October 2014
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The high cost of low wages

By Galen Larson

"The owner, the employees, and the buying public are all one and the same, and unless an industry can so manage itself as to keep wages high and prices low it destroys itself, for otherwise it limits the number of its customers. One’s own employees ought to be one’s own best customers." – Henry Ford

In 1914, Henry Ford decided to hike the hourly wage of his workers to $5 from about $2.34. Economists, newspaper reporters, and pundits all thought he was crazy. But his idea worked. His employees were happy, turnover was low, and more and more of them were able to buy cars and become part of the growing middle class that was making America stable and prosperous.

Now, I wonder: Where are the owners like Henry Ford? What has happened to this great Christian nation when we allow the 1 percent to garner all the profit, and reduce the 99 percent to poverty?

Our forefathers brought us out of the Great Depression, fought and won wars on two fronts, educated the returning veterans, and went on a building spree second to none to provide decent homes and automobiles for the masses.

We were the pride of the world. We contributed to those in need without a whimper. Our health care was decent and affordable. Wages were good, profits and investing were within reach of all. We respected our form of government as there was none better, and we were proud of it.

Now we have a government run by our real welfare recipients, who do nothing for the 99 percent but are in the pockets of the 1 percent. They spend most of their time raising money (why does it take $2 billion to get elected to a $150,000 job?). Then when they leave office they can become lobbyists looking out for the high doughners (yep, I’ve got that spelling right). Like dough they can be molded into any shape. We, the foolish 99 percent, nobly go vote for the lesser of two evils. This is no one’s fault but our own.

We look down on those who have to work two jobs at minimum wage without benefits to put food on the table. As I write this, fast-food employees are striking to get $15 an hour, as they can’t support a family on minimum wage. The ridiculous answer from fast food is that wages should grow in small increments. Well, where have these supposed increments been for the past years? Since 1978 the real value of the minimum wage has dropped by 25 percent.

Here are some more statistics. When you look at minimum wage as a percentage of a nation’s median wage, the United States is near the bottom, with 38 percent. Only the Czech Republic and Estonia are below us.

Meanwhile, the salaries and profits for the CEOs and corporate icons have increased by hundreds of percents over the decades. Instead of demeaning those trying to support their families, we should support them in demanding that those on the top provide a salary they can live on. No matter how smart a CEO is, he cannot run his corporation and pay dividends to investors without labor.

When this country was at its zenith, labor had a living wage. What was wrong with union-made and “Made in America”? Unions bargained for 40-hour work weeks, vacation time, safe working conditions. In the short history of this nation, the only time it was prosperous was when the middle class had good jobs with decent wages, paid their fair share of taxes, and owned local businesses both large and small.

Think you are getting a bargain when you shop at a big-box store that pays its workers slave wages? How long will it take for people to wake up to the fact that we taxpayers are subsidizing those greedy companies? The low-paid workers spend most of their meager earnings right back in the store – shades of the mining-company stores of the past. Then the taxpayers subsidize them through food stamps, health care, housing, and other benefits so they can have decent living conditions.

The corporate-owned mass media tells us that our corporations pay the highest tax rate of any nation. The truth is, after using all the loopholes provided by our tax code, their net cost in taxes is 12 percent – that is, if they haven’t established residence in some offshore mailbox so as to pay even lower taxes. We ordinary citizens do not have access to such loopholes.

But wait, you say, they create jobs. So do we the taxpayers – and good-paying ones, I might add. Who pays to build roads, bridges, military equipment? We the people and due to the Davis-Bacon Act the wages and benefits are decent.

As we found out in the last recession (brought to us by the corporations and banks that made money on a misguided war and the chicanery of the mortgage giants) many people were put out of their homes by crooked money lenders. Yet no one went to jail for all this fraud and mismanagement. If you or I committed fraud we would be getting a striped facial tan looking through the bars.

Oh, by the way, those fast-food purveyors of diabetes, heart disease, etc., make their employees pay for their food. Now one American fast-food corporation is buying the Tim Hortons doughnut corporation located in Canada and moving its headquarters there as the taxes are lower. Then they have the gall to say it was not for tax relief. What’s the matter? We can’t make good doughnuts here? Corporations do not care about God or country (but will use both to sell their product). If they did, they would pay a living wage and buy American.

We pretend we ended slavery in 1865. But letting people work for wages they can’t possibly live on, trapping them in poverty, is tantamount to tolerating slavery.

Galen Larson writes from Montezuma County, Colo.


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