Left Critique of the Minimum Wage

[Redness]

"By increasing the intensity of labour, a man may be made to expend as much vital force in one hour as he formerly did in two...he loses in one form what he has gained in another, and ten hours of labour may then become as ruinous as twelve hours were before."--Karl Marx

Both sides of the minimum wage (MW) debate have tended to take for granted that MW improves the terms of employment for the affected workers, the debate being primarily over the effect of that improvement on their rates of employment (unemployment, underemployment or composition of employment). Granted, MW opponents often supplement their warnings of disemployment with warnings of reductions in non-wage compensation; however, the most important and most ignored way workers return their wage increase is by increasing their own contributions. But ironically, on the rare occasion that changes in worker contribution are acknowledged, they are done so by pro-MW economists, a reflection of an across-the-spectrum fallacy: that the labor-hour costs the worker nothing other than an hour of his time. This pro-MW report is case in point, the section on "organizational efficiency" being particularly revealing.

We learn from veteran (of previous MW) managers that MW is a "quid pro quo" in euphemistic detail: "tighter human resource practices" like "adjusting employee work schedules to more tightly match beginning and ending times with customer demand" (i.e. less tightly match them with worker convenience) and more selectivity in hiring (think degree-wielding baristas); "higher performance standards" like "requiring a better attendance and on-time record, faster and more proficient performance of job duties, taking on additional tasks, and faster termination of poor performers"; and if workers don't like it, they'd better not show it, because the new regime also requires more "smiling faces" as part of a doubling down on servility known as "enhanced customer services". The worker is given agency (albeit briefly, narrowly, and under the employer-centric heading "efficiency wage&quot in the following section: "higher pay increases the cost to workers of losing their job, potentially inducing greater effort from workers in order to reduce their (now greater) chances of being fired."

Later, when evaluating the above's effect on low-wage workers, the report classifies it as "ambiguous" without explanation. Notice the selective skepticism of the worker as rational agent: Schmitt has no doubt that the wage increase itself has a positive effect (rather than, say, being squandered on lottery tickets and malt liquor); however, when it comes to the worker's preference for being less than maximally productive, the pro-MW economist will gladly consider that it is the sin of idleness rather than a wise conservation of human capital.

But to say that what the worker gains in wages he gives back in productivity would be too generous to MW, for much of MW's increase of the labor-hour's cost of production can scarcely be said to benefit anyone. Another instance of jaw-dropping irony comes in the section on employment composition. MW's increase in "transportation, child-care and uniform" costs is noted, only to be lauded as being progressive toward equality among the usual artificial demographic classes. But even if it were wise for anyone but the capitalist to pit black worker against white worker or female worker against male worker, to treat such a change in employment composition as race or gender egalitarian would be absurd; to the extent that women and minorities have greater costs of employment, MW increases their representation among the employed only to the extent that it realizes those costs that they disproportionately bear.

If MW were the only possible answer to poverty, or even the only reformist answer, its impotence would be discouraging. But luckily, there are alternatives that are politically possible and have the additional virtue of actually being effective. The basic income (or negative income tax, or citizen's dividend), for example, is not a wage floor, and thus results in neither disemployment nor the recapture of surplus by the employer via the non-wage terms of employment. Alaska, hardly a liberal state, has one that is very popular, and Switzerland will have a referendum on a national basic income next month.

[fasttense]

1. Like in the slavery debate, some people think that making capatalism friendlier to the worker

and placing regulations and controls on the system, will make the economic model more palatable to all. But like slavery, capitalism is a corrupted system; abusing the workers and rewarding criminals and tyrants. The institution of capitalism, like slavery, must be abolished all together because the corruption is built into its design.