Tags: Blodget | Barro | low | wages

Yahoo Daily Ticker Debate: Should Corporations Boost Low Wages

By    |   Thursday, 08 August 2013 07:59 AM

Striking fast food workers have reinvigorated the debate over low wages. The Daily Ticker's Henry Blodget says corporations should simply share more. But Josh Barro, politics editor at Business Insider, says the nation needs public policy and that companies need to stay focused on profits.

Last week, fast food workers in major cities took to the streets claiming they are barely making enough to survive. As a result, they demanded employers hike their pay to $15 hour, Fox Business Network reports.

Meanwhile, the Bureau of Labor Statistics released an employment report showing that hourly wages declined last month, the first drop in about a year.

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Wages as a part of the economy are at the lowest levels in history, Blodget tells Yahoo Daily Ticker.

"If American corporations were not earning record profits, we wouldn't be having this conversation," he says. "But they are. Corporations need to simply share more. It doesn't need to be socialism. It doesn't need to be legislative. It just needs to be decency."

Fast-food workers in New York City earn an average salary of $11,000 annually, less than half the average daily salary — $25,000 — for most fast-food restaurant CEOs, according to Fast Food Forward.

Employees in the $200 billion industry make 25 percent of the money they need to survive in New York City, the organization asserts.

But some say that labor, like other things, is a function of supply and demand. Barro tells the Daily Ticker that wages rose in the 1990s due to competitive hiring, not altruism.

"I think there is an obligation within society to create broad prosperity, but it's not an obligation that exists specifically between employers and employees," Barro argues. "And if you draw that link too closely, it almost makes people dependent on the company they work for."

Barro warns that America's idea of wealth and prosperity should not be based on system where people are "indentured" to their employers.

But increasing wages would benefit more than just individual employees, Blodget claims. It would serve as a boost to the economy because low-wage workers would spend their earnings.

Barro says paying workers more to stimulate the economy is "a public good" and that employees may spend their additional earnings, but much of it will go to other companies.

"We need public policies aimed at increasing wages," Barro explains. "We need a monetary policy that is aimed at creating full employment. I want the government to be involved so that we don't have to depend on the private sector to do anything other than create profits for shareholders."

Over the past 30 years, capitalism has been redefined so companies have a unilateral concern — the bottom line, says Blodget.

"We don't have to define capitalism as each company being as greedy as it possibly can and paying people as little as it possibly can so the CEO and senior management team and shareholders can run all the way to the bank. It doesn't have to be that way," he tells the Daily Ticker.

Editor’s Note: 75% of Seniors Make This $152,000 Social Security Mistake (See Easy Fix)

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Striking fast food workers have reinvigorated the debate over low wages. The Daily Ticker's Henry Blodget says corporations should simply share more. But Josh Barro, politics editor at Business Insider, says the nation needs public policy and that companies need to stay focused on profits.
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2013-59-08
Thursday, 08 August 2013 07:59 AM
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