June 16, 2015
Editorial by Ramona du Houx
The Framers of the U.S. Constitution set forth the fundamental basis for our government, using the concept of the “social contract,” according to which human beings begin as individuals in a state of nature and create a society by establishing a contract whereby they agree to work to live together in harmony for their mutual benefit.
Raising the minimum wage is all about how much the lives and livelihoods of hard-working people are valued. Under the New Deal-era social contract people were valued.
“No business which depends for existence on paying les than living wages to its workers has any right to continue in country,” said President Franklin D. Roosevelt when the federal minimum wage was signed into law in 1938. When questioned about what he meant by a “living wage” the President said, “By living wages, I mean more than the bare subsistence level. I meant the wages of a decent living.”
There was an understanding and expectation that with full-time work—regulated by reasonable labor standards and backed by a robust safety net to guard against unexpected hardship—ordinary people would have the resources they need to achieve a decent standard of living. By giving hard-working American’s a minimum wage, those who wanted to, could lift themselves up to achieve other goals.
The New Deal era of the 1930s through the 1970s was defined by high and rising wages, which were pushed up by strong unions, low energy and commodity prices, and more stringent regulations on business practices. In addition, higher taxes on the 1 percent funded government programs and helped create opportunities like the GI Bill, so more people could achieve a college a education and seek out higher wage jobs.
In the 1980s, that social contract began to erode. Deregulation of industry, healthcare costs skyrocketing, and increasing tax breaks for the wealthy all led companies to move away from the New Deal-era consensus that had connected the public and private sectors in a working partnership. More dependency on government aid by corporations, like Wal-Mart, was one result.
Today a person someone working full time on minimum wage is living in poverty—with increasing demands from states questioning their integrity, especially if they are on assistance programs. Taxpayer-funded public assistance programs are vital components of a safety net that protects millions from undue hardship. These programs only cost the federal government .47 percent of the budget in 2011. Many citizens think our safety-net programs need boosting not further cuts.
“Indeed, given the extraordinarily high rates of poverty and child poverty that persist in the wake of the Great Recession, there is every reason to think that current levels of spending on these programs are woefully inadequate to truly combat poverty and lift living standards for program participants,” wrote Cooper in his report.
In failing to adequately raise the minimum wage, policymakers have reversed the social contract. The system we now have mainly benefits some employers—corporations—at the expense of workers and taxpayers. The pendulum needs to swing back, so we find a balanced public/private solution.
When so many citizens are struggling to make ends meet, policies to boost incomes should be the top priority.
We need to value people again, not CEOs who rake in millions while they pay workers poverty wages that put the health and well being of families at risk.
The social contract comes from believing in people. If you help lift up an individual, everyone in the community benefits.
Raising the minimum wage would lift incomes for thousands of working Mainers and their families. It is one simple and long-overdue step toward rebalancing the social contract, so that the private and public sectors are more equal participants in improving living standards for all workers.