The Case For A 21st Century New Deal:
Mimimum Wage and Basic Income

Date: October 5, 2014

 

When was the last time American workers saw a real increase in wages? That would be back in the 1960s; since then, workers’ wages have been flat or falling along with record-high unemployment during the Second Great Depression of the Bush and Obama administrations (14 years running).

Productivity has increased up to 1000 fold during that time, but all the financial gains have gone to the corporations and their “shareholders”.

Who are the “shareholders”? Not the common stock holders; their returns are minimal if any at all. The “shareholders” are primarily the executives and their management team that have stock options. They run organizations like their own private plantations, in other words, it’s “plantation capitalism”.

And American workers get left out.

This is what America has become today. Rewards for the few and nothing for the rest, which creates the ever-widening inequality gap.

Don’t expect Democrats or Republicans to do anything; they’re paid to maintain the status quo in favor of corporations and the rich. Their bribes come in the form of campaign contributions and lucrative rewards after they leave office. For example, former president Bill Clinton has made over $110 million in speaking fees since leaving office in January 2001 (in addition to his government pension and perks paid for by taxpayers).

The Supreme Court has also been overly friendly to Big Business in their decisions ruling in favor of corporations almost 100% of the time.

Wall Street and Big Business learned their lessons from the FDR years; now they completely own both parties (Republicans and Democrats), and in effect, they control the government. Almost every law passed has the corporate seal of approval. This, in effect, allows them to act with impunity and no fear. During the Great Depression, the Pecora Commission investigated the Wall Street bankers and was instrumental in sending many of them to jail. Under the Obama Administration, in contrast to FDR, no bankers have gone to jail.

The deck has been overwhelmingly stacked against American workers since the 1980s.

 

The NDP Proposal

The NDP goal is to ensure individuals and families make $52,000 per year.

The NDP Jobs Program creates 28 million jobs for Americans. Starting pay for those jobs is $52,000 per year plus full benefits and retirement. There will be additional jobs available for people that need work.

The NDP will also open Medicare for everyone for health insurance; everyone will be covered, no exceptions.

And since today’s corporations have gutted worker retirement plans in favor of excessive executive retirement packages, a national retirement plan will address workers’ losses.

The NDP will also make 28 hours a standard full time work week; that addresses a true 50:50 work-life balance.

The NDP strongly believes that employee-owned businesses are the only solution to fixing the current problem
of corporate greed, shortsightedness, and inequality.

The NDP will eliminate taxes for people making under $45,000 per year.

For private sector jobs, the NDP will raise the federal Minimum Wage to $19.25 per hour plus full benefits including vacation, retirement, and health insurance through Medicare. The Minimum Wage will have annual COLA (cost-of-living adjustments).The Minimum Wage will only be used as a starting pay point for one month, and only for entry-level positions.

If the Minimum Wage had kept pace with inflation and productivity over the past decades, it would be $21.72 per hour today.

In the past, businesses have used the stagnant Minimum Wage as a business strategy to control expenses, while executives and management reap excessive rewards. Today, the CEO-to-Worker pay ratio is 354:1.

FDR said, “In my Inaugural I laid down the simple proposition that nobody is going to starve in this country. It seems to me to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country. By “business” I mean the whole of commerce as well as the whole of industry; by workers I mean all workers, the white collar class as well as the men in overalls; and by living wages I mean more than a bare subsistence level - I mean the wages of decent living.“.

For companies that provide reduced worker hours, the Basic Income will make up the difference to ensure individuals and families earn $52,000. This addresses the workplace insecurity that Americans have been facing over the last two decades.

 

How It Works

Minimum wage: $19.25/hr (with full benefits). The Basic Income will make up the difference to ensure that individuals and families are earning at least $52,000 per year. The difference will be paid monthly in cash to workers.

For a 28 hour work week:
28 hrs = $539/wk x 52 wks = $28,028/yr + $23,972 (Basic Income diff.) = $52,000/yr

 

For a 30 hour work week:
30 hrs = $577.50/wk x 52 wks = $30,030/yr + $21,970 (Basic Income diff.) = $52,000/yr

 

For a 40 hour work week:
40 hrs = $770/wk x 52 wks = $40,040/mth + $11,960 (Basic Income diff.) = $52,000/yr

 

Compared to the Democrats’ and the Socialists’ Plans

The Democrats have backed a Minimum Wage increase to $10.10 per hour, no benefits, and workers pay mandated private insurance premiums. Overall, the Democrats’ plan is woefully lacking considering the cost of living today with housing, food, and energy costs. It continues to enforce the practice of making people the “working poor” and does nothing to improve the situation.

The Socialists have made good strides by pushing for a $15 per hour Minimum Wage. It helps but does not eliminate the problem. In addition, without national regulation, corporations will find ways around it.

Also, the Democrats’ and Socialists’ plan is only for individuals with no consideration for families; in other words, families will be shortchanged.

The NDP plan includes no income taxes on up to $45,000 income and Medicare-for-All (paid with payroll taxes).

 

Comparisons:
Individuals & Families:

Dems: $10.10/hr (no benefits)
28 hrs = $282.80/wk x 52 wks = $14,705.60/yr
30 hrs = $303/wk x 52 wks = $15,756/yr
40 hrs = $404/wk x 52 wks = $21,008/yr

 

Socialists: $15/hr (no benefits)
28 hrs = $420/wk x 52 wks = $21,840/yr
30 hrs = $450/wk x 52 wks = $23,400/yr
40 hrs = $600/wk x 52 wks = $31,200/yr

 

NDP: $19.25/hr (w/benefits)
28 hrs = $539/wk x 52 wks = $28,028/yr + $23,972 (Basic Income diff.) = $52,000/yr
30 hrs = $577.50/wk x 52 wks = $30,030/yr + $21,970 (Basic Income diff.) = $52,000/yr
40 hrs = $770/wk x 52 wks = $40,040/mth + $11,960 (Basic Income diff.) = $52,000/yr

 

Parenting

The NDP also believes that parenting is important and strongly supports providing full-time parents with $52,000 per year with pension and benefits while they raise their children.

 

How To Pay For This

The Republicans and Democrats have been robbing this country blind while selling out the people and sending all the jobs and manufacturing offshore. Now it’s time for Wall Street, Big Business, and the rich to pay their fair share.

- Confiscate all the monies offshore in tax havens. In 2012, it was reported that globally, the rich and corporations hid $21 trillion in offshore accounts to avoid paying taxes

- Implement a 78% tax rate on the rich and big businesses

- Add a 4% tax per transaction on high-volume Wall Street stock trades

- Break up monopolies, they stifle competition and concentrate wealth in the hands of a few entities

- Close all tax loopholes that businesses have bought and paid for with lawmakers