Despite growing worker productivity, wages continue to decline.
An article in Business Insider titled “Profits Just Hit Another All-Time High, Wages Just Hit Another All-Time Low,” by Henry Blodget, tackles this issue. Overall it is pretty good, but I have to disagree with his final conclusion.
Blodget supposes that the reason for our crisis is our attitude, an attitude that prioritizes profit, especially profit in the short term.
In reality, it is the very existence of corporations in our current system of finance capitalism that is to blame.
While I think that short sightedness has something to do with it, I really doubt that it is the sole source of the problem.
Ultimately, the problem is not this attitude of short-term thinking. It is a false notion that all corporations are only focused on the short term and ignore the long term.
The crisis we see today is a periodic one. We have seen it throughout history in the form of economic depressions and recessions. The problem resides with modern finance capitalism, a system of busts and booms and periodic crisis.
Last March, the Center for Economic and Policy Research released a study stating that if the minimum wage kept pace with worker productivity, then it would be $21.72 per hour. This represents a huge leap over the current $7.25 per hour.
The reason that wages are so low in a time of corporate prosperity is simply because that is how our system of finance capitalism works.
If workers were paid the full value of their labor, then there would be no profit for corporations.
Blodget said that corporations must “create long-term value for all of their constituencies (customers, employees and shareholders), not just short-term profit for their shareholders.”
But I disagree.
While it would be an ideal solution to have corporations fix the problem, the truth is that they themselves are part of the problem. They need to exploit labor in order to profit, and are thus in favor of capitalism as it stands today.
Mann, a freshman computer science major from Raleigh, is an opinion writer.