The headline caught my attention. “PA Chamber fighting proposed minimum wage increase.” The more I read the article the more I felt compelled to respond.
First let me say I have been reading the 2012 book “The Price of Inequality: How Today’s Divided Society Endangers Our Future.” It’s written by Joseph Stiglitz, a Nobel Prize winning economist who teaches at Cornell University. Suffice it to say he knows what he is talking about.
In his book, Professor Stiglitz points out how deregulation and tax cuts since the Reagan Administration have favored the rich and corporations and created the income inequality we now have. It was the lack of regulation that lead to the Great Recession in 2008 where regular folks lost their homes and their retirement savings while the big banks and finance companies used some of the billions of bail out dollars they got from Uncle Sam to pay bonuses to their CEOs. Despite being predatory, these lending institutions knew the government would bail them out. None were indicted.
In a recent meeting, Gene Barr, CEO and president of the Pennsylvania Chamber of Business and Industry told our local chamber members that his organization plans to fight Governor Wolf’s proposal to raise the minimum wage from $7.25 an hour to $12 an hour. He said the recent tax cut “…was a great illustration of how it’s supposed to work. (The) Federal government allowed you to keep more money, you as business people.” He added that “right after that happened, you saw a litany of companies that was reported, who’ve offered raises, who’ve increased minimum wage, the starting wage for their people. That’s how it’ supposed to work.”
I would like to see Mr. Barr quote his sources. Walmart raised wages and immediately closed stores and cut staff. According to Fortune magazine, the Walmart pay raise had nothing to do with the tax cut. Other companies gave one-time bonuses, but that’s it. The bulk of the tax cuts are going to corporate profits and to the CEOs and shareholders. Warren Buffet (who opposed the tax cuts) says his company stands to make $29 billion more dollars this year. I seriously doubt that will find its way to the workers at the bottom.
This tax cut, one of many since the Reagan Administration, is nothing but smoke and mirrors to make the rich richer. In his book, Professor Stiglitz highlights the inequality that has been created. What regulations we have were written by a government that is bought and paid for. As Professor Stiglitz notes, it’s no longer the old adage of “one man, one vote,” but “one dollar, one vote.”
This latest tax cut is meaningless for the average person but just enough to pacify, at least for now. The other shoe hasn’t dropped. No one is talking about the budget deficit, which is expected to dramatically increase next year as a result of the lack of revenue. How does our government plan to avoid that? On the backs of our children, the poor and the elderly.
House Speaker Paul Ryan has stated that he’s looking at cuts in education, health care and Social Security. That’s right – as the super wealthy get richer and corporations give big bonuses to management and shareholders, regular people will see cuts to programs that will far outweigh any benefit they got from the “tax reform” and then some.
Back to Mr. Barr’s comments, he also stated, “We don’t get prosperous through government.” Actually, that’s wrong on many levels. First, as Professor Stiglitz pointed out, deregulation and business-friendly laws have, indeed, helped the rich get prosperous through government, or rather, a lack of government.
Secondly, government oversight and regulation after World War II did lead to the rise of the middle class and a more prosperous nation. Then Reagan came and it began to change.
Finally, if the government is operating, as it should, it ensures a level playing field for all. That doesn’t exist right now. There is no American Dream anymore, no chance to improve one’s status because all the cards are held by the small percentage of people who control the wealth of this nation and the people who govern it. Even small business owners face an uphill fight against big box stores and online behemoths like Amazon who benefit the most from deregulation.
So the PA Chamber is opposed to raising the minimum wage from $7.25 to $12 because, according to Mr. Barr, the minimum wage is an entry-level wage for young people entering the workforce. However, a 2015 Congressional Budget Office report stated 88 percent of the people who would be affected by the minimum wage boost are at least 20 years old and half are over 30.
Over regulation and taxation can be bad, but so is under regulation and taxation, which is where we are now.
Our local chamber is made up of good people, and I hope they take this message from Mr. Barr with a grain of salt and do the right thing for their workers, as many of them already do.
In the end, all of us will benefit.