Higher wages: bad for Wall Street, good for Main Street

[Charlotte Kates <ckates@xxxxxxxxxxxx>]

**Higher wages: bad for Wall Street, good for Main Street**

(Reprinted from the May 11, 1996 issue of the People's
Weekly World. May be reprinted or reposted with PWW credit.
For subscription information see below)

By A. Jefferson Melyst

According to David Rosenstein of Falls Church, Va., the
controlling shareholder of 13 Popeye's Chicken and Biscuits
stores, "This minimum wage increase is a bad idea." It's
bad, he told Wall Street Journal staff reporter Bernard
Wysocki Jr, because profits would decline 25 percent or more
in some of his stores.

Of course, what he's saying is what Karl Marx defined as the
law of of capitalist economics -- that "profit rises in the
same degree in which wages fall; it falls in the same degree
in which wages rise."

But Popeye's makes a profit in all its stores, not just
"some." And, in some, it already pays more than the proposed
increase in the federal minimum wage from $4.25 to $5.15 an
hour. While Popeye's pays less than $5 an hour in
Philadelphia, the average pay is $6.01 in a more affluent
area like Rockville, Md. where store managers say a higher
minimum wage won't affect jobs, wages or profits. It's also
the case in 11 states and the District of Columbia where the
minimum wage is above the federal minimum.

Of the three options Rosenstein says he has, one is ruled
out -- accepting a lower profit. That's his main concern.
He's little concerned, if at all, about the options for
workers receiving a minimum wage, a wage whose purchasing
power will reach a 40- year low next January unless Congress
raises it before then.

For Jacqueline Barnes, who works at a Subway sandwich shop
in the District of Columbia, it would mean 15 cents an hour
more, "at least enough to buy me one extra textbook" for her
medical college studies.

Anna Diaz, a janitor in Silver Spring, Md., has been making
$5 an hour the past five years. The extra 15 cents she'd
gain, together with the $8 an hour her husband makes as a
baker's assistant, would ease the monthly struggle to come
up with $600 rent and the $100 sent to his mother in El
Salvador to care for their three children. It would also
cover increased bus fares she pays to go to work.

Corporate CEOs, who last year had a median income of $5
million, see a minimum wage raise as a threat to their
extraction of surplus value that makes such bloated and
obscene salaries possible. And they care not that they
extract it from the two-thirds of minimum wage workers who
are 20 years old or older -- and of whom 40 percent are the
family's sole provider.

The capitalist world of a Rosenstein focuses only on the
impact a raise of the minimum wage to $5.15 for workers now
averaging $4.77 an hour, will have on the bottom line --
reducing it, he figures, from $80,000 to $51,000.

Today the poverty line for a family of four is $15,600. A
90-cent increase in the minimum wage would raise the pay of
about 13 million workers. As against an employer worrying
about a profit of "only" $51,000 from three stores, U.S.
News & World Report said the additional $1,800 a year for
those 13 million workers, "adds up to about seven months of
utility bills for an average family."

For the capitalist, the consideration is not just profits --
but more profits -- the maximum profit, or, as Marx put it,
"the production of surplus value -- and the reconversion of
a portion into capital -- is the immediate purpose and
compelling motive of capitalist production."

For those workers with a job at the bottom of the wage
scale, it means basic, essential living needs and a chance
for maybe more than just that.

Popeye's will increase the number of class conscious workers
by confirming what Karl Marx called the irreconcilability of
the interests of capital and labor.

This ends the economics lesson for today -- a lesson that
Communists should be teaching every day, whether in the
shop, the community or anywhere else they meet people.
##30##
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_____________________________________________________________________________
    Charlotte L. Kates     ckates@xxxxxxxxxxxx        Collingswood, NJ

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