By Daniel Gross, The Daily Beast
Minimum wage will rise in 2014. Photo by Noah Berger/Reuters
No thanks to Congress, the minimum wage in several states and cities will rise in 2014. That will help the working poor and lift wages for even more Americans.
Here’s my bold prediction for 2014: lots of Americans will finally get wage increases.
The obsession of large companies with low wages—even amid a record stock market, record profits, an record amounts of cash on their balance sheets—has been one of the more unsavory and frustrating aspects of the current economic expansion. Lots of businesses can easily afford to pay more. But they don’t—because they don’t have to, because the labor market is weak, because they’re obsessed with boosting profits, because labor unions are almost non-existent, and because societal and cultural norms have changed significantly. For many companies, including our biggest employers (Walmart, McDonald’s), paying decent wages simply isn’t part of their mission, or goal, or self-image.
Ultimately, as I’ve argued, the refusal of profitable companies to pay higher wages—and to refuse to even aspire to do so, or to argue that crappy wages are in fact a positive good—is self-defeating. In the U.S., consumers account for about 70 percent of economic activity. For the overwhelming majority of Americans, wages are the fuel for consumption. So if employers insist on keeping a lid on pay, they’ll find that demand for their products and services is likely to be stagnant. And, indeed, this is what Walmart, McDonald’s and plenty of other firms have discovered in 2013.
The obsession with low wages is also self-defeating, because it exposes companies to the prospect of higher regulation and scrutiny. If companies won’t raise wages, and then build a business model that presumes employees will get food stamps and Medicaid to get by, they’re essentially asking for the government to act. While President Obama has been pushing for a higher minimum wage, the Republican majority in the House has essentially ensured that there will be no action on a higher national minimum wage.
Read the full article by Daniel Gross from the Daily Beast.
