Us vs. Us: Elite Pit Poor Against Each Other

Pictured: Donald Trump who argues minimum wage is too high

Wages in America have fallen far behind the rate of inflation and the cost of living. The last time minimum wage was raised was in 2009 when the Fair Labor Standards Act (FLSA) raised it to $7.25 an hour. Some states and other localities such as cities have raised their minimum wage levels higher than this, but not to level it once was.

Many argue against it including Donald Trump who said on MSNBC's Morning Joe, "But I think having a low minimum wage is not a bad thing for this country." He argued that most people wouldn't have to worry about it if they just did a good job working hard.

Others argue against Presidential candidate Bernie Sanders' proposal to eventually raise it to $15 over multiple years. In these arguments, they use fast food workers as the example of a minimum wage worker. Out of the 3.3 million workers making the federal minimum wage or lower in America (tipped employees, student-employees, and more make under the federal level), 1.5 million are in the food industry according the Bureau of Labor. This doesn't take account for those that are making minimum wage in areas that are above the federal level, but pay a higher minimum wage due to cost of living in those particular regions (e.g. California is $10 an hour). Approximately 35 percent of food industry workers in total in American make minimum wage or less.

The strawman argument made is that if minimum wage is raised to $15, the majority of those that will benefit will be teenage kids working for an employer such as McDonalds. The average minimum wage employee is 35 years old according to John Schmitt, the senior economist with the Center of Economic and Policy Research in Washington DC. Just over 88 percent are over 20 years old and over 50 percent are over 30 years old. Fifty-four percent of minimum wage employees work full-time and another 32 percent work half-time (up to 34 hours a week). This also doesn't take account of those making just over minimum wage, but under the $15 an hour. This includes retail store managers such as Gamestop who pay head store managers $12 an hour to run businesses that make $2 million a year and carry a low payroll percentage already. They too would benefit from the raise.

Those that utilize the strawman argument online often make comparisons with teenage fast food workers to professions such as EMT's and military people who make under $15 an hour as well. This is a false argument though. To start, EMT's and other medical professionals making under $15 would benefit from a minimum that is raised to $15. Second, there is no scenario saying that fast food workers deserve it more or that they would receive the pay raise, but not those in the life saving professions. Thirdly, they too have been the victims over the years of not receiving raises that correlate with the cost of living.

Instead of people pitting fast food employees against these noble professions, why are they not banding together to fight those who have benefitted from their hard work? The average CEO makes 350 times more than their average employee, let alone one that makes minimum wage for that company. The average CEO in America makes $12.3 million a year which is almost $5 million a year ahead of the second highest paying country in the world to CEO's, Switzerland. Walmart's CEO, Doug McMillon makes $25.6 million a year not counting his company paid cars, paid air travel, and other benefits. This is 1,133 times higher than the average full-time Walmart employee who makes $22,591, or about $10.86 an hour.

This has ballooned from the 20-1 CEO to average pay ratio from 1950. This also doesn't account for other board members and top brass within these companies who also saw their incomes balloon higher than the average employee. While CEO's saw their pay rate rise as high as 1,750 percent since 1950, the average worker hasn't seen the same pay hike.

In 1968, the minimum wage was $1.60 which doesn't sound like a great deal, but when adjusted for inflation, has as much buying power as someone who make over $21 an hour today. That means if you make under $21 an hour today, you are no better off than a minimum wage employee was 48 years ago. You would have to make $41,680 a year ($21 an hour at full-time) to have the equal buying power of a minimum wage employee in 1968.

Today, 63 percent of Americans make under $41,680. That is 63 percent of Americans who make wages that have not kept up with inflation and the cost of living. There are teachers, first responders, business managers, and many other professions that make less than that. This means the face of person that has knocked down by the elite shouldn't be a fast food employee, but instead should be someone such as a soldier, teach, or EMT, for they too have been gypped.

While those who the strawman argue against minimum wage being raised to $15 an hour love posting pictures of fast food employees as the face of their argument, those who make less than $21 should ban together and counter this argument.

It's not one or another when it comes to fast food employees versus someone such as an EMT. The elite use this example to pit the poor against the poor. This takes the heat off what they themselves make. If you make under $15 an hour, you should direct your anger at those who run your place of business and not those who make around the same amount.

Middle Class America is Dying

The middle class in America is the next endangered species. Drastic as it may sound, this isn't too far off.

When people look back to the past many times they will cite a time in the 1950's as being the "good ole days". In the terms of the American economy, this argument could actually be made when it comes to the class system.

In 1950, the ratio gap between a CEO and his average paid employee was 20 to 1. By 1980, the number jumped to 42-1. This gap is now up to 350-1 on average. To put that into terms, the average employee would have to work nearly nine weeks to equal what his CEO made in only one hour of work.

When a company doesn't perform, it is often people at the lowest levels that are blamed for poor performance, but could some of it be the cost of the CEO to the company? J.C. Penney's former CEO Ron Johnson oversaw the decline of his company when in turn he was making 1,795 times more than his average employee. While a single pay cut for a CEO might not be enough in his case, the culmination of the board could have made a dent in the right direction. Johnson was ousted for J.C. Penney's drop in financial performance, but much of the board is still there.

One company, considered golden in the United States, Apple, not only has paid their CEO's a ton of cash, but has enough in the bank to not sell a single product for seven years and still be able to pay every single one of their employees. A company should keep money stored away for a rainy day, but how much is enough. At least while Steve Jobs was CEO, the company saw its level of innovation increase substantially, but not many CEO's can say they matched Jobs' rate of innovation for their company.

Another company, considered beloved by Americans, Disney, awarded their second-in-charge, Michael Ovitz, $38 million and $100 million in stock when Michael Eisner dismissed him from his position in 1997. This was after Ovitz only worked for Disney for less than 16 months and doesn't actually include his pay while he was employed. Was he worth at least $138 million to Disney? Probably not, but imagine what Disney could do payroll wise with $138 million. Shareholders tried to sue the company over the $100 million in stock given to Ovitz, but Disney claimed that the $100 million was his incentive to leave Creative Artists Agency (CAA) and join Disney. The courts upheld Disney's severance package decision.

What makes the gap worse is that many Americans aren't even aware of the difference. A study done by Harvard Business School produced research that Americans believe that the average CEO makes only around 30 times more than the average worker. "Americans drastically underestimated the gap in actual incomes between CEOs and unskilled workers," the study says.

The second largest CEO to average worker gap in the civilized countries of the world is in Switzerland and that is less than half of the gap in America, at 148-1. Denmark is at 48-1, Japan 67-1, and Israel 76-1.

CEO's should make more than anyone else in their company, especially if they are the company founder or at least the one who created the product that put their company on the map. But when the gap is significant, it could break America's back.

The unfortunate view in America is that often it is the average person who becomes demonized. As protests around America happen, people can't stand the idea of a fast food worker making a minimum wage of $15 an hour. Often memes online demonize fast food employees when they are compared to emergency responders or American soldiers and their rate of pay. The reality is that soldiers and first aid responders are also grossly underpaid, and if a fast food employee makes $15 an hour, in no way does it mean their work means more to than a soldier. Another reason $15 an hour isn't as high as it sounds because the buying power of a minimum wage worker in 1968 is nothing close to it is today. Compared to a minimum wage worker today, a worker today would have to make over $21 an hour to have that same purchasing power as someone did in 1968. Instead, the federal minimum wage is $7.25.

The rate of pay for lower paid workers never keep up with the rate of inflation, but a CEO's rate of pay went up over 1,000 percent during the same period. This is despite that the regular employee is the one demonized by much of America, instead of the CEO, especially with a Fortune 500 company.

Henry Ford in 1914 made a bold decision that kick started the growth of the American middle class in the 20th Century. He paid double the price of what the average factory worker made elsewhere. Paying double amount to an employee sounds like it could be the main ingredient toward bankruptcy for some, but in fact his turnover was lower than any other company, his profits doubled in less than two years, and Ford called it the best cost cutting procedure he ever did.

"A business that makes nothing but money is a poor business," Ford was quoted as saying.

This move by Ford not only gave his employees more money in their pockets, but it gave them more money to spend. He believed that his average employee should be able to afford to buy one of the very cars they made.

When the people at the middle class levels and lower receive more pay, studies have shown that more money is actually injected into the economy and businesses benefit as a whole. The poor would most likely spend almost every penny they make on consumer goods from clothing, food, transportation, and entertainment. The middle class is a little more likely to save a little more, but would still have more money on hand to spend. The tourism industry would get a boost, their children would find paying for college a lot easier, and even the money saved would eventually be spent in the elder years of the middle class.

The gap needs to shrink back to levels it was in the middle of the 20th century for America to be "great again".