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Est. April 5, 2002
April 14, 2016 - Issue 649

Corporate America Opposes
Minimum Wage Raise, But
Many NY Businesses
Support It


"The Greater New York Chamber of Commerce,
seems to be in direct opposition to its parent
organization, the U.S. Chamber of Commerce, which
constantly calls for depressing living standards of
ordinary workers. The Greater New York Chamber
represents about 30,000 businesses and seems
to have finally seen the light."

Two of America’s highest cost-of-living states this month took legislative action to raise the minimum wage, eventually to $15 an hour, and there are businesses across New York state that feel it is the right thing to do.

Workers’ efforts to raise the minimum wage has been a years-long effort, but the past two years have seen more successful action on that score than in previous decades. And, big business doesn’t like it. Lining up to criticize a raise that will pay the bills for low-wage workers were such as the U.S. Chamber of Commerce, the National Association of Manufacturers, the National Federation of Independent Business, the American Farm Bureau Federation, and many others.

Wages, in general, have been stagnant for many years and the minimum wage has lost most of its value, to the extent that many low-wage workers need two jobs to pay the family bills. The disparity in wealth and income in the country has been growing steadily for decades, until now, that disparity has been compared to that of a century ago, when the Robber Barons ruled and had their own armies of “police” and “detectives” to ensure that workers remained a pliable lot.

Economists and trade unionists have recalled the conflict that resulted from the disparity, not only in wealth and income, but also in economic and political power at the turn of the 20th Century. The citizen-workers had little power on the job and that translated into a lack of power elsewhere in their lives. Conflict was predictable under those circumstances. But, they were the ones who suffered most, as the workers are suffering now, with little light coming from the far end of the economic-political-social tunnel.

Economists, social critics and some union leaders long have said that the rise of the union movement in the last century was the reason for strong and healthy working and middle classes, which made for a healthy economy and good social outcomes. Despite this common sense view of the nation, there has been the relentless war against workers and their unions for a half-century and from that the great disparity in wealth and income has come.

The American economy and its social structure are in crisis and everyone in power seems to be unable to see it. Those who are living through it are more than aware of it. Millions of them are desperate. The billionaires and their little cousins, the multi-millionaires, and Corporate America have kept their heads down and kept up the drumbeat of their own decline: lower taxes for the wealthy and corporations, move jobs and industry to high-profit (other) countries, keep the wages low (it gives those workers “incentive” to work harder), deregulate everything from campaign financing and environmental laws, keep the prison population high, and get rid of small farms in favor of agribusiness corporations.

All is not lost, however, because some business owners and corporations have seen the light, in New York State, at least. When the increase in the minimum wage in the state went into effect at the beginning of this month, members of Business for a Fair Minimum Wage (BFMW) hailed the increase to $15 an hour (phased in over several years), saying it “is good for business and for the economy.” Apparently, they didn’t get the memo from the big boys in commerce and industry.

Indeed, one of the biggest members of BFMW, The Greater New York Chamber of Commerce, seems to be in direct opposition to its parent organization, the U.S. Chamber of Commerce, which constantly calls for depressing living standards of ordinary workers. The Greater New York Chamber represents about 30,000 businesses and seems to have finally seen the light. Others in the organization include Ben and Jerry’s, the Amalgamated Bank, Ithacamade, Spectronics Corporation, and the Northeast Organic Farming Association of New York. All of them and many more see the justice and necessity of raising the minimum wage to one at least near a livable wage. In New York, the minimum will rise from the current $9 an hour, to $15 over several years.

The CEO of the biggest fast food chain in the nation, Subway, said he had no problem in raising the minimum wage. Frank DeLuca, who founded the company four decades ago, told CNBC nearly a year ago that a raise in the wage was warranted. “I’m not concerned,” he said. When he started his business, the minimum wage was $1.25 an hour and, if it had kept up with inflation, it would by $9.38 an hour in 2016 dollars. Before the past few years, when thousands of low wage workers and their supporters filled the streets of major cities, most fast food chains paid the minimum wage, which had a tendency to put a damper on wages throughout the economy, including the middle income workers.

One of the more interesting companies that supports a raise is Ben and Jerry’s, the ice cream company in which workers saw their minimum raised to $17.09 an hour on April 1, not four or five years from now, the period in which the $15 wage will be reached in both New York and California. “Ben & Jerry’s has paid a living wage for more than 20 years…” said Jeff Furman, Chairman of the Board of Directors, Ben & Jerry’s Ice Cream and an Ithaca resident. “This principle spares our employees the struggle of trying to make it on wages that don’t even cover basic expenses. In return, our company is spared the cost of high turnover and is boosted by greater worker morale and commitment. New York State made a significant step to increase wages over time and we should applaud those who made this happen. However, we need to continue to move aggressively towards a living wage principle while helping our small business community.”

Then, there is the Amalgamated Bank, one of the few, if not only, bank that is union-owned, which is part of BFMW. “Earning a living wage is not about politics,” said Keith Mestrich, President and CEO of the bank. “It’s about giving hardworking people a chance at a better life and strengthening our economy. Thanks to Governor Cuomo’s leadership, a living wage will be a reality. We commend the Governor, Assembly Speaker and Senate Majority Leader on a plan that will bring minimum wage to $15 an hour over the next few years, as this will allow for businesses to adjust while also ensuring workers are given the chance to succeed.”

This is happening in New York, arguably the world’s financial center and certainly one of the toughest cities in which to do business and, when the group that represents 30,000 businesses in Greater New York supports a $15 minimum, you can be sure that there is change afoot. They are learning that, when everyone does well, everyone does well. Perhaps that lesson will seep into the murky consciousness of the wealthy and the powerful. They can rein in their rabid think tanks a bit and tell them that the country is reaching a danger point, beyond which the people will not be satisfied with two or three jobs to put food on the table for their families and pay their other bills.

The Economic Policy Institute, in a report issued last year, showed that a typical worker’s pay grew 10.2 percent over the past 40 years, compensation of the average CEO increased by 937 percent. That’s where the money has gone, folks. It has gone to the 1 percent, which is buffered by, perhaps, another 9 percent of the wealthiest, and that has left the remaining 90 percent with slim pickings. It’s no wonder that parents do not have enough money to take themselves or their children to a doctor, or buy a decent house, put quality food on the table, or send their boys and girls to college.

A raise in the minimum wage is merely a start in the direction of solving the extremely difficult task of shrinking the disparity in wealth and income. That problem will not be solved easily, because the rich will not give up their access to wealth easily. Their wealth gives them power and that power is exercised against the people who work for wages, and keeping wage workers securely at the rock bottom of the economic ladder is what they use to maintain their power. It’s a vicious circle, one that is hard to break out of.

It is true that many in the 1 percent and in Corporate America are beginning to see the light and have embraced a move in the right direction, and their politicians have fallen into line. But, remember that none of this would have happened if it had not been for the people who earn the minimum wage and their supporters, massing by the thousands in the streets and demanding a raise. The next demand should be for a union and a contract, with benefits and a pension. That will be tougher than the raise, but it is a vital necessity for the well being of all workers and for the nation’s economy. Columnist, John Funiciello, is a long-time former newspaper reporter and labor organizer, who lives in the Mohawk Valley of New York State. In addition to labor work, he is organizing family farmers as they struggle to stay on the land under enormous pressure from factory food producers and land developers. Contact Mr. Funiciello and BC.




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