You have to give it the corporate elite in this country for their crafty effectiveness in convincing a large percentage of the working poor and the debt-ridden middle class to parrot economic talking points that work in direct opposition to their best interest. A marketing coup made possible with the support of much of the mainstream media establishment at the national and local level.
Winthrop Quigley gives us the latest supporting example this week in an Albuquerque Journal column, “Minimum wage hike won’t fix income inequality.” After relaying some points from a recent report by the UNM Bureau of Business and Economic Research (BBEE), which paints a bleak picture of the state of income inequality in New Mexico, Mr. Quigley treats us to the slyest of condescending head pats and assures us that there is no need for a minimum wage increase because of simple supply and demand economics in a world economy. With the affability of a likeable uncle and a peppering of confident economic-speak, it’s an exercise in cognitive dissonance to register the trite fantasy of his logic.
Quigley states, “Contrary to some populist opinion, you don’t get rich by making other people poor.” To support this assertion he uses two of the rarest and most disruptive companies in history to make his point:
Henry Ford gave his factory workers better pay than other manufacturers because he reasoned a better-paid workforce would be better able to buy cars, thereby further enriching Henry Ford. Bill Gates’ fortune was made possible by millions of people with enough disposable income to buy the computers that required his operating systems and applications. A more affluent population, quite simply, is good for business.
Ironic examples given the U.S. manufacturing base has been decimated by deregulation policies that allow companies to utilize slave labor in other countries. Microsoft factories are known to employ teenagers abroad who work 15 hour shifts for less than a dollar an hour. If that’s not getting rich by making other people poor, what is?
Quigley cites the BBEE report in relaying New Mexico’s “thin labor market” where the state has “one of the lowest concentrations of people with bachelor’s degrees in the country." Are we losing home-grown innovators who are pivotal in changing the future economy of this state through their talents that we can foster or are we losing the prime robotic class for the next multinational behemoth we can lure here? Perspective is everything.
“Most research shows that free trade on balance is good for the world economy, but there’s no question that it comes at the cost of jobs.”
Yes, free trade is good for multi-national conglomerates because it allows them to treat national sovereignty and labor rights as quaint notions of the past in pursuit of maximizing profit. Twenty years ago, the Quigley’s of the world were lauding the predicted benefits of NAFTA. Nearly 700,000 lost jobs later, the Quigleys of the world are giving us a smiling shrug.
Young New Mexicans with bachelor’s degrees aren’t fleeing the state because there’s not more tax-incentivized big fish like Intel and Hewlett Packard, both of which seem to be floundering. They’re leaving because there’s a lack of investment going into home-grown companies. There’s not many entry-level positions in quality, locally established businesses. Sen. Tim Keller has recently introduced legislation to address the “brain drain” from the cream of our state’s graduates.
It’s interesting that Quigley’s minimum wage logic isn’t applied to corporations coming to New Mexico looking for subsidies. If the minimum wage for a company is the cost of doing business in this state, why are we constantly “raising the minimum wage” for large corporations by throwing tax incentives their way? When it’s minimum wage workers, we hear that ‘government shouldn’t be in the business mandating policy on business owners,’ yet when it’s corporations looking for a handout, citizens are expected to graciously and eagerly fund a pittance of jobs while watching locally generated revenue transferred immediately out of state.
Quigley continues with a nod to the myth of the invisible hand of the free market:
A lot of people believe government should raise the floor on income by increasing the minimum wage.
If only it were that easy.
The real average wage of the American worker has been almost stagnant since the 1970s because of technology and automation, according to Larry Summers, a Harvard economist and former Treasury secretary. For decades, the economy globally and domestically has been finding more ways to substitute capital for labor. Therefore, capital is rewarded more generously than labor. Those who control capital reap higher and higher rewards. Those who labor reap smaller rewards. This is simply supply and demand.
A real, live Harvard economist? A Treasury secretary to boot? Wait a minute, wasn’t Larry Summers one of the key architects of the deregulated banking environment which caused the implosion of the U.S. financial system leaving millions unemployed and “destroying some $13 trillion in wealth according to the GAO”? Quigley could of made him sound even more important by noting that he was the President of Harvard from 2001-2006, but then he might have had to mention that Summers was essentially canned after “losing some $2 billion in Harvard endowment funds to a derivatives deal gone bad.” Just the kind of guy we should be listening to about the “real average wage of the American worker.”
The stagnant state of wages for the average worker took hold in the late ‘70’s because of the uptick in deregulation and privatization efforts in this country. The trickle-down shell game never trickled down, nor was it ever intended to. The pure, unadulterated ebb and flow of the market has always been a fantasy void of the constant variable of greed, the most predictable of variables.
Quigley assures us, “The law of supply and demand is one of the most inflexible in the world. Sadly, higher minimum wages and an end to free trade will not repeal it.” So inflexible that the finance, insurance and real estate sector spent $6.8 billion on lobbying and campaign contributions from 1998-2011 to craft its inflexibility.
The danger in Quigley’s simplified PR is that it turns real humans into disposable cogs in an international money-making machine that’s proven to increase economic inequality. No innovative thought with the concept of human lives in the equation, just an assured pat on the head with a deference to a Harvard economist charlatan. For those of us who’ve been paying attention to national finances in recent history, the logic is laughable. For the single-mother working full-time trying to put food on the table for a family, it’s painful.
(Image derived from photo by John Liu)
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