About 4 years ago

08/28/2015 - Republican Presidential Hopefuls Debate Wage Stagnation

At a recent Koch-sponsored forum for Republican Presidential hopefuls, Senators Rubio, Rand and Cruz discussed how each would address the issue of wage stagnation, an issue that Democrats have framed as income inequality.

The forum was the most complete gathering of leading contenders for the Republican Presidential nomination to date, and the fact that this issue commanded their attention in front of an audience of conservative ideologue funders should rightly be considered a victory for those who have tried for years to make it a centerpiece of the American political dialogue; the Occupy Movement, Fight for 15 and Thomas Piketty to name a few.  The episode demonstrates not only the political realities of 2016, but also the larger, underlying forces of a sluggish American economy that is mired between an old world order and a new one.

While conventional wisdom would suggest that a conversation on the economy, as opposed to say foreign affairs, helps the Democratic nominee, that’s not necessarily the case here.  Ronald Reagan swept into office on a message of, dare we say, hope and change in a moribund economy.  Nearly a year and a half from Election Day and without nominees selected, it’s impossible to know which side (or even a third party candidate) can best capitalize on the associated bundle of issues related to wage stagnation.  But, we can make some safe assumptions about who will serve as the boogeyman on the issue during the nomination process and potentially during the general election: entry-level employers. Few politicians on the campaign trail will be able to resist tapping into the gathering mistrust of large corporate brands, and even fewer will vehemently defend tax-dodging, undocumented worker employing, minimum wage paying, temp job-reliant employers.

Entry-level employers are a soft target in this line of political discourse and will continue to take the brunt of the criticism.  Their employment practices will serve as the case study for why a minimum wage hike is necessary.  If the SEIU’s promise is fulfilled, and they do, in fact, run minimum wage ballot initiatives in every state that allows it in 2016 (26 states total, including battleground states like Florida and Ohio) then restaurant, retail and c-store brands will again find themselves in the crosshairs of controversy in key electoral states.

Assaulting “the bosses” is a much more potent line of attack than discussing the complex dynamics that vaulted us into recession, how technology has rapidly transformed every main street into just another corner of the global marketplace and how we must transform our regulatory structure and education system to adapt in the global economy.

Unfortunately, all the factors that resulted in an American economy saddled with sagging wage growth will be glossed over as notable brands are blamed for operating in, essentially, the exact same manner that they were before the recession hit.

 

While President Obama’s economic policy maven, Austan Goolsbee, does advocate for a minimum wage increase, he also rightly recognizes the important role that entry-level jobs provide as a stepping stone for those just entering the workforce.  According to Goolsbee, government’s primary focus should be directed toward helping American workers, through education opportunities and job training, to continue improving themselves and matriculating through the American economy, increasingly adding greater value and driving the country’s innovation and growth forward.  Entry-level employment is a starting point, not an end point. In this worldview, entry-level employers play a vital and important role.  That’s a great conversation for C-Span at 3:00 am, but without a communicator like Reagan that can distill that message into sound bites and elevate the conversation, “the bosses” should buckle up because it’s going to be rough ride.

Many employers are already anticipating this discussion, and are getting in front of the political conversation by taking the initiative and increasing wages and benefits for employees.  Walmart is the most notable company to recently vow that every employee will make at least $9 an hour.  Not every employer will have the luxury of making such a bold commitment, but every employer should be doing everything in their power to demonstrate they are part of the solution rather than problem.  Those that don’t could quickly become a 2016 talking point.