Editorial | Issue 13
Dear Uncle John
In 1913 Henry Ford had a problem with his new Model T. There simply weren’t enough people who could afford to buy it. He also had issues with worker attrition. Overworked and underpaid staff would quit, or simply fail to turn up. What Ford did revolutionised industry in the US. He doubled the wage of his workers to $5 per day, and cut their hours to eight per day. All of a sudden his worker attrition rate plummeted, and at the same time his sales surged, as his workforce was suddenly able to afford their very own Model T.
The point, dear Uncle John, is that trickle-down economics is a crock of shit. It is workers who drive the economy, through not only their labour, but also their consumption. The world got it horribly wrong in the last few decades. Rather than increasing workers’ wages so that they could continue to consume and create demand, they gave that money to the wealthy – those who needed it the least.
Meanwhile, they came up with a new product for workers to consume: debt. Levels of personal debt skyrocketed, and bankers made fortunes on the back of the interest payments. And when it all came tumbling down like the house of cards it was, it wasn’t the banks that had to pay, but once again the working class, the taxpayer, as governments declared the banks “too big to fail”.
We need to return to an economy that is based on worker consumption, and the only way to do so is to have a real minimum wage. We cannot rely on business, or individuals, or unions to fight for this. We need the government to defend workers’ rights and drive the economy, by ensuring that workers are paid well enough to be the consumers that propel our economy.
Uncle John, this isn’t a rejection of capitalism. It is a wholehearted embrace of it. Capitalism has proven itself time and time again to be the most effective method of creating new wealth. I’m not arguing that you need to put up the minimum wage because it’s unfair to pay people too little to live rich fulfilling lives (though it is). I’m not even saying it because the top 1%, like yourself, live in extravagant wealth that sickens the stomach when compared to the poverty of New Zealand’s most unfortunate (although it does).
I’m arguing that you must put up the minimum wage because it makes the most economic sense. And as I understand it Uncle John, economics is something that you’re supposed to be good at.
Sort it out Uncle John, that’s what we pay you so well for.
- Joe Stockman