Monday, September 2, 2013

Bare Minimum

Since today is Labor Day, it seems appropriate to note that what was lost in last week's Eleazar David Melendez piece in the Huffington Post on the 1949 minimum wage increase was the role played by American labor.

Melendez rightly notes that the Truman administration and its conservative opponents compromised to reach the agreement to increase the minimum wage, but fails to note what motivated Truman and the Democrats to push so hard for the increase: the desire to fulfill at least one of its promises to labor.

Most union members made far more than the minimum wage in 1949--despite the fact that the final bill raised the minimum from 40 cents to 75, the average wage increase for most workers was only 5 to 10 cents, since most workers earned more than the minimum. Yet labor made it a priority because it saw itself as representing all workers, and believed that an increase in the minimum wage would have a ripple effect that would ultimately benefit all workers.

Politically, labor mattered. In his 1948 campaign, which many political observers dismissed as futile, Truman had run on a platform that pledged two major things to American labor: an increase in the minimum wage (which Truman had first asked for in 1945) and repeal of the anti-union Taft-Hartley Act of 1947, which passed the Republican-controlled Congress over Truman's veto.

In his State of the Union address in January 1949, Truman had called for repeal: "At present, working men and women of the Nation are discriminated against by a statute [the Taft-Hartley Act] that abridges their rights, curtails their constructive efforts, and hampers our system of free collective bargaining.... That act should be repealed!"

The reality, however, was that Truman lacked the votes to repeal the act, despite the fact that Democrats had regained control of Congress. The conservative coalition of Republicans and southern Democrats made it impossible.

What was possible was an increase in the minimum wage, and Democratic leaders in Congress quickly gave up on Taft-Hartley repeal and focused instead on that instead. While labor wanted $1 an hour, Truman had asked for "at least" 75 cents while also dramatically expanding (perhaps by 5 million) the number of workers covered by the law.

Predictably, conservatives tried to derail the proposal--but not by using today's obstructionist tactics. They actually proposed an alternative: limiting the increase to 65 cents an hour, indexing the wage to inflation, and eliminating the expansion of workers covered. Truman and the Democrats held firm on 75 cents, and Majority leader John McCormack made that number a matter of party loyalty, citing the 1948 platform. But they accepted the fact that they could not get both an increase in the wage and an increase in coverage, and accepted a bill that, in the short run, actually reduced the number of workers covered by the law.

That compromise led to a 361-35 vote in the House in favor of its version of the bill (this is the vote I referred to as "extraordinary" in the Melendez piece--he mistakenly attributed my statement to another 186 to 116 vote and has not responded to requests to correct the record).

What makes that vote extraordinary is that there were only 263 Democrats in the House. In other words, a large number of Republicans voted to increase the minimum wage.

Contrast that with today's conservative orthodoxy resolutely which resists any increase in the minimum wage. Sunday's Spartanburg Herald-Journal made a typical free-market argument: "The federal minimum wage is an artificial control on the market system" which "will only spur businesses to raise prices and cut jobs." They acknowledge that inflation has eroded the real value of the minimum wage, but reject the idea that this is any reason to increase it.

For the last 30 years, conservatives have resisted increases in the minimum wage, effectively lowering the wage when accounting for inflation. The minimum wage reached its height in 1967, when it was an inflation-adjusted $9.79 an hour. In fact, from 1962 to 1979, the minimum wage was always more than $9.00 an hour. Beginning in 1980 (coinciding with the start of the Reagan era), it began a steady decline, reaching an inflation-adjusted low of $6.59 in 2007.

That finally prompted the Democratically-controlled House in 2007 to pass an increase. They had the votes to do it alone, but a mere 6 years ago, 82 House Republicans also voted to increase the minimum wage. Can anyone imagine today's Republican House members casting such a vote?

The fact that President Obama's current proposal to increase the minimum wage to $9.00 an hour seems dead in the water is testimony to how reactionary today's Republicans have become. That rate today would only restore the minimum wage to where it was at the end of 1961. Despite a general nostalgia for the America of 50 years ago, in this one respect today's conservatives do not want to go back.

It is no coincidence that the erosion of the minimum wage parallels the decline of the power of the American labor movement. Ronald Reagan famously broke the air traffic controller strike in 1981, and it would be 9 years before the minimum wage increased again (it had increased 7 times in the previous 9 years). It is also no coincidence that the same period has seen a marked redistribution of wealth upward.

In 1979, when the minimum wage was an inflation-adjusted $9.33, the bottom 99% controlled 79.5% of the national wealth; in 2010, it was down to 64.6%.

Raising the minimum wage is one of the tools we have to try to maintain the kind of balanced economy that produces widespread prosperity. Today's conservative refusal to use that tool betrays an reactionary agenda that seeks to enhance, rather than alleviate, the trend toward maldistribution of wealth.

For all of its well-documented faults, American labor was a countervailing force that balanced the power of corporate America from the mid-1940s to the late-1970s, to the benefit of all Americans. Its decline in the decades since has led to a distorted, winner-take-all economy which is incapable of maintaining balanced, long-term economic growth. It may be impossible to revive the American labor movement, but it is imperative that we find a political substitute to play the role that unions once played in American political life.

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