Friday, January 9, 2009

G.W. Bush's Treasury Secretary's words on STIMULUS: hike minimum wage!

On page 195, of The Price of Loyalty: "We are looking at every [stimulus] instrument that's ever been used and some that haven't been... ...O'Neill said. Among the options on the list, he said, are increases in the minimum wage, a "supplement" for people who pay no income taxes, and a reduction in the capital gains tax." (my emphasis)

This was G. W. Bush's first Treasury Secretary Paul O'Neill -- supporter of privatizing Social Security --on how to avoid recession, post 9/11.

Doubling the federal minimum wage would toss 350 billion the way of bottom 40 percentile earners -- those now earning below the $500/wk.

Since Michael Harrington wrote "The Other America", in 1968, 25% of our labor force has slipped below the minimum wage of that era ($400/wk adjusted) -- though average income has doubled since. To me this should be taken as an even more significant emergency than the looming 9% unemployment.

Minimum wagers wont get the whole raise in one jump. Will they get it in time to help ward off recession? Raise the incomes of those above 40 percentile by realistic unionization -- which can only mean sector-wide labor contracts, mandated by law -- and enough will get enough to at least help ward off recession.

As Ezra Kline recently pointed out, the card check may only produce unions which employers will ignore, which employers will refuse to bargain with. Under sector-wide: no contract = no legal work (at least it can be written that way). That should imply no scabs: the whole and entire marketing function of unionizing is to force the employer to bargain only with those employed now, not with everyone passing by on the street -- not just to make bargaining with everybody who passes by on the street more inconvenient.

If up to 90% of our workforce is expecting phased in raises (proportionately more the lower the current wages) over the next couple or three years, consumer confidence should be enhanced as much as anything can enhance it.

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