American Indeceny

President Kennedy, whose raising of the US minimum
wage in 1961 led to the Super Great Depression of the
1960s and the economic ruin of America.

The US Census Bureau's annual report on income and poverty released this week was covered in the media under a weird diversity of headlines.  Everyone seemed to focus on something different as its most important finding, or at least, its news (or ideological) hook.  In fact, the changes indicated in the report were very small.  But as John Cassidy wrote in the New Yorker, that's really its news significance.  And in a longer-term context, it explains a lot about our current political deadlock, its vociferous quality, and in particular a reason President Obama isn't getting the usual credit for an improving economy.

Though some measures of poverty declined and median income was up slightly: "There is a long way to go before ordinary Americans are able to recover the losses that they suffered during the recession. Median household income was eight per cent lower in 2013 than it was in 2007, when the recession began. And the poverty rate in 2013 was two percentage points higher than it was in 2007.

These figures may help to explain why so many Americans refuse to believe that the economy is recovering, and why President Obama’s approval ratings are stuck at near-record lows despite falling unemployment and accelerating G.D.P. growth." 

Yes, most Americans are better off than they were four years ago, or even six.  But not seven.  It's not just the pace of growth that's the problem, Cassidy writes.  It's who has benefited, and who has and has not been benefiting for a long time. "The central message of the Census Bureau figures is that the same trends that have been roiling the American economy for the past twenty-five years—income stagnation and rising inequality—continue to have an impact."

According to Cassidy:  "When spending power is rising broadly, benefitting most social, geographic, and income groups, it is much easier to get rival political parties and factions to coöperate. Consensus politics can thrive, as they did in the postwar era. But when most people’s incomes are stagnating, and have been for decades, politics become darker and more fractious."

While those many who aren't seeing gains and may be slipping back might fight among themselves for what little there is, the few at the top "have a big incentive to get more involved politically," to stifle any policies that in the short term might take any of their disproportionate gains away.

"To oversimplify a bit, income stagnation paired with rising inequality is a recipe for political polarization and, under the American system of divided powers, political gridlock, which is what we have. Based on the latest Census Bureau figures, there’s no sign of that changing anytime soon."

We can see conspicuous effects of this in for example the virulent opposition to even the idea of climate change paid for by fossil fuel gazillionaires.  We also see it in the scandalous opposition to a modest rise in the US minimum wage.

I can recall the same doomsday cant being promulgated in 1961 about President Kennedy's proposal to raise the minimum wage to a horrifying $1.25 an hour as I hear now on the proposal today to raise it from $7.25 to $10.10 an hour.  William Finnegan (again in the New Yorker) chronicles the many times between these two proposals when the minimum wage was raised, and those who opposed it trotted out with a straight face the same dire predictions of economic disaster and worse, that were predicted for previous raises but never happened.  Usually the opposite.

Finnegan quotes the original principles behind the minimum wage as articulated by FDR in language too bold for us some 80 years later: “No business which depends for existence on paying less than living wages to its workers has any right to continue in this country...By living wages, I mean more than a bare subsistence level. I mean the wages of decent living.”

Finnegan checks data that shows how "depressingly modest" the $10.10 proposal actually is--yet Republicans have made it a sacred mission to defeat it.  In what should have been (and may yet turn out to be) congressional Republicans' "49% moment," Senate minority leader Mitch McConnell was recorded telling wealthy donors that when the Republicans get the Senate majority, there won't be any minimum wage nonsense in Congress anymore.  Other speakers revived the talk of something in the direction of,  but not really a living wage as a major step to fascism, communism and the rule of Satan.

Even if this federal minimum wage were to become law, it would not be big enough to put much of a dent in rampaging income inequality.  Citing figures from a recent study, Finnegan concludes: "Raising the minimum wage to $10.10 would increase the income of at least sixteen million workers. It would not lift anywhere near that many people out of poverty. The proposed hike would ease present hardship, not abolish it. It would be a move in the direction of “the wages of decent living”—a performance, one might say, of decency itself."