Chicago & Why The Minimum Wage is an Issue

(This was first published on another blog I contribute to.  You can find that here.)

So we’re going to Chicago!  Right before Santa Barbara!

One thing that is really great about our school is that we have a great student organizing committee that plans and pays (not us, but we don’t have to pay for anything) to take students to make their opinions known.

This is a stock photo of Chicago.  Isn’t it fancy?

I know the minimum wage argument is a hot topic, so I will try and explain why I feel the way I do, and why I (and friends) are going to Chicago to make our voices heard about it.

So.  What is wrong with our minimum wage?  Aren’t the only people who hold those jobs teenagers who haven’t graduated high school yet?  They’re living with their parents and don’t have any expenses right?

This is an argument I hear way too often.  This to me is more of a philosophical one.  And to give a rebuttal we are going into the history of Unions.

(I’m going to paraphrase here) At the start of the industrial revolution, workers were basically property.  It was entirely legal to hire the National Gaurd and intimidate/assault/murder your employees (the Ludlow Massacre is a great example of this).  Workers didn’t have any negotiation power because the law was on the side of businesses and the wealthy.  This was before the regulation of building monopolies, so men like Mr. Rockefeller could own as much of a business sector as he wanted.  So he would buy out his competition and his employees would have no one to negotiate wages within that sector, therefore able to drive down the price of labor in that field.  (This is one of the many problems with unregulated capitalism.)  These wealthy men (because women didn’t own businesses at this time) would also basically own the town these businesses were centered in (coal mining towns); they control the cost of goods, housing, and employment.  If the workers went on strike, the businesses could levee the cost of living, basically forcing their employees to come back to work (it’s either that or your family starves).  The workers were seen as easily replaceable, so the employers didn’t care.  I would venture most people think this is inherently wrong.

So unions were formed, they told legislators that this was happening and that it should be illegal to murder your employees.  And unions did great things!  They still do!  They outlawed child labor, they got a minimum wage to exist, and workers rights to exist!  Just think how crappy work would be if we didn’t have laws protecting the worker!  We could still have kids being pulled from school to work because the minimum wage doesn’t support them being fed (it doesn’t anymore, but there’s government assisstance for that).

So what is wrong with our current minimum wage?  Well it simply doesn’t support living.  There’s also the fact that the economy has grown significantly in the past 50 years.  There is more money in our economy now than there ever has been.  So how is our money currently distributed?  Look at the graph below.  (This is from my intro to Macroeconomics class)

 

For this particular trip, we are protesting the McDonalds headquarters to ask that they pay their workers a living wage.

 

From one of my economics lectures.  Those are my notes on there. Citation:

Ruetschlin, Catherine. “Distribution.” Macroeconomics I. University of Missouri – Kansas City, Kansas City, Missouri. 28 Apr. 2016. Lecture.

So this graph should be flipped like it was a mirror image.  But technology is no bueno.  Anyway, I digress.  This graph has 5 lines, organized into quintiles.  For those not familiar with statistics, these are groups of 20% of the U.S. population.  The bottom yellow line is the income growth for the poorest people (Bottom 20% of income earners).  The Red line is what we would consider middle class (middle 20% of income earners).  That black line is the wealthy (the top 20% of income earners in the nation).  The x-axis is time in years, y-axis is money.  This graph starts in 1968 and all of the money is translated into 2014 dollars.  I repeat, this is adjusted for inflation.  As the economy grew, the wealthiest people got the bulk share of the money.  This is why we are a little peeved.

Also from an Econ lecture.  Citation:

Ruetschlin, Catherine. “Distribution.” Macroeconomics I. University of Missouri – Kansas City, Kansas City, Missouri. 28 Apr. 2016. Lecture.

On top of that, our labor output has increased.  We are working more efficiently, longer, and harder now.  Despite what baby boomers say, we are working exceedingly hard.  Output used to match up with what workers were compensated.  You can see from the graph above, that is no longer the case and hasn’t been since the 1970s.  (Red line is compensation per hour, blue line is output per hour.)

This is why we are a little perturbed.  How can people be expected to try and live their lives, save for their kids to go to college, buy a house, and be active in the economy when they are not fairly compensated?

So, we are going to the headquarters of one of the worst offenders and protesting.  We will post updates here as we get them.  Make sure you follow us on social media!  Buttons are above!

Thanks for the read!

-Rachel

Sources

“Primary Resources: The Ludlow Massacre.” PBS. PBS, 2013. Web. 06 May 2016.                        <http://www.pbs.org/wgbh/americanexperience/features/primary-resources/rockefellers-ludlow/&gt;.

Ruetschlin, Catherine. “Distribution.” Macroeconomics I. University of Missouri – Kansas City, Kansas City, Missouri. 28 Apr. 2016. Lecture.

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