The federal minimum wage has been stuck at $7.25 an hour since 2009. Several states have a higher minimum, but a predictable few, including Mississippi, Tennessee, Louisiana, South Carolina and Alabama, are stuck at that low minimum. If the minimum wage kept up with inflation, it would be at least $10 an hour today. However, 22 states are stuck on exploitation and refuse to raise their minimum wage.
Restaurant workers get even shorter shrift. The minimum wage for tipped workers is $2.13 an hour, which means they are expected to earn up to the minimum wage or more with their tips. But tips are discretionary and arbitrary; sometimes people tip the expected 15 to 20 percent, and sometimes they don’t. How can they eke out a living wage on other people’s arbitrary judgment? Were they likable? Friendly? Kind? It doesn’t matter. Did you get your food? Was it hot and delivered in a timely way? If I had my way, I’d charge enough for food to pay workers properly. Tipping is a practice that harkens back to enslavement. People should be paid for their work and not have to skin and grin to make a living wage.
In the wake of Labor Day, though, it makes sense to consider how workers experience exploitation and what we must do about it. Workers around the country are resisting exploitation, whether it is Hollywood writers or on university campuses. As of this writing, the United Auto Workers is on the cusp of a strike, which will have significant repercussions for our economy. A United Parcel Service Strike was narrowly averted, and it, too, would have weakened the economy. With labor productivity up, workers are unwilling to settle for paltry 2-3% annual increases when food and gas prices are rising by 5% and 6%. There seems to be no willingness to increase wages to keep workers “even,” and President Biden, with his “Bidenomics,” seems to see the big picture, but not the small one. People are hurting, and employers are pocketing profits and exploiting workers.
The Institute for Policy Studies released a report, Executive Excess 2023, in which they highlight the 100 companies that have the lowest pay and the greater ratio of CEO pay to median worker pay. Some of these companies have federal contracts, which means when they offer low pay to workers, they also get subsidies from the rest of us, the taxpayers who support food stamps, medical care, and other amenities that workers who earn little qualify for.
The report shows that the ratio of CEO pay and median worker pay is $603 to $1. The average CEO in the Low Wage 100 earned $15.3 million a year, while the average worker earned a scant $31,672 a year. The most significant offender was Live Nation Entertainment. CEO Michael Rufino earned $139 million, 5414 times more than the average worker who earned $25,673 a year. Amazon, a large federal contractor, is among the most exploitative. But they aren’t alone. Too many companies rip their workers off and also enjoy federal largesse.
Given these massive paychecks and massive profits, why can’t we raise the federal minimum wage, and why can’t we pay workers more? Predatory capitalism suggests that employers must extract surplus value from workers. That means that, despite rising worker productivity, employers should attempt to pay as little as they can. The outrageous CEO to worker pay ratios suggest that companies benefit from paying so little. Will workers revolt? Can they?
Too many workers are frightened to strike. They need their jobs and their unions may not have sufficient strike funds to allow them to be out for a long period of time. Do they need their jobs with exploitative terms and conditions of work? Must they work with unfair pay? Is it time for workers to unite?
What would happen if you went to your morning coffee shop to find no one there? Waited for a bus to find no driver, no bus? Managed to get to work to find no coworkers? Wandered to lunch to find no one serving? Tried to stop at a supermarket heading home to find no one working and no food available? Managed home to sort out a mess? We depend on workers but we don’t want to pay them. We agree with their labor actions but don’t want to manage inconvenience. We thought about Labor Day, but we don’t think about workers. When will we raise the federal minimum wage?
Malveaux is an economist, author and dean of the College of Ethnic Studies at California State University, Los Angeles.