What It Do: The Bare Minimum Alex Benson September 12, 2012 Columns Gina Rinehart, the world’s richest woman, received an inheritance greater than the GDP of nearly half of the world’s nations. So a certain lack of empathy for those who sell their lives by the hour—also known as wage workers—is to be expected. But when the Australian made headlines for callously insinuating that failing to attain millionaire status comes from lazy drunkenness—and followed up by suggesting $2 per day is a reasonable wage—the full fury of the media fell upon her. It would be a waste of ink to delve too deeply into the idiocy of Rinehart’s comments. But the manner in which the media pounced on this story is instructive. Rinehart represents an easy target. Regardless of political leanings, most people with a functional cerebral cortex know that becoming a millionaire is more complicated than simply working diligently. Otherwise, the nearly seven million Americans who work multiple jobs would have spent Labor Day relaxing on their yachts. And expecting workers to live on $2 per day is ridiculously cruel (unless, of course, those workers are African or Asian, but I digress). But what about expecting workers to live on $50 per day? Next to the Dickensian standard set by Ms. Rinehart, the figure seems positively luxurious. But Americans who make the federal minimum wage of $7.25 per hour know that amount doesn’t stretch very far. Assuming someone works full-time—hardly a safe bet for most hourly employees—they can expect to take home roughly $800 per month. Once you subtract rent, utilities, groceries, and the cost of transportation to and from work, a minimum wage worker is lucky if there’s anything left. And with an increasing number of companies forcing their lowest paid workers to buy their own uniforms and work materials, while steadily reducing what (if any) benefits are offered, many minimum wage recipients are only able to make it every month through some combination of social assistance and family support. If they are able to make it at all. In 2011, around five percent of hourly workers were paid at or below the minimum wage. That number may seem to indicate the problem is isolated to a small minority of workers. But if you include those who make $9 per hour or less, you are now talking about one in four American workers. Increasing a person’s wage from the minimum to $9 per hour results in roughly $200 in extra take home pay every month. For America’s working poor, that money makes a huge difference, but hardly equates to financial stability. And, perversely, the additional income can sometimes reduce the amount of social assistance available to workers—thus erasing whatever improvement the additional money might have made in their lives. Ever since the minimum wage was introduced during the Great Depression, business interests have stood in vehement opposition, arguing against every increase with the spectre of increased unemployment. Let the market determine the fair wage, they say, and the resulting economic boom will more than make up for lower wages. The fundamental flaw of this argument is the same fundamental flaw contained within the argument that greater corporate profits will lead to additional employment. There is not a single company—from the smallest mom-and-pop operation to the largest multinational conglomerate—that determines its staffing levels based on its profit margin. In general, a company hires the minimum number of employees required to do business. A hotel, for instance, needs a certain number of front desk staff to accommodate its guests. A reduction in the wages of its desk clerks doesn’t lead to hiring additional desk clerks. It simply leads to more profits for the owners of the hotel. It is true that a struggling company may cut staffing below optimal levels. And it is also true that the ethically-challenged engage in short-sighted attempts to inflate profits by keeping staffing low even after business picks up. But business owners who are interested in the longevity of their enterprise do not hesitate to increase staffing levels to the level needed to efficiently run their business once revenue allows for it. Despite reams of hard research supporting this logic, we still allow people to work themselves to the bone for compensation that barely keeps them afloat. Not because increasing their pay would increase unemployment. And certainly not because the corporations that employ most low-wage earners are struggling. Corporate profit margins are currently at record highs, and balance sheets flush with cash. The reason a full quarter of working Americans barely make enough money to live on is that the corporate sector sees it as advantageous for working people to remain desperate and powerless. People who are able attain financial empowerment are much less inclined to accede to exploitation. But when someone’s meager paycheck is the only thing standing between them and the abyss, they will more readily tolerate unsafe working conditions, draconian scheduling policies, and whatever other toppings their employer piles on the shit sandwich known as their job. Instead of wasting time on the foolish pronouncements of easily pilloried villains like Gina Rinehart, the media should be focusing on the real life injustice faced by a staggering number of American workers. But that would require the corporate-owned media to honestly confront the greed at the core of modern corporate culture. I won’t hold bother holding my breath. Leave a Reply Cancel Reply Your email address will not be published.CommentName* Email* Website Save my name, email, and website in this browser for the next time I comment.