Living Wages

The American people en masse have been doing what good capitalists never do—they’ve been spending their capital.

New York Stock Exchange trading floor (1963) courtesy Wikipedia

(CALGARY, Alberta) - When I leave a restaurant, in addition to leaving a generous tip, I silently thank everyone working there for giving me money. They hadn’t given me money directly of course, but they did indirectly, in that they are not paid a living wage which is reflected in lower meal costs. In other words they paid for part of my meal.

The standard rebuttal from restaurant owners is that they would “like” to pay their people more, but in order to remain competitive they have to cut costs as much as possible.

My rejoinder to that is: If they can only stay in business by exploiting their employees, then they don’t deserve to stay in business. Of course, this conclusion is repudiated by many, if not most Americans—as long as they can keep costs down, of course they deserve to stay in business. (Businesses who waste money on overhead like union recognition, environmental standards, workplace safety and so on, shouldn’t be surprised if they end up going out of business.)

This contradictory American belief in capitalism and free enterprise itself is the undoing of America. Everyone wants living-wages-plus, but at the same time they want the cheapest possible goods and services. Capitalism is about low costs, reduced government, economic efficiencies, and so on. People want living-wages-plus, but at the same time, in order to pay less for their consumables, they support the idea that other people should be paid less (See Wisconsin where in the recalls of August 11, 2011, the voters didn’t even have the wit to turn out the Republicans who are driving their state and whole country into the ground.)

There is an old concept in economics—there is no free lunch. Right-wing economist and Nobel laureate Milton Friedman even made that the title of a 1975 book which was a collection of his columns from Newsweek and a few other odds and ends like his 1973 interview in Playboy magazine.

The idea of a “free lunch” originated in the 19th century when bars would advertise a free lunch to anyone who drank there. Of course there was nothing “free” about the lunch because the overall prices of alcohol had to go up to cover the additional cost. But, of course, there were “free lunches” in part for those who just had a couple of drinks, and never returned. Because of the increased cost of their couple of drinks, they did pay for a part, but just a tiny part of the lunch.

Simply put: regular customers did not get a free lunch; occasional or onetime customers did. Just consider one example—John Paulson, founder and president of Paulson and Co. in New York made a fortune betting against the subprime mortgage market and in 2007 personally pocketed $3.7 billion, giving him the record—perhaps of all time—of profiting financially from the misery of others.

Paulson received a multi-billion dollar free lunch, but it was paid for and is still being paid for by millions of ordinary Americans who lost houses, jobs, standards of living and hope, so that John Paulson (he, of course, is not the only one) could have, not just a free lunch, but a free banquet of unimaginable proportions.

One might feel anger or despair at the relative unjustness of this, but looked at in a larger sense it is a natural outcome of the gullibility of the American people. American culture itself is based on the false belief in a free lunch. There are free lunches in particular instances, but overall there is not and never could be. (As of last March, Forbes estimated Paulson’s net worth at $16 billion. He has “earned” none of it, although the twisted American capitalist belief not only let him accumulate it, but is letting him keep it.)

This is why much of American manufacturing has been outsourced to low-wage countries. Americans want cheap goods, but they do not want to pay a real price for them. Business recognized this and discovered that they could manufacture in countries like China and Malaysia where they had, not only lower wage costs, but reduced overhead for items like environmental protection, worker safety, etc.

So the chickens have come home to roost. It is not likely that there will be another cycle like the one just ending, which began after the Second World War. Through the 1950s and 1960s, “Made in Japan” meant cheap and shoddy goods. But, it didn’t long for Japanese quality and innovation to improve to the point where the Japanese national living standards (and wages) increased and Japan became a global leader in manufacturing. The automobile industry is a case in point. The Big Three—GM, Ford and Chrysler—once “strode the world like a colossus” (Shakespeare) until the Japanese introduced little details like quality.

The American people en masse have been doing what good capitalists never do—they’ve been spending their capital. Since the 1950s, Americans have been consuming themselves into poverty. The nation is completely dependent on oil, but they don’t have any of their own in sufficient quantities and are thus reliant on other nations which only accentuates the outflow of national capital.

But the biggest loss is the nation’s destruction of its human capital. Not only are tens of millions of Americans unemployed or underemployed, but there are millions of Americans who may never work again. Many companies are now adding to their help wanted signs and websites, the statement that they will only take applications from people who are currently employed.

Many of the unemployed are also in a bad age bracket—forties and fifties—and losing potential skills for every day they are on the job market. These people are no longer consumers in the old sense, which just adds to the downward vicious cycle—more unemployed, less consumption, less production, less need for workers, and more unemployed.

It’s not something that most people would wish (I haven’t wished it) but the self-evident conclusion is that “We the people” have been hoist on their own petard.

Born and raised in Calgary, Alberta, Daniel Johnson as a teenager aspired to be a writer. Always a voracious reader, he reads more books in a month than many people read in a lifetime. He knew early that in order to be a writer, you have to be a reader.

Another early bit of self-knowledge was that writers need experience. So, in the first seven years after high school he worked at 42 different jobs ranging from management trainee in a bank (four branches in three cities), inside and outside jobs at a railroad (in two cities), then A & W, factories and assembly lines, driving cabs (three different companies), collection agent, a variety of office jobs, John Howard Society, crisis counsellor at an emergency shelter, salesman in a variety of industries (building supplies, used cars, photocopy machines)and on and on. You get the picture.

In 1968, he was between jobs and eligible for unemployment benefits, so he decided to take the winter off and just write. The epiphany there, he said, was that after about two weeks, “I realized I had nothing to say.” So back to regular work.

He has always been concerned about fairness in the world and the plight of the underprivileged/underdog. It wasn’t until the early 1990s that he understood where that motivation came from. Diagnosed with ADD (Attention Deficit Disorder) he researched the topic and, among others, read a book Scattered Minds by Dr. Gabor Maté, an ADD person himself. Maté wrote: "[A] feeling of duty toward the whole world is not limited to ADD but is typical of it. No one with ADD is without it."

That explains his motivation. Hard-wired.

As a professional writer he sold his first paid article in 1974 and, while employed at other jobs, started selling a few pieces in assorted places. He created his first journalism gig. In the late 1970s, when the world was recovering from a recession, the Canadian federal government had a job creation program where, if an employer created a new job, the government would pay part of the wage for the first year or two. The local weekly paper was growing, so he approached the publisher and said this was an opportunity for him to hire a new reporter. The publisher had been thinking along those lines but cost was a factor. No longer.

Over the next 15 years, Daniel eked out a living as a writer doing, among other things, national writing and both radio and TV broadcasting for the CBC, Maclean’s (the national newsmagazine) and a host of smaller publications. Interweaved throughout this period was soul-killing corporate and public relations writing.

It was through the 1960s and 1970s that he got his university experience. In his first year at the University of Calgary, he majored in psychology/mathematics; in his second year he switched to physics/mathematics. He then learned of an independent study program at the University of Lethbridge where he attended the next two years, studying philosophy and economics. In the end he attended university over nine years (four full time) but never qualified for a degree because he didn't have the right number of courses in any particular field.

In 1990 he published his first (and so far, only) book: Practical History: A guide to Will and Ariel Durant’s “The Story of Civilization” (Polymath Press, Calgary)

Newly appointed as the Deputy Executive Editor in August 2011, he has been writing exclusively for Salem-News.com since March 2009 and, as of summer 2011, has published more than 150 stories.

He continues to work on a second book which he began in 1998.

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