Fair Day's Wages Summary

What does “a fair day’s work for a fair day’s wages” mean to you?

Fair wages for a fair day’s work is a simple concept, the wages must be commensurate with the task being performed as well as enough for a reasonable individual to survive. Franklin Roosevelt developed the first minimum wage in the United States occurred in 1938. The first minimum wage was set at .25 cents, which doesn’t sound like very much; however, in that time it would be equivalent to $4.00 in today’s money. Many conservatives vehemently object to the need for a minimum wage and even insist it drives away jobs.

The additional arguments made in this regard is that hurts the economy by raising cost on corporations. Fair wages actually help the economy rather than hurt it;

one major example of this is Henry Ford, Ford began his motor company with the model-T, after many months of inactivity, Ford asked his secretary why more of his workers didn’t own his cars. The secretary responded that they couldn’t afford them. Ford then hit upon the idea of paying the workers more, after which the model-T achieved record sales throughout the United States. The primary obstacles to a fair wage is the “Trickle Down Economics” theory, this theory in principle states generating greater wealth at the top of the economic ladder, in turn will generate greater wealth at the bottom. After 30 years of trying this theory the gap between the rich and the poor has never been wider in American history.

Article: Should the Middle Wage be Raised by Jared Bernstein and Kevin Hassett
This article pits two leading economists against each other with opposing arguments for both raising and maintaining the minimum wage where it is now.

Jarred Bernstein argues in favor of raising the minimum wage he cites many positive aspects to raising the wage as well as how the cost for such an increase can be offset in a variety of ways, without the necessity of mass firing or even a hiring freeze. Kevin Hassett argues from the point of view that raising the minimum wage will help some and harm many more. The article presents a point comparison of the issue and each one of the points is placed side by side. The reader gets to choose which economist they prefer, however the article conveniently omits points that are proven such as the Ford Motor company from it, so it deals almost entirely in

abstractions.

Article: The Return of Fair Pay by James Surowiecki
This article is much more substantive than the previous article and it even cites a modern example of how raising wages can be beneficial.

Wages in the U.S. economy have remained flat even when corporations have made record profits; one company, Aetna which raised the minimum wage from 12 dollars to 16 and even added additional medical benefits to the mix. The article also argues that there is a direct correlation between economic growth and equal pay by citing statics from the 1950’s economic boom. The article uses a very good quote which sums up the authors case very clearly, “If you pay people better, they are more likely to stay, which saves money; job turnover was costing Aetna a hundred and twenty million dollars a year. Better-paid employees tend to work harder, too,” (James Surowiecki, New Yorker). The article sums up by stating that there is no economic imperative for corporations to pay their workers so little, rather a horrible group think has developed that makes paying workers as little as possible while at the same time placing increasingly hard task upon them as the

rule.

Learning Outcome
My biggest take away from this has been the increasingly the understanding of how little corporate America actually regards its own employees. This has increased my personal belief that one must look out for one’s self when it comes to the corporate world. Concepts such as 401 K’s as well as health insurance has increasingly more weight with me. Education which was also tops on my list will be part of the mix I use to personally argue for more aggressive increases in wages, because as clearly illustrated by the facts if you don’t value yourself, no one else will.