Over at In These Times, United Steelworkers president Leo Gerard has an opinion piece in which he purports to explain “Why the GOP Really Fears Minimum-Wage Hikes.”
Republicans in America suffer a crippling anxiety. It’s the terrible fear of corporations paying poor workers too much.
I don’t have any special claim to understanding why Republicans do the things they do, but this is at least plausible, in the sense that Republicans might be craven servants of business who want to prevent corporate owners from paying too much. Unfortunately, Gerard’s argument very quickly degenerates into lies and confusion.
The GOP is so afraid that the nation’s lowest wage earners will get a raise that Republican politicians across the country are working overtime to outlaw wages above $7.25 an hour for these workers.
That’s simply a lie. Nobody is trying to outlaw higher wages for workers. Under any of the laws Gerard describes, employers can pay employees as much as they want. What he’s complaining about is something different:
They’re passing legislation forbidding towns and counties from raising the minimum wage in their jurisdictions. Republicans insist: no pay bump for those raking in $15,080 a year!
That second sentence doesn’t follow from the first. From his own description, Republicans aren’t preventing workers from getting raises, they’re preventing small government units from forcing businesses to give workers raises. Businesses are still free to give pay bumps if they want to. They just can’t be forced to do so above and beyond the state minimum wage.
On the other side, however, there’s no amount of pay, perks, private jets, premium health plans and golden parachutes that Republican politicians believe could possibly be too much for a CEO.
As long as the corporate owners are okay with paying their CEO a crapton of money, I don’t see why it should be Republicans’ business. Or Leo Gerard’s.
That Oracle CEO Larry Ellison took home $78,440,657 last year is completely reasonable in the minds of Republicans. That it would take a minimum wage earner 5,201 years to earn what Larry took out of his company for one 365-day period is, according to Republican-think, a morally correct calculation.
I don’t see what Larry Ellison’s paycheck has to do with minimum wage laws. I suppose you could argue that if Oracle wasn’t paying him so much, they’d have more to pay their workers, but Oracle has 120,000 employees, so that’s only about $654 per employee, which works out to about 33 cents per hour over the course of a year. I suppose that’s something, but it’s not much.
Also, the reason businesses pay minimum wage workers so little is because that’s the wage the workers are willing to work for. I don’t see how reducing the CEO’s salary would change the amount the workers are willing to work for, so I don’t see how it could raise their wages very much. (Wages are the result of bargaining, and having an extra $78 million in cash might hurt the business’s bargaining position a little, so there might be a small benefit, but as I said, it’s not much.)
That is why Republicans are working so hard to prevent Walmart and McDonald’s workers from earning more money while, at the same time, doing nothing but congratulating Time Warner Cable CEO Rob Marcus for grabbing $79.9 million for six weeks of work.
Same argument, same problems. In fact, the whole rest of the piece is pretty much that argument repeated over and over: Republicans aren’t raising the minimum wage, and corporate CEOs make too much money. Although some versions of the argument are sillier than others:
[…] they believe James A. Skinner is worth every penny of the $28 million McDonald’s paid him in 2012.
They don’t believe that there are a dozen Wharton School MBAs who could take his place tomorrow and, frankly, sell hamburgers just as well for say, $280,000 rather than $28 million. They don’t see how his excessive pay might affect dividends to shareholders or the cost of fries.
Look, I think a lot of CEOs get more money than they’re really worth because of agency problems in corporate governance — I think the people who decide CEO salaries are not acting in the best interests of the shareholders — but replacing them with a bunch of MBAs is just nutty. And if paying them so much doesn’t bother the shareholders, why should anyone else care?
There may be good arguments for raising the minimum wage, but this isn’t one of them. Gerard’s argument is little more than an appeal to envy.