It was a week where it was reported that hedge fund manager James Simons made over $1.7 billion for 2006, the Dow Jones set a new record high and CEOs as a group continued to make more than at any time in history. Yet amid such unparalleled wealth, the U.S. Congress is only now getting around to finalizing a bill that would raise the federal hourly minimum wage from its current $5.15 to $7.25 —but not until 2009.
The increase was passed by the House and the Senate earlier this year and would take two years to be phased in. The final bill has not been placed on the President’s desk and there is no indication that he is looking for it. Those who are struggling to make their lives better, not by welfare but by work, single mothers and Wal-Mart employees —just three large groups who would benefit from this modest raise and long overdue visit to planet Earth by lawmakers— apparently have no voice worthy of being heeded. It has been more than 10 years since the act setting the federal minimum wage was changed. In that time, a generation of low-paid workers has come and gone. Many have died in the poverty to which their elected representatives consigned them by their inaction.
In his column today, The New York Times’s Paul Krugman echoes the worry we expressed here in March about a return to a distant era of economic division. Mr. Krugman writes:
Well, in at least one respect, everything old is new again. Income inequality — which began rising at the same time that modern conservatism began gaining political power — is now fully back to Gilded Age levels.
But it’s much too soon to declare the march toward a New Gilded Age over. If history is any guide, one of these days we’ll see the emergence of a New Progressive Era, maybe even a New New Deal. But it may be a long wait.
On a similar theme in March, we observed:
Capitalism has experienced these kinds of episodes in the past —the Gilded Age from 1865 to 1901 and the “malefactors of great wealth” that sparked the fury of Theodore Roosevelt and his promise of a “square deal” in a fledgling 20th century come to mind. The results produced considerable upheaval. One of the more turbulent periods was the aftermath of the Great Depression, when the hope of a “new deal” began to resonate with displaced workers who rode the rails in search of work. It is not encouraging that we are seeing a return to the milestone of 1929 in 2007.
It is becoming apparent that the snail’s pace in advancing the minimum wage is part of an accelerating backward march into a past of wealth inequality and economic polarization. Significant portions of the middle class are being carried out of sight by its momentum as well. When the leaders of capitalism and government permit this during times of unprecedented gain for themselves and those at the top, history teaches that they are treading upon a perilous course.
It has taken far too long for the legislative and executive branches of the U.S. government to enact a functioning bill to increase the minimum wage, which, in this time when a few are doing very well and so many others are not, is our choice for the Outrage of the Week.