The GOP Solution To Unemployment ? Slavery

In Bizarro World (A.K.A. 21st century America), the poor are too rich and the rich are too poor. Rather than pay cuts from the top, struggling and not so struggling companies choose to cut from the bottom. First it?s the ability to organize, then it?s benefits, then it?s jobs and then?when their job cuts have forced the unemployment rates to skyrocket, they make the claim that the lowest paid employees are making too much. Finally, they make the claim that the only way to boost employment is to decrease or even eliminate the minimum wage.

In an OpEd for the Boston Globe, Jeff Jacoby argues that the minimum wage is responsible for the high unemployment rate and that it hurts teens, specifically black teens. Of course, implying that African-American teens are worth less instead of?examining social impediments to jobs, like lack of transportation or the fact that employers are less likely to hire an African-American teen than a Caucasian one, regardless of pay scale.

Jacoby makes a number of dubious claims that are easily debunked in this article by Barry Nolan of the Boston Daily.

Even beyond that, I would argue that the minimum wage has been all but eliminated in five very significant ways.

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1. The scam of the independent contractor ? If you are in sales, marketing, accounting, billing, delivery or any other of a number of careers, there?s a good chance that you?ve encountered companies that ask their ?employees? to be independent contractors. As an independent contractor, you are responsible for all the expenses and liability attached to your job. You are typically paid a flat fee. From the Leddy Group:

Yet over the past few years, there has been a rise in the misclassification of 1099 workers. It has become increasingly frequent for employers to classify people as 1099 contractors when, in fact, they should be considered core employees. By calling them ?contract workers? instead of employees, companies might be trying to avoid paying their overtime, employee benefits, taxes and so forth.

By calling their employees ?contract workers,? employees are also trying to bypass minimum wage laws. No where is this practice more common than with writing careers. Some of the biggest names in blogging, such as the Huffington Post, pay the vast majority of their writers absolutely nothing. Even this snarky and defensive Jason Linkins article admits as much. A quick peruse through the site eLance.com brings up a number of jobs which pay far less than minimum wage. Part of the reason for that is that eLance, like many websites, is international. Bids are as likely to come from India as they are from the US. While an employer might not choose that bid from India, they certainly do their part in driving down the final cost. It?s not unheard of for a prospective writer?forced to take a job like this one, which tops out at $21 for eight articles.

Or there?s this one that will pay $25 for three full days? work.

While these posts are some of the most egregious examples, most are not this specific. Most posts require writers to guess what rate they will pay, but even that is beside the point. What makes these posts even more shocking is that this is perfectly legal. It?s the free market at work; exactly what the right advocates. As a result, the writers that do accept these jobs are subjected to poverty. Unless they have other sources of income, they are barely paying taxes. Their ability to become job creators is lost as they drop?from the consumer driven economy.

2. Intern abuse ? You know those college grads you keep hearing about that are having to move back home with mom and dad? It turns out that many of them have jobs, but many of them don?t get paid. Companies are turning to unpaid interns to do the jobs that were previously held by paid employees.

3. Prison labor ? Everything from chicken nuggets to military gear?are?being made by prison labor, at wages of around $.20 per hour. The rest of the money is pocketed by the owners of the private prisons who house the laborers. Many argue that prisoners don?t deserve to be paid a living wage because, among other things, they are given free room and board. While this is true, these jobs are being taken away from law-abiding citizens. That $.20 per hour prison labor is disproportionately African-American, so yes, I guess it could be argued that if the wages are low enough, African-Americans will find jobs.

4. Undocumented workers ? Regardless of conventional wisdom, it?s not the workers that are to blame, it?s the employers that hire them. As much as the Mitt Romneys of the world will pander to the anti-immigrant fervor among the Republican party, the truth is, they love undocumented workers. People who live their lives in fear of the law aren?t going to complain when their working conditions aren?t safe. They aren?t going to strike because they are paid less than minimum wage or because they have no benefits. They just do their work and take it. Undocumented workers are a libertarian dream come true.

5. Outsourcing ? If an employer hires a CSR rep in the US, the prevailing wage is around $12 per hour. That same CSR rep in India earns less than $1.00 per hour. Sure, if there were no minimum wage, they could hire an American at less than $1.00 per hour, but that American couldn?t afford to live in a cardboard box.

Are companies really so hard up that they need to pay less than $7.25 per hour? If they are, it doesn?t show at the top. Compared to 1980, the wage gap between the average worker and the average CEO has increased from 42 to 1 to 380 to 1. It?s safe to assume that if wages at the bottom rung are decreased, wages at the top will increase.

Companies aren?t cash poor either. In September of last year, the Wall Street Journal reported that non-financial companies are sitting on around $2 trillion. It?s not the $7.25 per hour that is preventing companies from hiring, nor is it regulations or Obamacare; it?s global economic uncertainty.

One thing that has been proven to spur hiring is demand. Demand occurs when people have money in their pockets. That occurs when people are paid a living wage and have a little left in by the end of the month. No company is going to hire people if they don?t have orders to fulfill, nor are they going to resist hiring needed employees over a couple of bucks an hour. While it could be argued that eliminating the minimum wage would provide some jobs (even I?m sure I could find some chores around the house if I didn?t have to pay people to do them), it can also be argued that it would hurt the unemployment rate for one simple reason, people would need to work multiple jobs just to eek out a meager living.

Follow me on my new?Facebook page?or on Twitter,?@wendygittleson

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Tags: benefits, Boston Daily, Boston Globe, independent contractor, intern abuse, interns, minimum wage, prison labor, undocumented workers, unions, working poor

Source: http://www.addictinginfo.org/2012/07/13/unemployment/

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