Robert Reich: The ‘Paid-What-You’re-Worth’ Myth

Inequality graphs

As usual, Robert Reich says it better than I could (emphasis added).

“Paid-what-you’re-worth” is a dangerous myth.

…The real difference is the GM worker a half-century ago had a strong union behind him that summoned the collective bargaining power of all autoworkers to get a substantial share of company revenues for its members. And because more than a third of workers across America belonged to a labor union, the bargains those unions struck with employers raised the wages and benefits of non-unionized workers as well. Non-union firms knew they’d be unionized if they didn’t come close to matching the union contracts.

Today’s Walmart workers don’t have a union to negotiate a better deal. They’re on their own. And because fewer than 7 percent of today’s private-sector workers are unionized, non-union employers across America don’t have to match union contracts. This puts unionized firms at a competitive disadvantage. The result has been a race to the bottom.

…The reason Wall Street bankers got fat paychecks plus a total of $26.7 billion in bonuses last year wasn’t because they worked so much harder or were so much more clever or insightful than most other Americans. They cleaned up because they happen to work in institutions — big Wall Street banks — that hold a privileged place in the American political economy.

…The “paid-what-you’re-worth” argument is fundamentally misleading because it ignores power, overlooks institutions, and disregards politics. As such, it lures the unsuspecting into thinking nothing whatever should be done to change what people are paid, because nothing can be done.

It’s not that working Americans are lazy/incompetent. Capitalists are greedy and powerful.

UPDATE:

Conservative Myths About the Minimum Wage, Debunked
Contrary to conservative myths, raising the minimum wage would boost the economy, benefit all workers, and won’t hurt consumers.

  1. #1 by brewski on March 16, 2014 - 5:04 am

    Hillary Clinton sat in the Board of Wal Mart for 6 years. What did she do to raise the pay of workers? Remember, the CEO reports to the Board.

    • #2 by Richard Warnick on March 16, 2014 - 11:02 am

      I suppose the GOP is planning to nominate a Friend of the Working Man (and Woman)? Both major parties are corporatist, that’s a big problem.

      • #3 by brewski on March 22, 2014 - 11:30 pm

        Thanks for not answering my question.

  2. #4 by cav on March 16, 2014 - 9:34 am

    That’s sort of how I remember it as well. Hillary…the forgone conclusion!

  3. #5 by Dennis Ware on March 16, 2014 - 10:05 am

    If she wins the nomination from dems then the Party, and America is doomed to more war.

    The woman, and I use that term lightly as strictly a gender description, is a psychopathic murderess.

  4. #6 by cav on March 16, 2014 - 10:10 am

    If you’re not actually squeezing the trigger, crushing the trachea, aren’t you sufficiently removed as to retain your virtue?

    Asking for a friend.

  5. #7 by Dennis Ware on March 16, 2014 - 10:15 am

    No..ask Mussolini, Hitler, Kaddaffi, JFK, LBJ, Nixon..etc. etc. being hung by their heels is too good for them.

    Any collusion, preparation for a conspiracy of murder has the same punishment if you are the leader of it.

    Is your friend a retard?

  6. #8 by Richard Warnick on March 17, 2014 - 3:51 pm

    UPDATE:
    Conservative Myths About the Minimum Wage, Debunked
    Contrary to conservative myths, raising the minimum wage would boost the economy, benefit all workers, and won’t hurt consumers.

    • #9 by brewski on March 17, 2014 - 4:27 pm

      That was good for a laugh. Thanks.

  7. #10 by Dennis Ware on March 17, 2014 - 4:15 pm

    Haha..We have much bigger problems than minimum wages. Won’t hurt consumers. An idiot job is going to cost more..that cost will be passed on to the consumer. Idiot job holders will have more money to spend stupidly. Consumers will be able to buy less idiot job stuff.

    Or maybe they will just be laid off..find the right 10.10 an hr employees, work em like dogs for less than 30 hrs, and then avoid obamafail.

    Yep, sounds about right.

  8. #11 by cav on March 17, 2014 - 5:40 pm

    You can plumb the depths of available data and still get it wrong. The NSA is working hard to prove just this and they have way more data than you can imagine.

    Another reason why feelings aren’t to be discounted – mega-meta-data swamping certainly isn’t just for the ‘big boys’.

  9. #12 by Larry Bergan on March 17, 2014 - 7:45 pm

    In all my forty five years on the job, I’ve worked with more young people who died before their time, then those who didn’t work hard as hell, every day. In fact, I can’t think of more then a handful of them.

    How much you make has no relation to how hard you worked. It’s just not possible to work 4 hundred times harder then anybody else. It’s plain silly to think so.

  10. #13 by brewski on March 18, 2014 - 7:54 am

    Larry, you are right, we need a law which bans people from making too much money. I look forward to George Clooney and Jeffrey Katzenberg signing up for that one.

  11. #14 by cav on March 18, 2014 - 8:01 am

    I’m told there’s an economic layer so far above ;the Cloonies’ that makes the gap between George / Jeff and yer common underpass dweller look like a paper-cut. Hillary is said to look ‘needy’.

    Oh, and Good morning.

    • #15 by brewski on March 18, 2014 - 8:13 am

      There are people who make a lot of money.
      So what?

      • #16 by cav on March 18, 2014 - 8:26 am

        Sparkly rich people deserve more of everything – including Life itself because of their awesomeness. Drudges deserve and get less because otherwise they’d have been born awesome.

        Exceptional USA! is just about perfect…or perhaps it’s got something to do with personal behavior as it gets filtered through greed. I don’t know.

        There’s got to be a body of stats that support / disprove this.

        • #17 by brewski on March 18, 2014 - 8:58 am

          I worked for a legitimate billionaire for a while. His wealth didn’t make anyone else poorer.

  12. #18 by Dennis Ware on March 18, 2014 - 9:45 am

    You are off topic, if an idiot job can’t make you any money as the OWNER of it, then you will buy a machine that can…or simply do something else entirely.

    The expectation that people who in the business of making money will change their relation to the bottom line is ludicrous.

    Minimum wage jobs should be for teenagers, if you are over 21 thinking working at McD’s is going to pay your bills..you might be an idiot, in an idiot job.

    • #19 by Richard Warnick on March 18, 2014 - 12:30 pm

      The problem is that a lot of jobs that existed prior to Bush’s Great Recession and collapse of our economy haven’t come back, and people who work for a living are forced to take low-wage employment.

      You can denounce them as “idiots,” but you could be next!

      • #20 by brewski on March 18, 2014 - 1:40 pm

        It was Clinton’s Great Recession.

        • #21 by Richard Warnick on March 19, 2014 - 7:18 am

          We going to do this again? Bush was the President who gave us the so-called “Ownership Society,” aka the housing bubble.

          • #22 by brewski on March 19, 2014 - 8:26 am

            asset bubble started in 1995
            try again

          • #23 by Richard Warnick on March 19, 2014 - 8:51 am

            The Case–Shiller home price index took off during the Bush administration. The so-called “Ownership Society” and lax regulation fueled the housing bubble and hid overall economic stagnation, declining wages, and rising poverty. Bush officials were never allowed to say the word “recession.”

          • #24 by cav on March 19, 2014 - 8:53 am

            Our entire economy is frothy. It’s what we do.

          • #25 by brewski on March 19, 2014 - 8:54 am

            The home bubble was part of the asset bubble which started in 1995.
            The lax regulation was egged on and encouraged by Barney Frank, Maxine Waters and all of the “Roll the Dice” Democrats.
            You are blind.

          • #26 by cav on March 19, 2014 - 9:08 am

            Expertise and facts have got us where we are. Bare facts themselves aren’t such a big deal. They have to be twisted by professionals…

            …people like Alan Greenspan, then attacked by the corporate welfare takers that Hate those facts.

          • #27 by cav on March 19, 2014 - 9:20 am

            …attacked – or promoted. Then it’s Off To The Races!

          • #28 by brewski on March 19, 2014 - 9:32 am

            Here is your ownership society guy:

          • #29 by Richard Warnick on March 19, 2014 - 9:56 am

            Benjamin Hallman on HuffPo:

            “Historically, home prices and income have followed similar paths. A split began around 2000, when wage growth dropped to near zero, even as home prices began to soar.”

            Here is the problem with political discourse today: right-wingers think they are entitled to their own set of facts.

          • #30 by brewski on March 19, 2014 - 9:57 am

            Explain that to Barney Frank, see above.

            By the way, look at your own chart and look at the time on the far right. According to your chart there is a bubble now which is as bad as the one before, and Bush isn’t President anymore. So it must be Obama’s fault. Blame him under your rules.

          • #31 by Richard Warnick on March 19, 2014 - 10:14 am

            Not according to the Case-Shiller graph. Hallman’s article says that housing is unaffordable for the middle class, but not because of a renewed bubble.

          • #32 by brewski on March 19, 2014 - 11:27 am

            Apparently Barney Frank is unfamiliar with the Case Shiller chart. He said there is no bubble. Watch the video.

          • #33 by Richard Warnick on March 19, 2014 - 12:57 pm

            Um, what party controlled BOTH houses of Congress and the White House in 2005, and did Rep. Frank belong to the majority party?

          • #34 by brewski on March 19, 2014 - 4:23 pm

            This is an interesting NPR story. According to this story, the causes of the housing bubble are:

            1. New wealth and savings in places like China who needed a place to invest it
            2. Alan Greenspan lowered interest rates dramatically, when Clinton was president
            3. Those new investors started buying mortgage pools since US Treasuries were paying such a low rate
            4. Ratings agencies rated those pools at AAA (the DOJ is only prosecuting S&P, but not Moody’s, even though the evidence against Moody’s is stronger)

            http://www.thisamericanlife.org/radio-archives/episode/355/the-giant-pool-of-money

            Listen to it.

          • #35 by brewski on March 19, 2014 - 10:37 pm

            Rep. Frank:

            “I do think I do not want the same kind of focus on safety and soundness that we have in OCC [Office of the Comptroller of the Currency] and OTS [Office of Thrift Supervision]

            I want to roll the dice a little bit more in this situation towards subsidized housing”

          • #36 by Richard Warnick on March 20, 2014 - 7:41 am

            There you go again. The financial sector meltdown was not the fault of powerless Dems and poor people.

          • #37 by brewski on March 20, 2014 - 7:54 am

            Take it up with NPR.

          • #38 by Richard Warnick on March 20, 2014 - 12:48 pm

            Your NPR link seems to agree with my contention that extreme inequality causes bubbles. When wealth is concentrated in relatively few hands, there aren’t enough investment opportunities in the “real” economy. So we end up with exotic financial instruments, and asset bubbles, followed by a collapse like we saw in 2008. If wealth is more equitably distributed, the “real” economy of goods and services is much better off.

            Then-powerless Dems and always-powerless poor people did not cause Bush’s Great Recession and the meltdown of the financial sector. It was Republicans and rich people.

          • #39 by brewski on March 20, 2014 - 3:41 pm

            That’s not what the NPR piece said.

            You need to stop smoking Larry’s weed.

          • #40 by Larry Bergan on March 20, 2014 - 7:48 pm

            brewski:

            I haven’t actually listened to your NPR piece, but I’ll just bet Richard has interpreted it better then you have. That being said, NPR, for all of it’s great programs, is biased towards the right, and almost never lets people on to talk about really serious issues who make sense. They’re not allowed to do that unless the truthful panelist is outnumbered or the show ends just after an important question has been asked.

            For some reason, Bill Moyers IS allowed to do that on PBS. Maybe it’s because he has brought them so much success in the past. The mission of his program is to bring people on that you never hear ANYWHERE, but who are out there trying to get out the truth.

            You should watch!

            All of the episodes are archived. None of the tapes have been destroyed. Watching the show is like taking a drink of clear cool water, after life threatening dehydration. Refresh your intellect.

          • #41 by brewski on March 20, 2014 - 8:03 pm

            NPR is right leaning as much as Barney Frank likes to have sex with women.

          • #42 by cav on March 20, 2014 - 8:13 pm

            Ass-tooter than the astute-est.

          • #43 by Larry Bergan on March 20, 2014 - 8:42 pm

            brewski:

            You probably think that Howard Stearn is the quintessential liberal representative. You know; Fartman. Am I right?

            Bill Moyers wouldn’t invite Stearn on his program if the CIA threatened his entire, extended family. He ONLY invites people on who NEVER get seen on for-free-television or even cable.

            As soon as NPR starts doing that, – or for that matter, the entire rest of PBS – I’ll stop saying they lean to the right. Not a second before.

          • #44 by brewski on March 21, 2014 - 8:35 am

            Why would I ever listen to Stern?

  13. #45 by Dennis Ware on March 18, 2014 - 9:54 am

    Anyone here work for minimum wage who is supporting its rise?

    Of course you can rise the minimum wage for government contract work..the goddamn government has no bottom line.

    I figure the 18 trillion in outstanding debt with the whopper of trillions more in unfunded liabilities are so great you would think even an idiot could understand it.

    Though that becomes problematic when the average American child is testing in 25th #$%^&*( place in international competency testing…we dwell in an evolving IDIOCRACY!

    • #46 by brewski on March 18, 2014 - 1:39 pm

      I was offered a job for minimum wage once. I decided it wasn’t enough so I went and found a better paying job. I didn’t need my mommy to do it for me. Statists are just little babies who can’t deal with being grown-ups.

  14. #47 by cav on March 18, 2014 - 3:26 pm

    Dennis,

    Stanford: International Education Rankings are Biased

    “A comprehensive analysis of international tests by Stanford and the Economic Policy Institute shows that U.S. schools aren’t being outpaced by international competition.

    Socioeconomic inequality among U.S. students skews international comparisons of test scores, finds a new report released today by the Stanford Graduate School of Education and the Economic Policy Institute.”

    http://paloalto.patch.com/groups/schools/p/stanford-international-education-rankings-are-biased

  15. #48 by Larry Bergan on March 18, 2014 - 5:56 pm

    I understand that Jon Hunstman’s daughter wants older Americans to take a cut in their Social Security payments by 20% and keep working until they’re 75.

    Who asked you, baby doll?

    • #49 by brewski on March 18, 2014 - 7:06 pm

      Thanks for the misogyny.

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