Billionaires and the minimum wage
Ah, the contradictions of capitalism. You can’t get away from them.
Capitalist bosses want to pay their workers the lowest wages possible. They also want to sell their products for the highest prices possible. This is the source of the class struggle and of the fierce competition among capitalist enterprises and groups of enterprises.
It is also the source of capitalist crisis. How can you sell if people can’t buy? Credit is one way, but there always comes the day of reckoning.
California’s Gov. Jerry Brown on March 28 announced a deal with leaders of the State Legislature to pass a law that would raise the minimum wage in the state from the current $10 an hour to $15, to be phased in over six years. This comes after a vigorous campaign waged by unions and other workers’ organizations — which include many immigrants, workers of color and women, often single mothers, who usually get paid the least.
The reaction by the bosses is of course mixed. Those paying low wages are fiercely opposed to it, even though it won’t take full effect until 2022. Others, who want to be able to sell more of their products, are grudgingly agreeing to it — hence the acquiescence by a section of the capitalist political establishment.
And then there are those among the wealthy, be they owners of enterprises or the idle rich living off inherited wealth — and there are many of those enjoying life in sunny California — who are scared by the prospect of a rising militancy among workers that could cost them even more in the future.
The struggle won’t end here, of course. The bosses will continue to find ways to squeeze more work out of the workers and will look for ways to cut their wages at the same time. That’s the nature of capitalism. Opponents of the law have said it will cause layoffs. That doesn’t have to happen, but the bosses may make it happen just to spite the law. We should see this as a limited victory, which will make a difference only if it inspires greater struggle for even bigger wins in the future.
A March 29 New York Times article about car manufacturing and sales in China contained an amazing fact, yet it was just a phrase in one sentence: “The buyers are not just China’s college-educated, white-collar elite, but also the beneficiaries of the country’s roughly eightfold growth in blue-collar wages in the last dozen years.”
So blue-collar wages in China today are eight times what they were a dozen years ago!
This reflects the enormous growth in productivity as People’s China has developed a modern industrial base. Most of that growth has gone to raise the people’s standard of living. Productivity here has also grown tremendously. Yet workers’ real wages here peaked in 1973, more than 40 years ago! All the growth in productivity since then has benefitted only the rich, turning millionaires into billionaires. And creating today’s in-your-face inequality.
China had a revolution. We need our own revolution to free up our economy. It’s as simple as that.