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A Living City Requires a Living Wage

The Huffington Post The Huffington Post 5/10/2015 Alex Cacioppo
INEQUALITY © designaart via Getty Images INEQUALITY

Hurricane Joaquin is approaching the East Coast, but a different type of storm altogether already made landfall on our cities from coast to coast, creating record levels of income inequality and wage stagnation for the vast majority of citizens. For more and more people, it has become obvious that no one working full-time should be living in poverty, and yet that is increasingly the reality for a society that was bred by the mantra of climbing the ladder of success. For the second panel series bringing together activists and analysts to discuss the most pressing issues facing the urban cores, the Museum of the City of New York hosted an event Thursday, Oct. 1 entitled "Living City, Living Wage," which explored the class struggle facing most of us.
No one on the panel described it that way, but when the top hedge fund managers receive an average compensation of around $500 million and the median national income is 1,000 times smaller, what else can one call it? The panelists -- Diana Furchtgott-Roth, a cheerful class warrior with the Manhattan Institute; Sarah Maslin Nir, the intrepid reporter for the NY Times who uncovered the nail salon industry's rampant racism and exploitation; Jessamyn Rodriguez, the owner of the social enterprise Hot Bread Kitchen; and Dorian Warren, a fellow at the Roosevelt Institute and a contributor to MSNBC -- broke down what each saw as the big problem and what to do about it.
"Everybody is interested in economic mobility," Furchtgott-Roth, who served as chief of staff under George W. Bush's Council of Economic Advisers, said. "Nobody wants anyone to be poor and stay poor." After all, she added, people have safety net programs like food stamps, public housing, and the Earned Income Tax Credit, presenting these as rungs in the veritable Ladder of Opportunity. As a matter of fact, Furchtgott-Roth, who at the start of the event held aloft her new book and shamelessly promoted it at various points, noted in a British-sounding voice, only three percent of U.S. employees make minimum wage anyway.
Warren said the one thing he agreed with her about is that one of the big problems is the lack of enforcement of labor laws already on the books, bringing up the pressing issue of wage theft that is endemic in our society. The debates more than a century ago about child labor, he added, are "very similar to those around the minimum wage," which is more or less along the lines of "you're hurting the people you're trying to help." After all, those kids in the factories needed jobs. Warren mentioned how Walmart raised its minimum wage solely on the basis of its bottom line -- when its employees make more money, they can spend more.
Nir, the Times reporter who looked embarrassed at all the adulation the audience showered her with, noting that her mother was in attendance, said of the nail salon workers -- a deep-dive story she had first pitched to the editors five years ago -- that they "did not know they were part of a system, they just thought they had an unlucky lot." Nir quoted a labor activist who told her that if a product is too cheap, someone always bears the cost. "It costs doing business the right way," Nir said.
Rodriguez, as a representative of a small business that provides paid training for mostly low-income and immigrant women trying to make it in the $1 billion specialty food industry, was reluctant to make any broad political statements about the efficacy of raising wages, noting that although she runs a social purpose business her margins are very small, adding that half of her company's operating income goes toward labor costs. It is "hard to articulate our position on the minimum wage," Rodriguez said. Nonetheless, she appeared to support it in the abstract, voicing her approval of "changing the labor dynamic in the baking industry," adding, "It's about changing the value chain."
Furchtgott-Roth, who did not get any love from the audience, agreed that "it is a moral issue of how much people are allowed to earn." She went on to say that raising the minimum wage will hurt the people it is intended to help, particularly young and minority populations. Warren seemed to radically disagree, stating that "the sky doesn't fall when you raise the minimum wage," citing studies by far-left organizations like financial giant Goldman Sachs and the realty site StreetEasy, which respectively found that wage hikes increase employment and that New Yorkers need to earn $38/hour to make the median income level. It looks like the value chain should be transformed, beyond the needs of small businesses, but politically as well.

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