Raising the Minimum Wage and Lowering the Maximum Wage

Parade through the streets upon the strikers’ victory, 1912, Lawrence, Mass. (Bread & Roses Strike)

Kawakawa, New Zealand   After decades of organizing to raise the minimum wage at the local, state, federal, and international level and winning more battles than losing, it is still frustrating to see the inequality gap increasing in country after country, as we continue to be ignored in Congress with a frozen national minimum wage and are outflanked by the rich and corporations larding one tax break after another.  All of which made me a prime suspect to be won over by an argument that we need to couple a rising minimum wage with an effort to lower the maximum wage.

Sam Pizzigati makes a heckuva of an argument for just that in The Case for a Maximum Wage. After marshalling an array of facts and figures reminding us how out of control wealth and inequality have become he takes on redistribution, not because he’s against it in principle, just that it isn’t enough to get the job done of achieving greater economic and social equality.  Partially, he states flatly that redistribution, including fair tax rates, will always be targeted politically, powerfully, and effectively by the rich. There was a time, a long time ago, mainly during the periods of war and recession, when tax rates ranged as high as 90% for the rich. In the boring and maligned 1950s, coming out of the war and recession, we were a more equal society, as was the case in other countries as well, because of the growing middle-class in the wake of more aggressive tax rates.

If redistribution isn’t enough to get the job done, something Pizzigati called pre-distribution might be worth a shot, but the real proposal he makes is that the maximum wage should be capped at no more than 100 times the federal minimum wage at roughly $1.5 million USD given the current frozen level of $7.25 per hour.  He does that while gritting his teeth, because he likes other proposals that cap the wage at ten times, but he’s trying to be reasonable.  The minimums won’t be raised more equally until the maximum’s have a fixed self-interest in assuring that is the case.

Not that there’s a chance in hell in the current political climate.  Pizzigati argues the path forward starts with corporations, given the current power of the rich.  He finds hope in various proposals in the UK and USA that force disclosure of pay ratios between top executives and hourly workers.  He wants to incentivize corporations by rewarding those on the equity team with preference for federal contracts and other state benefits, among other things.

Yes, that’s a stretch of the imagination, too, but Portland, Oregon has stepped up with an ordinance that will raise $3.5 million for the city by jacking the tax rate for corporations persisting in their commitment to enriching the executives compared to the workforce.  Initiatives in Switzerland, policy pronouncements by the Labour Party, and other cities in the USA debating following Portland’s lead are all grounds for optimism.

Inarguably, Pizzigati argues that over the last generation we have made progress on raising the minimum wages closer to living wages, but it’s a fight that is ongoing, so now is a good time to start the long march to achieving a maximum wage as well in order to achieve equality and make our society sustainable in the future.

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