Now, you forget simple supply and demand! Workers can unionize, band together, and generally less will work if wages decrease. If there are 500 shoe manufacturers who need shoes made, then each factory will one-up the other to get more workers until a market wage is reached. Economists agree, the absence of a minimum wage helps the workers who make it, in the long run! Can you imagine the mass rioting, the strikes that would (and should!) occur if wages weren't enough! And don't start talking to me about the gilded age what-not, because it was entirely government supported artificial power to industry!
Wages down, prices down, buying power of poor up!
Except shoes aren't being made here. Manufacturing is being shipped overseas to countries where minimum wage is nil in comparison to the US (if there is one at all), where environmental regulations largely don't exist (Beijing is covered in a cloud of smog so thick you can see it from space
), and where workers are willing to put in 12-hour days for coins in their pocket and a song. It's largely agreed today that the US economy is based around service, not manufacturing. And this decision wasn't made on a whim - it was made entirely rationally and logically, which is the real diabolic thing about it.
As for unions? Take a look at Scott Walker and Wisconsin, and then also the McDonald's protests. If a union exists for a profession, the captains of industry are trying to break it up - if it doesn't exist, then they try and keep it from being. Quite simply put, a union doesn't exist to serve the needs of the company - it exists to serve the needs of the people who work for that company. And the people up at the top have determined that a union hurts their profit margin, so it has to go.
As for wages? They already aren't enough. More people than ever are on government assistance - food stamps, housing, health care - and the private sector sees no reason for their personal gravy train to stop. But at the same time, a good number of the people who represent corporate interests in Congress simultaneously call for reduced government assistance spending and lower minimum wages. It can't be both ways. To paraphrase Bill Maher - if Colonel Sanders isn't going to pay its workers a living wage, then Uncle Sam has to make up the shortfall.
Prices? It's always been within the power of the industry to set prices. The common argument against raising the minimum wage is that prices will just go up, so why bother raising it? I think it would be very telling to ask those same people, "well, if we decrease wages, then prices will go down, right?"
I would imagine the silence after that question would be nothing short of deafening
. Because I have a hunch that prices wouldn't go down if wages decrease. They would stay right where they are. Because it is the industry's prerogative to set prices
. Take McD's. A basic cheeseburger costs a dollar and change, and the current federal wage is $7.25 an hour. Let's say that number goes up to...$12 an hour. (Not quite the $15 they want, but better than now.) That cheeseburger can still cost
that dollar and change. The difference is that the profit margin of McD's will decrease. The whole argument about raising prices in response to raising wages is based on the assumption that profit remains the same
. But it doesn't have to. Profit, and the quest for it, is overemphasized in our corporate culture today - the more profit you make, the more successful you are. Or so the common perception goes.
That isn't true in the slightest. A company that makes $1000 in profit is just as successful
as one that makes $1000000 in profit, or one that makes $1000000000 profit. But we've become convinced - or at least, an influential portion of us - that money is the measure of success. Not a
measure - the only one that matters.
Industry needs to be reigned in. Industry needs to understand that its welfare is dependent on the welfare of the people who make it - the secretaries and line workers, not the besuited persons of the boardroom. If people do not possess the power to buy something, then they won't buy it
. And what that starts is basically an economic 'death spiral.'