For economists, the debate about whether technology or globalisation is responsible for capital's rewards outpacing those of labour is crucial, complicated and unresolved. One school, which blames globalisation, argues that the rocketing profits and sluggish middling wages of the past few years are the long-lasting results of trade, as all those new developing-country workers enter the labour market. This school says that technology helps workers by increasing their productivity and eventually their wages. The opposing school retorts that technology does not increase wages immediately, and some sorts of information technology seem to boost the returns to capital instead (think of how much more a dollar's worth of computing power can do these days). And it questions whether Western incomes will remain flat: recent wage rises in America and pay claims in Europe and Japan may start to reverse the balance back away from capital.
It has been pointed out repeatedly in dissident media that even when the new minimum wage increase is fully implemented (over the next two years), it will only amount to a roughly $15,000 annual salary for a full time, 52-week-per-year minimum wage worker. This is actually thousands less than the US government estimates to be the national poverty level for a family of three, and as you'll see, even this number represents a significant miscalculation. In 2007, the official federal poverty rate (measured in terms of annual income) for a family of three is $17,170 as set by the Department of Health and Human Services; this poverty rate, nonetheless, is calculated primarily on the basis of the minimum cost of three meals a day, not taking housing, health care, transit, clothing, and other basic necessities of a decent modern life into account. Paul Street notes this, citing an Economic Policy Institute study that calculates these additional costs and accounts--as the federal rate does not--for geographic variations in the cost of living, establishing what it calls the 'basic family budget'. In Casper, Wyoming, Street notes, the basic family budget is $24,948. One would be hard-pressed to find a lower-cost location, and nonetheless the basic family budget is over 50% more than the federal poverty rate. Street also quotes Martin Luther King's 'Time to Break a Silence' speech: “a nation that continues year after year to spend more money on military defense than on programs of social uplift is approaching spiritual death.” Spending on violence and the injustice it defends, as is obvious, is nowhere near spending on peace and justice.
So, full-time minimum wage work ever after the new minimum wage increase is less than the federal poverty rate and significantly less than the real minimum cost of living (note that, still, Republicans and many in the business press are kicking and screaming). What does this mean?
The new minimum wage increases still maintain government sanction for extreme sub-poverty wages. The optimism of the "opposing school" referred to in the Economist article would seem to be somewhat misplaced; the so-called "balance", by design, will remain strongly on the side of capital, and the nominal tweak by the Democratic Congress will not be enough to meet the minimum requirements of almost any minimum wage earners. Can we even discuss "balance" while nearly 50 million people in the world's wealthiest political/economic unit have no health care? Or while the government congratulates itself for raising a subpoverty wage to a slightly higher subpoverty wage? Or while nearly a quarter of the federal budget is spent on violence (as opposed to the mendacious figure of 4% of total GDP bandied about by dime-a-dozen hawks in government and "free" press)? Or while nearly 16 million in said political/economic unit live in deep poverty?
This is wage slavery without even the minimal, self-serving frills imagined by Henry Ford. And a supposedly progressive Congress is pushing it and taking credit for it.