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Why I Fight for $15

Saturday, April 18, 2015 12:18
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The Fight for $15 movement is usually identified with the fight for a $15 minimum wage. A call for government legislation is not the sort of thing you’d normally expect an anarchist to endorse. But in fact the movement to pay workers $15 or more is quite compatible with anarchist principles.

Back in the late 19th century, the American movement for an eight-hour day included people from a wide range of political ideologies. Some favored federal legislation to achieve their goal. But the movement also included numerous anarchist tendencies, including individualist anarchists affiliated with the New England Labor Reform League. The nationwide general strike for an eight-hour day was seen by some as a call for a government-mandated limit to the working day, but it was also a pressure campaign on employers. That’s how I see the Fight for $15 campaign.

Information and pressure campaigns against employers by unconventional labor organizations are arguably more effective than conventional campaigns under the umbrella of the AFL-CIO or SEIU, as witnessed by efforts like the Coalition of Immolakee Workers and OURWalmart. Such campaigns, allied with community social justice and civil rights organizations, and making use of direct action on the job, can make a tame AFL-CIO union certified under Wagner Act rules look comparatively appealing to an employer.

Right-wing libertarians frequently argue that labor action to raise wages is useless, because in a free market wages reflect workers’ marginal productivity. Hence forcing employers to pay a minimum wage will simply raise unemployment, by making workers whose marginal productivity is less than the minimum wage unemployable.

This argument makes several huge assumptions. First, it assumes that this is, in fact, a free market. But it is not. We have an economy in which the state has intervened in the market on behalf of capitalists and landlords to make capital and land artificially scarce and expensive, and acted in other ways to raise entry barriers against self-employment, so that wage employers are protected against the need to compete for workers against the possibility of self-employment or employment in worker-owned enterprise. As a result, employers are able to hire workers for a wage less than the full product of their labor; the difference between the free market wage of labor and what is actually paid under capitalism amounts to a substantial economic rent. Hence, an increase in wages resulting from increased bargaining power of labor can come out of this rent.

Second, it assumes that employers have some idea of what the marginal productivity of their workers is. But as Auburn University Professor Roderick Long argues, this is quite unlikely.

First of all, most employers do not know with any great precision their workers’ marginal revenue product. Firms are, after all, islands of central planning – on a small enough scale that the gains from central coordination generally outweigh the losses, but still they are epistemically hampered by the absence of internal markets…. A firm confronts the test of profitability as a unit, not employee by employee, and so there is a fair bit of guesswork involved in paying workers according to their profitability….

A firm that doesn’t pay adequate attention to profitability is doomed to failure, certainly; but precisely because we’re not living in the world of neoclassical perfect competition, firms can survive and prosper without being profit-maximisers. They just have to be less crazy/stupid than their competitors.

This leaves bargaining by workers as an important part of the discovery mechanism by which the marginal productivity of labor is determined.

And third, it assumes that the demand for labor is highly elastic. Right-wing libertarians are fond of claiming that increased minimum wages will increase unemployment, while leaving out the vital term “ceteris paribus” — all other things remaining equal. Factors like relatively inflexible consumer demand for fast food, the fact that labor cost is only one component of a business’s operating cost, and the fact that higher wages paid by all employers in a particular industry and locality would eliminate labor as an issue for cost competition, all complicate this simplistic assertion.

But let’s assume for a moment that labor is the main cost of service industry businesses. In that case, the fact that labor rather than capital outlays is the primary expense raises the question of why labor, as the scarce factor, isn’t calling the shots and hiring capital for worker-owned and -managed enterprises, rather than the other way around. The answer is that the owners of capital, working through the state by such expedients as bank licensing and capitalization laws, have preempted the avenues through which workers could advance capital to one another and given capitalists a monopoly on the issue of credit. And through zoning and safety codes, they have made renting expensive real estate and purchasing industrial-scale equipment a condition for establishing enterprises like restaurants, thereby foreclosing low-overhead micro-restaurants and -diners operated out of people’s homes, using the ordinary food preparation machinery in their own kitchens (along with similarly outlawing other home-based services like daycare, hair styling, ride-sharing, and the like).

Another common argument is that higher restaurant wages will result in employers automating fast food jobs out of existence. But remember that automats were once a thing, in the mid-20th century. They didn’t catch on for a reason. Interacting with actual human servers is part of the restaurant experience. Next time you’re in a retail establishment, take note of the number of people lined up to be checked out by a human cashier while the self-serve checkouts sit idle.

One practice of the nineteenth century labor movement that deserves revival is the formation of worker-owned and -managed enterprises by workers on strike. This has long been feasible in industries where human capital is the main cost, like temp agencies and various services. But current technological trends, which reduce the capital outlays for undertaking garage production with tabletop CNC machinery to the equivalent of a few months’ factory wages, greatly expand the number of industries where this is a possibility.

I for one am not interested in working through the state to impose a higher minimum wage. I think workers, acting through grassroots labor campaigns and direct action, should hit employers so hard that they beg government to protect them from us.

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