no longer afford them for all of its current 300,000 workers. So, like everybody else, it's switching to 401(k)-style accounts.
"Global competition," IBM said, equals "changing realities" for every company and every worker.
Time was, of course, when long-established American companies competed with each other for labor. So they paid higher wages, if they could, and better benefits, and to keep their most experienced workers from jumping to the competition, they guaranteed ever-more generous pensions the longer you stayed around.
Now, however, as companies come and go and production shifts to Third-World labor markets, it's foolish to think that even the biggest corporations--even IBM--could afford to say now what they will pay a retiree 10 or 20 or even 30 years from now. Will they even exist?
So you're lucky if they put money in a retirement account for you, but after that, you're on your own--and good luck investing it, hear?
Similarly, American companies are shedding health-care benefits at a rapid rate because the cost of health care in the United States is increasing by double digits per year while in China companies don't even think about paying for health insurance. The percentage of full-time American workers with employer-supplied health insurance is now under 60 percent (it was almost 65 percent as recently as 2000); 19 percent of them have no insurance at all.
In short, the days of benign employers who "take care of their people" are numbered in America--to the extent they ever really existed at all.
Meanwhile, the requirements employers face from government are minimal and under attack. They are, for the most part, required to contribute to Social Security, but the Republicans would like that to be an employee responsibility, too. They must maintain workplace safety standards, but inspections are scant, as last week's coal mining tragedy in West Virginia illustrated so tragically. They must contribute to workers' compensation funds lest their employees be injured on the job, and to unemployment compensation funds lest they be forced to lay off workers, but neither program is generous in any way.
And no company is required to offer health insurance. Indeed, when the Maryland legislature, reacting to news that hundreds of Wal-Mart employees there are paid so little that they qualify for the state's Medicaid program, voted to make all companies with more than 10,000 employees (meaning, that is, Wal-Mart) either pay for health insurance or give the money to Maryland, Republican Gov. Robert Ehrlich vetoed the bill.
Nor, it must be said, is any company, big or small, required to share its profits with its employees. Nor pay them a dividend if, one day, it's bought out or sold. Nor do they, with few exceptions.
No, the profits belong to the shareholders--the owners--who pay taxes on them (the portion they can't shelter, anyway), but at rates far lower than they once were in this country.
The result of this free-market approach is that business owners and executives are doing quite well, thank you, by buying their labor abroad, or in Texas and North Carolina. But the grunt American worker is not.
Census data, according to the Economic Policy Institute's analysis, show that the real (inflation-adjusted) income of the typical American household has fallen for five straight years, through 2004, despite the fact that four of the five were growth years for the economy.
The median household income, $44,389 in 2004, dropped almost 5 percent in that period; during the same period, average incomes for the top 5 percent of earners increased about $4,000 a year, to $264,387.
And if you work for the minimum wage of $5.15 for 40 hours a week, that adds up to the princely sum of $10,712 a year. According to EPI, that's about one-third of the average working wage in the United States, its lowest level since 1949.
In North Carolina, a "living wage"--one you could live on--would be at least $12 an hour, according to the N.C. Justice Center, and for a family of four in a metro area like the Triangle, it would be even higher: Two adults and two children living in Raleigh need at least $44,256 a year to buy life's necessities, the Center says, which means both adults would have to work and earn $10.64 an hour each. Can't afford it? True, these are all averages and medians. What about the kid who works for minimum wage, but his parents are loaded? What about the guy whose little business is so shaky that paying his people another buck an hour could force him to close?
Well, good for that kid, but most kids who work for minimum wage are from poor households, or--as Moore said--need the money for college. And half the people who work for minimum wage are over the age of 25.
As for the business owner who can't afford to pay it, frankly, he shouldn't be allowed to employ people if he can't pay them more than a sub-poverty wage.
But most of them, to say the least, can afford it. Why in the world would they say that they can't?
The social contract in this country is fraying. Rich folks say they're over-taxed while people who work for them are struggling to make ends meet. Treasurer Moore calls it a moral issue, how we treat each other, and he's right. It's also a moral issue for the Democratic party, which used to say it was for working people, but now competes with the Republicans to be pro-business instead.
The minimum wage is just that: a rock-bottom minimum. It's the least a business should pay. It's the least that government should require. That we can't even do that in North Carolina says a lot, doesn't it?
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