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Monday, December 09, 2013

The Fair Wage - A Mythic Dream

All the wage increases over the past 15 years have gone to the wealthiest 10%, according to the Economic Policy Institute. All of them. And almost all, 95%, of the income gains from 2009 to 2012, the first three years of recovery from the Great Recession, went to the very richest 1%.

The minimum wage has not risen since 2009 -. If the minimum wage had just kept pace with inflation since 1968, it would be $10.77 an hour today instead of $7.25. If the minimum wage had kept up with the growth of workers' productivity, it would be $18.67. And if it had matched the wage growth of the wealthiest 1%, it would be more than $28. For tipped workers, the minimum wage rate has been stuck at a scandalous $2.13 for 20 years. A raise in the minimum wage would give 30 million workers a little more money to pay for rent, food and other needs.

The median household income in the USA is about $50,000. The average household size is about 2.59 people. $50,000/2.59 is about $19,300. Assume a 2000 hour work year. Then you have $19,300/2000 hours equals $9.65 per hour. Based on these simple and fact-based calculations above, the bare minimum living wage is $9.65 per hour if you work full-time. Face the facts my friends. Even if you work full time at $9.65 per hour, you are still pretty poor.

The share of workers in "good” jobs -- paying more than $37,000 a year and providing health care and retirement benefits -- has fallen, even though workers' average age and education level have grown. And today, most job growth -- and six in 10 jobs expected to be added over the next decade -- are in low-wage fields.

Under no circumstances can a wage be fair. It is a common delusion that wages are a payment for work done. If they were this, then to the worker would go the full market price of his product. To the miner would go the full selling price of the coal less only the cost of maintaining the railwaymen, transport workers and others incidental to the transfer of coal from pit to power station . To the engineer would go the price of his product—to the agricultural labourer his. To the worker would go the whole produce of his toil, and there would be none left for profits or dividends. It is clear, then, that the wage of the worker is a part, and only a part, of his own product. Any “wage” bring only a part, is an injustice—an unfairness—to those whose labour has begotten the whole. Anything fair to the worker as producer would be unfair to the “employer . From the nature of the relation, employer and employee, there can be no such thing as “fairness” about the reward of the latter.

It is often suggested nowadays that the wage should be governed by the “cost of living” - the living wage.  One has only to ask the meaning of “living” in this connection to expose its fallacy. If  worker accepts this as a principle, they lay themselves open to all the old attacks upon their lifestyle -  extravagance, wastefulness, drunkenness.

The Citizens Wage 

Those who are not into radical politics, the basic income is an income granted unconditionally to all citizens (or inhabitants) - Citizens income or universal benefit,

Promotion of the concept of social wage invariably means arguing against fighting for pay rises, and is based on the assumption that class struggle is a bad thing; better to use the democratic process to elect social democrats to government and legislate improvements in the social wage.

“Social wage” fell out of use in the latter part of the 20th century, as social democratic parties around the world were engaged in running down health services and pensions while unions were bargaining for employer contributions to health insurance and superannuation funds.

“If workers do not only want to survive, but also want a car or a holiday abroad, it will become difficult to put pressure on employers. It is clear that trade unions will lose much of their power. The freedom not to work is very relative and is only valid when one is satisfied with a life in relative poverty. Chances are real that wages above the BI will remain very limited. An unconditional income outside of the labour market cannot influence that labour market. Contrary to the thesis that capitalism is being eroded, it is possible that one ends up with a capitalism without a labour market and that employers pass on as many costs as possible to the whole of society. It makes labour more cheap, without allowing to eradicate poverty.” said one critic

A "Citizen's Income", is defined as: "a monetary payment distributed at regular intervals to all those who enjoy citizenship and residency for a certain period of time, which allows a minimum dignity of life . . . It is paid to those of working age, for the period that goes from the end of obligatory schooling to pension age or death."

Negri supports this as he sees the demand for it as "a refusal of work and of the wage relationship". If introduced other than as some tinkering with the tax and benefits system it would indeed undermine the economic compulsion to go out and work for an employer; which of course (apart from its cost) is why it is never going to happen under capitalism. In any event, as a goal, it is a poor substitute for "from each according to their ability, to each according to their needs".

His answer is, perhaps surprisingly from someone who was associated with Militant for a while, “yes”, in the form of the scheme proposed by the Belgian social thinker, Philippe Van Parijs, for paying everyone a Basic Income as of right and irrespective of whether or not they work, referring to an article by him in a book with the revealing title of Redesigning Distribution: Basic Income and Stakeholder Grants as Designs for a More Egalitarian Capitalism. Or, as Van Parijs himself has put it:

“In classical Marxism, socialism is just an instrument for achieving the society in which people can work freely according to their abilities but still get enough according to their needs. If socialism doesn’t work, because of threats to freedom and problems of dynamic efficiency, then why not harness capitalism to achieve the same objectives?” (The Bulletin, Brussels, 19 July 2001).

It’s a pipedream of course and a bit currency cranky (though to give Van Parijs his due, he did come up with a brilliant title for one of his books in What’s Wrong with a Free Lunch?). A Basic Income paid as of right would have to be funded (even squeezed) out of profits and would either undermine the wages system (why work for a capitalist employer if the State is paying you whether you work or not?) or make no difference (since wages would fall by the amount of the State wage subsidy that a Basic Income would represent). Or it would be fixed at so low a level as to be just another name for “Income Support”.

land backed interest free currency –spent into the economy to create infrastructure, rental income to fund citizens income and public services.’

In other words, the government would get money by taxing away the rental income, real or notional, of landowners (which these days includes not just the Duke of Westminster but those who own the leasehold or freehold of their homes) and using this to pay everybody a basic income as well as to finance its own expenditure. It is not clear that this is actually an ‘alternative currency’ since the existence of rental incomes to be taxed away assumes that there already is a currency. What they seem to mean is ‘land based interest free government financing,’ which would allow the government to dispense with borrowing money.

Let it never be forgotten that a  basic income guarantee is always perfectly compatible with alienation and oppression.



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