By Hamilton Nolan
Feb 12, 2014
The deadly collapse of a garment factory in Bangladesh has sparked calls for better worker treatment. The revelation that Apple manages to avoid almost all taxes has drawn vague calls for tax reform. A more direct path to fairness: let's just have a reasonable international minimum wage.
We live in a global economy, as pundits are so fond of proclaiming. The global economy is the delightful playground of multinational corporations. They're able to drastically lower their labor costs by outsourcing work to the world's poorest and most desperate people. And they're able to escape paying taxes, like normal businesses do, by deploying armies of lawyers to play various countries' tax codes off against one another. The result is that money that should, in fairness, go to workers and governments ends up in the pockets of the corporation. The global economy is extremely advantageous to corporations, who owe no loyalty to anyone or anything except their stock price; it is disadvantageous to normal human beings, who exist in the world and not as a notional accounting trick.
In America, we accept the minimum wage as a given. It enjoys broad support. It is the realization of an ideal: that there is a point at which low pay becomes a moral outrage. (Where that point is, of course, is up for continuous debate.) Do not mistake the minimum wage for some sort of consensus of nonpartisan economists; it is a moral statement by our society. A statement of our belief that the economically powerful should not have a free hand to exploit the powerless.
Yet we are all hypocrites. We protect ourselves with a minimum wage, while at the same time enjoying the low consumer prices that come with ultra-low wages being paid to workers abroad. Our own purchasing habits reward companies for paying wages that are sure to keep their workers in poverty for life. We soothe ourselves by saying that these desperately poor workers are still better off than they would be without a job; yet we would reject that argument if an employer here tried to use it to pay us less than the minimum wage. We simply do not care if people halfway around the world who we do not see are exploited, if it saves us money.
Many business interests say that raising the wretched wages in one country will simply send the factories to another, even poorer country. That's a great reason to institute an international standard that would render that strategy moot. Bangladesh, where more than a thousand garment workers died in the Rana Plaza collapse thanks to the cutthroat quest to drive down prices, represents the bottom of the international manufacturing economy. The minimum wage of garment workers there is less than $50 per month. For all of our lofty rhetoric about a connected world and freedom and opportunity, we happily acquiesce to a system which keeps these workers— desperate, poor, and with little bargaining power— trapped in poverty. Can you live on $50 per month in Bangladesh? Yes, clearly. You can live in poverty.
Opponents of all sorts of "living wage" laws say that those who would advocate such a thing misunderstand the inherent economic forces of capitalism. Not true. We understand them all too well. We understand that, as history has amply demonstrated and continues to demonstrate, absent regulation, economic power imbalances will drive worker wages and working conditions down to outrageous and intolerable levels. People will, indeed, work all day for two dollars if that is their only option. That does not make it morally acceptable to pay people two dollars a day. Capitalism must be forcefully tempered by morality if we are to claim to be a moral people.
The system that we have— in which the vast bulk of profit flows to corporate shareholders, rather than workers and governments— is not a state of nature. It is a choice.
Slavery was an excellent economic system for manufacturers and consumers, also. It put billions upon billions of dollars into the pockets of industrialists and those who purchased their naturally low-priced goods. The only losers were the slaves. Slaves are workers who are paid $0 per day. Our consciences irked us enough that we outlawed slavery. Now we buy our goods from companies that pay workers $2 per day. We act as if this represents a huge leap forward in human morality. Today we only tolerate economic slavery. Today's workers are free to quit their jobs at any time, and starve to death.
The multinational corporation has evolved much more quickly than the laws designed to regulate it. Individual governments are no match for companies that can be anywhere, everywhere, and nowhere. It is seen as quixotic to hope that the world's largest companies might pay reasonable tax rates in the nations where they operate—even tax law experts bemoan the possibility of ever being able to cobble together a tax code that can handle multinationals effectively. Corporations are, in effect, reaping profits at a premium rate, just because no system is equipped to properly tax them.
So let's do the next best thing: let's put that money directly into the pockets of workers. (Conservatives are always telling us that individuals are better at solving their own problems than government, anyhow.) The world's biggest corporations pocket billions every year by avoiding taxes internationally. Governments aren't able to get that money back. But the workers—the impoverished garment workers in Bangladesh sewing t-shirts for Wal-Mart, the harried FoxConn workers in China making iPhones, the faceless and forgotten and unseen low-paid factory workers around the world who live in penury so that we can enjoy cheaply manufactured goods—can get that money back themselves, through a wage increase. Wage increases cannot be avoided with armies of tax lawyers. Give the workers more money, and they will pay more local taxes. Two birds with one stone. A global minimum wage, set to a level at which humans might be able to actually live a minimally acceptable lifestyle. Yes, it can be pegged to each nation's cost of living; and no, it doesn't have to be extravagant. But it has to be enough to make life worth living. It has to be more than what we have now: wages that guarantee persistent poverty.
This doesn't require the passage of laws in every single country around the world. We can do it ourselves. We can pass a law saying simply that any multinational corporation of [X] size that wishes to sell goods in America must pay all of its employees and subcontractors a minimally acceptable wage. Companies that don't wish to abandon the American market—virtually all of them—would comply. Once some major European nations signed on as well, the law would be as good as global, because to avoid it would mean forsaking too much of the consumer market.
Prices would rise a bit. That's okay. We would never countenance buying goods produced with slave labor, just because they were cheap. We should not countenance buying goods produced by workers sentenced to a life of poverty and hopelessness, either.
[Image by Jim Cooke. Photo via AP]