Wealth-hoarding and the minimum wage
ack at the dawn of the 20th century’s automotive industry, Ford Motor CEO Henry Ford enraged his fellow industrialists by paying his workers enough money to be able to afford the very products they were making. Ford was pilloried by the wealthy of his day for lifting his employees out of poverty. Ford paid them $5 per day. It turned out Ford’s calculation was correct. Industrialized economies grew, and people were able to buy cars, household appliances, clothes and many other consumer goods.
The very wealthy have a malignant habit of forgetting this fundamental economic lesson. Has the ‘trickle-down’ money of the last three decades of tax cuts ever made its way into the pockets of the people whose effort make that wealth possible. Nope. It is skimmed off in the form of low or non-existent taxes and lucrative loopholes, hoarded and stashed outside the tax jurisdiction of the countries from which the wealth was generated. Those outsize profits benefit nobody.
At the start of 2018, Ontario’s minimum wage rose to $14 per hour. To put that number in perspective, Ontario’s inflation-adjusted minimum wage just now managed to catch up to where it was 40 years ago, in 1977. To listen to some of the wealthy and privileged, they are aghast that they can’t continue to operate a business model that drives the real earning power of the people they employ ever downward.
Economies just don’t function when the very wealthy hoard all the money, in their country or offshore. Everybody loses that way, including the wealthy.
Now, let’s watch the wealth-hoarding syndrome explained in less time that it has taken you to read this far down in this post. Robert Reich is a former U.S. Secretary of Labour. Back in 2016, long before Ontario’s Bill 148 and its long-overdue labour reforms were introduced, let alone enacted, he put together a 90-second explanation of precisely what Ontario’s higher minimum wage and package of labour reforms actually mean. Click the video, and enjoy!
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