19 Aug Living Wage
Now that we have discovered all the “essential” workers who were invisible to us, or to whom we had closed our eyes, what are we going to do?
I mean, the people who keep our cities and buildings and homes clean and functional. Is it really alright for them to live the way they have been living all these years — in some hovel, making barely enough to eat, working Sundays so they can accumulate enough leave to visit every four months, for a week, their parents, wives, and children forsaken in some faraway village? Is it really alright and acceptable to you? Is it mandated by some God on high?
I know it before you can say it. We are back in the days of the Roman pantheon and there is a Market God except that now he doesn’t stay atop Mount Olympus but in Hyde Park, in Chicago that is, not London anymore. The Market God ordains the wages based omnisciently on what people deserve — their value-added — and how can we go against the revealed wisdom of the Market God?
But if their value-added is really so insignificant, how come they are so “essential” our cities can’t function without them and we have to bang pots all over the country and name our children after them to celebrate their newfound essentialness and bemoan our newly discovered ignorance?
Does this Market God have feet of clay? In these days of toppling all the ugly and outdated statutes, could we just poke it in its ribs and see if it doubles up with laughter for having fooled us all these years?
The Market God is a tough cookie having survived Marx who railed against subsistence wages and advocated toppling it. It took succour from Malthus who exonerated the deaths of the poor who would otherwise overrun the globe’s food supply. And it hid behind Hayek who scared the world with The Road to Serfdom.
The God that Marx proposed came a cropper at the hands of Lenin and Stalin. Malthus was plain wrong. And, as for Hayek, we have arrived at serfdom by quite another route than he had in mind.
So what is to be done with the Market God still standing tall on its pedestal in Hyde Park? Still smirking at those who thought they would occupy Wall Street. Quite reassured that it would be Biden not Sanders entering the White House, determined, like Obama, to pay obeisance to the Market God and ensure its hegemony over the world notwithstanding some minor words of comfort and empty promises to those prostrate under its chokehold.
I confess I want to bring the Market God down but I propose going for its head not its feet. This is my concession to its power. I would let it stand but chop its head off — like that of Ozymandias — to leave “Two vast and trunkless legs of stone” while “Nothing besides remains… Of that colossal wreck.”
Here is why I would let the Market God upright on its trunkless legs. Because the Market God has an Immaculate Son known as Competition and Competition has its saving graces giving us a few good things like efficiency and innovation. But Competition also gives us subsistence wages and inequality and exercises an inescapable chokehold. No one person can mess around with Competition.
Think of this. If I pay my workers a living wage I would be out of business in a flash if my competitors didn’t follow suit. And if all the workers in a country persuade their government to mandate a living wage, investment would flee to countries that didn’t match the move. And, we know quite well, there is no global government that can put a universal floor under all wages to forestall this heartless footloose investment. The Immaculate Son has its knee on the necks of labour and in no hurry to lift it.
So the minute we talk of raising minimum wages, howls are let loose and a myriad admonitions pour forth from Hyde Park about distorting the market. We are told how the move would backfire because firms would freeze hiring and turn to robots hurting the very essential workers one is wanting to protect. Does one really want that given the already wretched state of their lives?
One is supposed to be struck dumb by this argument. But wait, there is a non-distortionary way around the conundrum. Go for the head of the Market God, not its feet, and let the Immaculate Son do what it does.
Here is the proposal. Let the Market God determine every individual’s value-added as before. Let it give an ego-boosting Rs. 25 lakhs per month to some completely non-essential person and value an essential one at Rs. 15,000. Just cap the take-home income at the top — a ratio of 1 to 50 between the lowest and highest take-homes ought to be quite enough. If the minimum monthly take-home is Rs. 15,000, let the maximum be Rs. 7.5 lakh. Everything above that is taxed away entirely.
Don’t be fooled by the threat that the highly-valued would pack up and leave. They have nowhere to go with their green passports and even if they do they will discover they are worth much less than they thought. Cap the upside and watch the Market God adjust production and prices to make the new regime sustainable. Then hear the perverse pleas to raise the minimum wage.
Let this pool of funds make up the difference between what the Market God deems proper for an individual and what society deems to be a living wage. Let the local representatives of Hyde Park come up with an estimate of the living wage. But let them do it from behind a Veil of Ignorance. If they were to be reborn as an essential worker where would they peg the living wage? Let’s start from there and iterate to where we wish to go.
This opinion was published n Dawn on July 31, 2020 and is reproduced here with the author’s permission. The writer was dean of the School of Humanities and Social Sciences at the Lahore University of Management Sciences.
By Anjum Altaf