Part I:

40% of American Workers Earn Less than Full-Time Minimum Wage Employees in 1968

August 7, 2013

When adjusted for inflation, American workers are making less today than in 1968. In 1968, minimum wage was $1.60. We scoff at this today, but when adjusted for inflation, this is equivalent to $10.74 an hour today. If you earn $10.74 an hour and work 40 hours a week, your salary would be $22,339.20…before taxes. That’s barely enough to make ends meet. According to the Social Security Administration, 40.28% of all workers make less than $20,000 a year. In other words, 40% of workers in the United States today are making less than what a full-time, minimum wage employee made in 1968.

Good paying jobs are becoming a thing of the past, and part-time minimum wage jobs are becoming the new normal. The recession created a quick lesson for CEOs that were looking to survive in the declining economy. To survive, they had to up worker productivity, while also cutting back on employees. The problem is, while the economy is starting to improve, CEOs learned they can do more with less, and are not hiring back employees.

“Thanks to our very foolish politicians American workers have been merged into a global labor pool where they must directly compete for jobs with workers on the other side of the planet that live in countries where it is legal to pay slave labor wages. This has resulted in millions upon millions of good jobs leaving this country. Big corporations can pad their profits by taking a job from an American worker making $15 an hour with benefits and giving it to a worker on the other side of the globe that is willing to work for less than a dollar an hour with no benefits. Our politicians could do something about this, but they refuse to do so. Most of them are absolutely married to the idea of a one world economic system that will unite the globe. Unfortunately, the U.S. economy is going to continue to lose tens of thousands of businesses and millions upon millions of jobs to this one world economic system.

Secondly, big corporations are replacing as many expensive workers with machines, computers and robots as they possibly can. As technology continues to advance at a blistering pace, the need for workers (especially low-skilled workers) will continue to decrease. Unfortunately, the jobs that are being lost to technology are not coming back any time soon.”

Manufacturing jobs are becoming a relic, and the service industry is rising up. And 76.7 percent of the jobs created, have been part-time. And if this is not upsetting enough for you, while workers wages have decreased, the price of everything else has increased. From USA Today, “In the years between 2002 and 2012, real median wages dropped by at least 5% in five of the top 10 low-wage jobs, including food preparers and housekeepers.”

Household income has also fallen. When adjusted for inflation, median income has fallen 7.8 percent since 2000. And the ratio of GDP to household income in near an all time low.

Americans are struggling to make it day-to-day, and Republicans are looking to make it even harder. A common narrative on the Right is that Americans are lazy. This is not saying much for a country they claim to love. The fact is, Americans are hard-working. However, they have little to no control over their wages. And while it is easy for Rush to say find a new job, the fact is, many times employees are trapped in their jobs because their wages are so low. They are literally too poor to leave their low paying job.

All of this is putting a hardship on our economy. In 1979, there was one American working for every one American on food stamps. Today, there is one American working for every four Americans on food stamps. We have an obligation in America to help each other. It is why we live in a society. It is why we pay taxes. However, as Americans are taken advantage of by Corporations, Republicans at the same time want to undercut funding to the very programs that puts food on the tables for many people. It is un-American.

Walmart has been discussed at length in the past. We have seen how even went as far as to threaten to pull plans for three new stores in Washington D.C. if they pass a bill requiring a livable wage. The bill, pass in June by Washington D.C. city council, is called the Large Retailer Accountability Act. It requires “big box stores,” those with more than 75,000 square feet and $1 billion in annual sales, to increase minimum wage from $8.25 to $12.50 an hour. The bill now goes to Mayor Vincent Gray, who must decide to pass or veto the bill.

Chicago faced the same bill in 2006. They would have required big-box retailers to pay their employees $10 an hour plus benefits. Then Mayor Richard Daley ultimately vetoed the bill, paving the way for Walmart to take full advantage of Chicagoans. To date, Walmart employees 2,000 employees. But their low wages have set a low bar for other companies, and poverty is still rampant in Chicago.

Chicago Alderman Anthony Beale said to Bloomberg, “These are not jobs where you can pay a mortgage or raise a family. I am a supporter of a living wage. But without Wal-Mart, my site would still be vacant.”

Needless to say, Walmart is vehemently opposed to the legislation. In an op-ed piece published in The Washington Post, Walmart executive Alex Barron wrote, “This legislation is arbitrary and discriminatory…It discourages investment in Washington.” Are you ready for that? Paying their employes a livable wage is arbitrary and discriminatory. What I find arbitrary and discriminatory, is placing stores in low income areas, then feeling your employees should feel privileged for their minimum wage job.

Company spokesman Steven Restivo said, “Local governments should adopt policies that encourage job creation and economic development rather than create arbitrary hurdles that create an unlevel playing field.” Yes, local governments should sit back idly as their citizens are taken advantage of by a multi-billion dollar conglomeration. If Walmart was raising the bar with wages, or selling goods that were made in America, I would see the justification in having a Walmart open in my neighborhood. But they add nothing to the playing field but low wages, which produce even more citizens on public assistance.

If Walmart is the epitome of how not to treat your employees, Costco is the shining example of how businesses can treat their employees well, pay them a livable wage, while still being extremely successful.

When Wall Street is unhappy, it usually means good news for Americans. And Wall Street is extremely unhappy with Costco. Founder, and ex-CEO, Jim Sinegal created a corporation that focuses on their business, and not how others want to run it. Wall Street analyst’s assert that Mr. Sinegal is overly generous not only to its employees, but also to its customers.

The average pay of an employee at Costco is $17 an hour. They receive an “extra-paycheck” bi-yearly for an additional $4,000 a year. After five years, the average Costco employee makes $40,000. Further, employees only have to pay roughly 10 percent towards their benefits, while others in the industry pay 25 percent or more towards their benefits.

The CEO, on the other hand, has an income of just $350,000. He also received an additional $200,000 bonus. That means that he earns less than 10 times more than his average employee. And it puts at less than 10 percent of many other chief executives, though Costco ranks 29th in revenue among all American companies.