Restaurant and grocery workers are now earning, on average, over $15 an hour, according to a recent report from The Washington Post.
This breaking of the $15 an hour barrier for these sectors, a longtime goal of the Fight for 15 movement, is a first, representing, in Business Insider’s analysis, “another sign of wages increasing in a tight labor market that’s seen workers quitting en masse, seeking wage transparency from job postings, and reshuffling into higher paid roles.”
And rising wages aren’t the only enticement employers are using as they vie in the fierce competition for workers.
As Eric Rosenbaum wrote for CNBC on the heels of Target and Walmart announcing they will cover 100% of employees’ college tuition, “The war for workers isn’t only benefiting the labor force in the form of higher employee wages, but a benefit arguably as, if not more, important to their economic mobility and long-term success: access to education.”
All good, right?
Well, of course, raising wages to a more livable level for workers and taking another baby step toward an incrementally more economically just and democratic society deserve applause.
We also, though, should not forget a key lesson about our economy that we should have learned from the coronavirus pandemic: The U.S. market economy simply does not fulfill, and is not designed to fulfill, the most basic and foremost mission an economy is supposed to.
President Joe Biden’s policies, and policy ambitions, from the American Rescue Act to his support for an increased minimum wage to his unprecedented advocacy for labor’s right to unionize, have essentially affirmed, or been rooted in a recognition of, the fact that the U.S. market economy does not operate in a way that meets the needs of Americans. Biden recognizes the need for government to create policies to address the insufficiencies and failures of the U.S. capitalist market economy.
Biden’s approach to managing the economy seems to recognize that wages and benefits that rise because of market forces and conditions that may be temporary should not be viewed as a solution to the ongoing economic deprivations and injustices Americans endure. While there may be a war for workers now, what happens when this tight labor market loosens, as history tells us it will? Should the ability of people to meet their basic needs be subject to such fluctuation?
Any ECON 101 class will teach you that the primary objective of designing an economy in a civilized society is to distribute goods and services most efficiently and effectively to meet the needs of those living within that society and economy.
The prevalence of poverty, homelessness, constrained access to healthcare, and other conditions of deprivation plaguing Americans powerfully underscores the U.S. market economy’s failure to meet the basic needs of our population.
In large part, this failure is due to the fact the chief economic indicators we use to assess the functioning of the U.S. economy have little to do with measuring the well-being of people living in the nation and much more to do with monitoring corporate profits, stock market performance, employment levels, and the like. Just catch a daily news report.
Corporate profits, of course, are increased when labor costs are reduced. And we know many Americans are employed in jobs that pay less than a living wage. Even $15 an hour is not a living wage.
So, again, the mission of the U.S. economy is primarily to produce profit, and that’s what economists tend to measure. The meeting of people’s needs is subsidiary and typically not a factor in assessing the health of the economic system.
Indeed, on the whole as a culture, Americans tend to view people’s economic struggles as a result of their personal failings, bad decisions, or laziness, not as a function of the operational dynamics of the system itself, even though we know, for example, that corporate profits are linked to companies’ abilities to exercise power (such as eliminating unions) to drive down wages.
What we see in this current war for workers, leading to higher wages, is not that businesses can’t or couldn’t afford to remunerate workers with better wages and benefits but that they were in a position of power where they didn’t have to.
We often hear businesses cry that they will have to shut down if they have to pay workers a decent or livable wage.
Now we see that isn’t the case at all. Indeed, even as wages rise, corporate profits are hitting record highs.
Businesses have simply been behaving according to the chief value or priority of the U.S. market economy, which is achieving and maximizing profit rather than meeting need.
We never really hear talk that a responsible business plan is one that puts a premium on making sure employees who put in a full work week can earn enough at least to meet their basic needs, have access to quality health care, and so forth.
We tend more often to hear about how much businesses will suffer or how they won’t be able to survive if workers must be paid a living wage and enjoy healthcare benefits.
In short, the chief value-driving economic behavior, the U.S. economy itself, is not the meeting of human need, and thus it is designed to fail when it comes to working for Americans’ collective well-being.
While now disgraced, New York Governor Andrew Cuomo nonetheless offered a similar insight about the failure of the U.S. market economy when his state’s hospital system was struggling to meet the needs of patients during the height of the pandemic. He pointed out:
“You only have 53,000 hospital beds. You only have 3,000 ICU beds. Why? Because our health care system is basically a private system. They don’t build capacity that they don’t need. They don’t build extra ICU beds just in case. An intensive care bed is very expensive. They don’t build a wing of ICU beds that sit vacant for 10 years on the off-chance that there’s going to be a public health emergency and you’ll need the beds… so we don’t have them. We have the capacity that people use day-in and day-out. And that’s not just New York. That’s every state in the United States.”
In short, Cuomo points out that a system designed to maximize profit simply won’t be equipped to meet need. It may be economically efficient from a profit perspective, but it is not efficient from a human perspective.
So, while wages are rising now, we would be wise not to confuse the fluctuations in market conditions for permanent improvements in workers’ lives and locked in steps toward a more just and democratic economy.
Tim Libretti is a professor of U.S. literature and culture at a state university in Chicago. A long-time progressive voice, he has published many academic and journalistic articles on culture, class, race, gender, and politics, for which he has received awards from the Working Class Studies Association, the International Labor Communications Association, the National Federation of Press Women, and the Illinois Woman’s Press Association.