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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McDonalds’ Sweetheart Deal with New NLRB Gets Fried

New Orleans   McDonalds’ strategy of stiff arming its workers, having its legal staff pursue frivolous delays to run out the clock on the Obama Administration, and do anything and everything to avoid taking any responsibility for its franchisees finally ran into a road block at the hands of the NLRB Administrative Law Judge.  The ALJ, Lauren Esposito, rejected a settlement by the new NLRB General Counsel, saying in her decision that it was not “a reasonable resolution based on the nature and scope of the violations alleged and the settlements’ limited remedial impact.”  For fast food workers and the rest of the service economy, this is huge, though it’s likely not over.  Nonetheless, the situation changed from “the fix is in” to a real shot at winning once again.

This story is the NLRB equivalent of the Trump “travel ban.”  Days before a long-awaited trial on a series of serious complaints of unfair labor practices against McDonalds that had been triggered by the work of the Fight for $15 Campaign, supported by the Service Employees International Union, a newly appointed NLRB General Counsel, who is the chief staffer for the board, asked for a delay to pursue a settlement with McDonalds.  A newly appointed NLRB General Counsel, who is the chief staffer for the board, asked for a delay to pursue a settlement with McDonalds.  The company had a million opportunities to settle for years but was clearly trying to run out the clock in hoping for a more favorable climate for its business, regardless of its law breaking, so in the same way that no one really believes the travel ban was not about Muslims, no one would ever believe this so-called proposed settlement was going to be a win for workers.

The real issue is of course the degree of control corporate McDonalds had over its franchisees.  The company claimed they were essentially “strangers in the night.”  The workers and anyone who has walked into a cookie-cutter McDonalds anywhere in the US and most of the world, knows they are indistinguishable, and that goes past the menu to the uniforms and work rules and kitchen procedures.  The Obama-era General Counsel who had issued the complaint held the whole corporation responsible for the action of any of its stores and its franchisees for their labor practices.  This recommendation went to the heart of the franchise model for McDonalds and all of its wannabes in that world.

A settlement is not supposed to be approved by the NLRB or the ALJs unless it gives substantial relief in an approximate way to what might have been won as compensation and correction in a trial on the merits of the complaint.  Usually, the company’s lawyers in a settlement negotiation will draft their wish list, but the fact that the charging party or union has to agree and that the NLRB is supposed to be the arbiter of fairness in the exchange, means the settlement is in the range of reasonableness.

Everyone would have bet the ALJ was under immense pressure here to cave on the standards but looking closely at the fact that the General Counsel was allowing corporate McDonalds to guarantee nothing, including that its franchisees would actually post the notice and live up to the terms in order to protect its franchisee fiction was clearly a bridge too far.  The ALJ then rejected the proposed settlement as inadequate.

Victory is still not assured for the workers, but with the judge’s actions, at least the fight became fairer for the workers again, In this day and time, that’s a victory in itself.

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