A report by the Economic Policy Institute (EPI) released last week finds that since the $7.25 an hour wage was established in 2009, its real value has declined 27 percent, bringing the value of the federal minimum wage to its lowest point in 66 years.

Further, the value of the minimum wage is 40 percent lower when compared to its highest historical value of about $12.12 in 1968 after adjustment for inflation.

The last time that the federal minimum wage was lower than its current value was in 1956, when it was worth $7.19 in 2022 dollars.

 The MIT living wage calculator has found that, for instance, a single mother with two children making the federal minimum wage would need to work 235 hours a week – more hours than exist in a week – in order to make a livable wage.

Economists say that, if the minimum wage were raised in proportion to the productivity gains over the decades, the federal minimum wage would be $31.67 an hour. If it were raised alongside Wall Street executive bonuses since 1985, it would be $44.12.

 Although fast food and other service workers have been waging a campaign to raise the minimum wage to $15 an hour, even that number – over twice the federal minimum wage – is now only worth the equivalent of $11.65 in 2012 dollars, which is the year that Fight for $15 began.

The Value of the Federal Minimum Wage Is at a 66-Year Low (truthout.org)

CAPITALISM OR SOCIALISM

UN secretary general António Guterres warned ministers from 40 countries meeting to discuss the climate crisis on Monday that “Half of humanity is in the danger zone, from floods, droughts, extreme storms and wildfires. No nation is immune. Yet we continue to feed our fossil fuel addiction.” He added: “We have a choice. Collective action or collective suicide. It is in our hands.”

Guterres criticised the “multilateral development banks”, institutions including the World Bank. He said they were not fit for purpose when it came to providing the funding needed for the climate crisis, and that they should be reformed.

Humanity faces ‘collective suicide’ over climate crisis, warns UN chief | Climate crisis | The Guardian

 Record-breaking temperatures have killed over 1,000 people in Western Europe over the past week heat-related deaths.

Over 1,000 Die as Record-Breaking Heat, Wildfires Scorch Europe (commondreams.org)

  Oxfam International estimated Monday that a mere two weeks of wealth gains recently secured by global food billionaires would be enough to fully fund the United Nations’ multibillion-dollar effort to combat hunger in East Africa, where soaring commodity prices are intensifying food insecurity and pushing poverty to new extremes.

“Food inflation in East African countries where tens of millions of people are caught in an alarming hunger crisis has increased sharply, reaching a staggering 44% in Ethiopia—nearly five times the global average,” Oxfam said in a new analysis published amid a worsening global hunger emergency.

“It is estimated that one person is dying every 48 seconds in Ethiopia, Kenya, and Somalia alone, where the worst drought in decades is being exacerbated by the war in Ukraine and is pushing food prices to skyrocketing levels,” the organization said. “Against this backdrop, food billionaires have increased their collective wealth by $382 billionaire since 2020.”

“Less than two weeks’ worth of their wealth gains,” the group calculated, “would be more than enough to fund the entirety of the U.N.’s $6.2 billion humanitarian appeal for East Africa. The appeal is currently woefully funded at merely 16%.”

Hanna Saarinen, Oxfam’s food policy lead, said that “a monstrous amount of wealth is being captured at the top of our global food supply chains, meanwhile rising food prices contribute to a growing catastrophe which is leaving millions of people unable to feed themselves and their families. World leaders are sleepwalking into a humanitarian disaster,” Saarinen warned. “This fundamentally broken global food system—one that is exploitative, extractive, poorly regulated, and largely in the hands of big agribusinesses—is becoming unsustainable for people and the planet and is pushing millions in East Africa and worldwide to starvation.”

Oxfam argued there are a number of steps rich countries can take to help East African nations avert disaster, including canceling their surging debt burdens and taxing the rich to adequately fund humanitarian relief efforts.

“We need to reimagine a new global food system to really end hunger; one that works for everyone,” said Saarinen. “Governments can and must mobilize enough resources to prevent human suffering. One good option would be to tax the mega-rich who have seen their wealth soar to record levels during the past two years.”

“There have been 62 food billionaires created in the last two years,” Oxfam found, pointing to the global food corporation Cargill—one of a handful of businesses that collectively control more than 70% of the worldwide market for agricultural commodities—as a striking case in point.

Cargill is “87% owned by the 11th richest family in the world,” Oxfam observed. “The combined wealth of family members listed on the Forbes billionaire list is $42.9 billion—and their wealth has increased by $14.4 billion (65%) since 2020, growing by almost $20 million per day during the pandemic. This has been driven by rising food prices, especially for grains. Four more members of the extended Cargill family have recently joined the list of the richest 500 people in the world.”

Just Two Weeks of Food Billionaire Wealth Gains Could Fund Anti-Hunger Effort in East Africa (commondreams.org)

 The gap in education outcomes between poor children and others is far too wide, says Education Policy Institute (EPI), a policy thinktank.

Its study found that in 2019, prior to the pandemic, the gap between poorer pupils and their peers was 22-23 months in Wales and about 18 months in England.

In Wales, the largest disadvantage gaps by area were as big as 25-28 months, the EPI found. In England, the largest attainment gap, of about 25 months, was found in Blackpool.

Pupils living with long-term and persistent poverty are even further behind their peers in both countries. In England, the persistent disadvantage gap was equal to about 23 months of learning, while in Wales it was 29 months. There has been almost no improvement in this measure over the last decade. 

Pupils from poorer backgrounds were much less likely to reach the top quintile of GCSE scores and more likely to be in the bottom quintile across both nations. 

Luke Sibieta, an EPI research fellow, said, “Policymakers in both countries need to redouble their attempts to give poorer children a better chance in life…”

Poorer pupils in England and Wales lag ‘significantly’ behind, report finds | Poverty | The Guardian

 “It’s like the Trump years with a smile,” said the Palestinian official, who requested anonymity.

Russian police have detained the journalist Marina Ovsyannikova, who in March interrupted a live television broadcast to denounce the military action in Ukraine.

On Friday, Ovsyannikova posted photos of herself on Telegram showing her near the Kremlin and carrying a protest placard raising the deaths of children and denouncing Putin as a “killer”.

Russian journalist who staged TV protest over Ukraine invasion arrested again | Russia | The Guardian

FAT CATS GET FATTER

In 2022’s quarter one, the Federal Reserve’s “Distributional Financial Accounts” show:

 America’s top 1 percent held 31.8 percent of the nation’s wealth. 

The nation’s bottom half held 2.8 percent.

Back in 1980 fewer than 0.005 percent of America’s adults held over 1,000 times the nation’s median household wealth. 

By 2020, the ranks of that wealth cohort had quintupled. 

In 1983, not a single American held a fortune that equaled 100,000 times the nation’s median household wealth. 

In 2021, slightly over 50 Americans exceeded that threshold, and two Americans actually held over a million times the wealth of America’s most typical households.

Does the Future Belong to People Who Profit Off Our ‘Excessive Wealth Disorder’? – CounterPunch.org

“Patriotism in its simplest, clearest, and most indubitable meaning is nothing but an instrument for the attainment of the government’s ambitious and mercenary, aims, and a renunciation of. human dignity. common sense. and conscience by!the governed, and a slavish submission to those who hold-power, That is what is really preached wherever patriotism is championed. Patriotism is slavery.” – Leo Tolstoy

We do not deny the sincerity of many peace campaigners and can see that the energy and ingenuity they displayed in tackling a job they considered important provided further proof that once working men and women get on the right track capitalism’s days are numbered.  People in the peace movement would no doubt claim that all politicians are evil, completely insincere persons. But what they have in common is the simple fact that they all support the capitalist system of society. They have different ideas about how it should be run but all are agreed on this essential point.  Unfortunately without the necessary understanding of capitalist society, organisations like the Stop the War Coalition will continue to make mistaken claims, based as they are on irrational ideas about the social and economic forces at work in society today. The vote, when based on sound socialist knowledge and used to send delegates to Parliament as opposed to opportunistic leaders, can be the most useful instrument the workers possess.

Under capitalism, we have a world which is divided into rival and competing nations, which struggle with each other over the control of markets, trade routes and natural resources. It is this struggle which brings nations into armed conflict with each other because militarism is the violent extension of the economic policies of propertied interests. War cannot be isolated from the economic relationships of production or the general object of capitalist production, which is to advance the interests of those privileged class minorities who monopolise the whole process of production. It follows that no working class of any country has any stake or interest in war, and we have always said that workers should never support war. Our stand in the Socialist Party since it was established has been to oppose every war. Armed with this understanding of the cause of war we are committed to working politically with workers of all countries to establish world socialism because that is where the interest of the working class lies. We have never participated in the hideous cause of capitalism at war.

Amid the most extreme pro-war jingoism and hysteria, when nationalistic patriotism is prevalent across the whole population to support the war, the Socialist Party sent out this message. “Having no quarrel with the working class of any country, we extend to our fellow workers of all lands, the expression of our goodwill and socialist fraternity, and pledge ourselves to work for the overthrow of capitalism and the triumph of socialism.”  In all wars the Socialist Party sends out this inspiring message of fraternal goodwill.

We are saying that socialism is the only guarantee that war will not take place because it will completely remove the cause of war. But we are saying more than this. All the time capitalism exists, war will remain because the threat of military force, and its use, is a necessary instrument of vested economic interests. All the facts of modern history show that this is why governments maintain vast “defence” expenditures, including the cost of nuclear weapons. It follows then that activity to get rid of war must essentially be the activity to get rid of capitalism.

Think back to past wars democracy and the conduct of war are anathema to each other. The first casualty of war is democracy. It must be obvious to anyone who is not politically naive, that no government undertaking or treaty has ever been kept for longer than it was expedient to do so.

If peace movements continue to support capitalism they must be responsible for all the ways in which capitalism develops. Because capitalism cannot be controlled in the human interest, we do not know all the ways in which it will develop. We invite members of all anti-war groups to join with us now in building a better world. They must build on the concern and indignation and broaden their horizons. They should not place their faith in governments; that is a sure recipe for disaster and disillusion. We must not make pathetic appeals to governments to do something on our behalf. We must take the world into our own hands.

 Dear Andrew Yang

I followed with interest your campaign as a candidate in the Democratic Party’s 2020 presidential primaries. You are widely known for advocating Universal Basic Income (UBI) as a necessary response to the massive unemployment that you expect to result from automation in the near future. I recently read your book The War on Normal People: The Truth About America’s Disappearing Jobs and Why Universal Basic Income Is Our Future, published in 2018 by Hachette Books. I have also studied the website of your new Forward Party.

I am writing this open letter in response to your book and party website and in the hope of opening a dialog. Let me start, for the benefit of readers who have not read the book, by summarizing the main arguments you make there. 

You consider automation ‘the largest economic transformation in human history’ – larger even than the agricultural and industrial revolutions. It will bring ‘an unprecedented wave of job destruction’ that you call ‘the Great Displacement.’ 

As you acknowledge, many analysts distrust such bold assessments and prefer to explain unemployment in terms of other factors (see, for instance: Jason E. Smith, Smart Machines and Service Work: Automation in an Age of Stagnation, Reaktion Books, 2020). The skeptics, you suggest, are unduly influenced by past ‘false alarms’: after all, there has been talk about automation and its potential ever since the late 1940s. But the latest advances in information technology have finally made the use of automated systems the cheapest way to perform a much wider range of tasks. This time is for real. 

It is often argued that like previous technological revolutions automation destroys some jobs while creating others. While granting that this is so, you point out that the number of new jobs created by automation is very small by comparison with the number of old jobs it destroys.

In fact, you claim, the ‘Great Displacement’ is already well underway. Four million American manufacturing jobs have been automated since 2000. A hundred thousand department store workers were laid off in 2016—17, due partly to the automation of checkout and partly to the rise of e-commerce. 

To take another example, trucking currently employs several million people in the United States. In addition to three and a half million truck drivers, there are all the workers providing them with services at truck stops, diners, and motels. However, self-driving trucks are already here. They hauling iron ore for Rio Tinto in Australia and make deliveries in Nevada and Colorado. You expect that by the end of the 2020s trucking jobs will be gone. So will jobs driving buses and cars, such as those of the 300,000 drivers for Uber and Lyft.  

How many jobs at risk?

A task can be automated if it is ‘routine’ – that is, if a set of instructions (algorithm) can specify exactly how to perform it. A routine task may be physical or mental or both, simple or complicated, but it does not require independent judgment.  

It is estimated that 62 million jobs – 44% of all jobs in the US – are ‘routine.’ These are the jobs, at medium as well as low levels of skill, that are expected to disappear. What will remain? On the one hand, ‘cognitive’ jobs requiring a high level of skill and a capacity for independent thinking, including work to design, engineer, monitor, and maintain automated processes. On the other hand, service jobs that cannot be automated because they involve ‘nurturing,’ such as care of children, the elderly, and the disabled.    

Social consequences

In the absence of decisive corrective action by government, you argue, automation will lead to a society even more unequal than what we have today. The population will be divided into a minority of ‘affluent people in a handful of megacities’ and a majority of  ‘increasingly destitute and displaced people in decaying towns around the country.’ Competition for the shrinking pool of low- and medium-skill jobs will push wages down to a bare subsistence level. 

Readers outside the United States may not realize that in this country unemployment benefits are available only for limited periods (6 months up to 2 years) and only to those who did not leave their last job voluntarily. There is no public provision for the long-term unemployed. So automation will leave an expanding ‘permanent shadow class’ without legal means of subsistence.  

You are afraid of the violent social unrest that may result from this situation. That is one of the reasons why you advocate UBI as well as other reforms such as Medicare for All. However, your own analysis of the social consequences of automation implies that such reforms are inadequate as a remedy. 

You point out that in our society – and especially for men — status, respect and self-respect, and the sense of a meaning in life all depend on having a stable economic role. But there is a shortage of such roles and the shortage will grow worse as automation proceeds. You see a connection between this trend and a widespread demoralization that finds expression in addiction to drugs, gambling, and video games, breakdown of marriage and the family, despair and suicide. Simply ensuring that everyone has the basic means of material survival will not cure this malaise. 

A puzzle

The question at issue here is this. Can the social problems associated with automation be solved within the limits of the prevailing economic system, which is capitalism? Or is it necessary to go beyond those limits and replace capitalism by some other economic system?

One of the Core Principles of your Forward Party is ‘Human-Centered Capitalism’ – also described as ‘humanized capitalism’ or ‘capitalism made to work the right way.’ In order to make sense of this concept we first need to understand capitalism in its ‘natural’ form, that is, in the absence of ‘humanization.’ How does it work? What is its inner logic? Only then can we try to assess the extent to which the functioning of capitalism can be humanized. How realistic is the goal of humanizing capitalism?

The text on the website of the Forward Party that purports to explain the Core Principle of Human-Centered Capitalism is, to be frank, not very helpful. It says that ‘the economy’ must be humanized to ‘work for us’ and enhance ‘the quality of life of each and every person.’ Fair enough, but how (apart from UBI)? The word ‘capitalism’ does not appear in the text, so ‘humanization of the economy’ might be understood either as reforming or as replacing capitalism. Nevertheless, having no serious objection to anything in the text, I clicked the button to indicate my agreement. In response I received an email message thanking me for ‘supporting human-centered capitalism.’ But this misrepresents my position: I don’t support capitalism of any kind.

Toward the end of your book I noted a number of statements that seemed to me to imply that capitalism is inherently anti-human and that it is necessary to go beyond its limits. Thus:

‘Whom do we serve, Humanity or the Market?’ you ask (p. 242). You do not ask how to serve humanity and the market at the same time. 

And you declare: ‘Capital doesn’t care about us. We must evolve beyond relying upon it as the primary measurement of value’ (p. 243). 

And on the same page: ‘We must convert from a mindset of scarcity to a mindset of abundance.’ But the market is based on scarcity, is it not?

I find it hard to figure out what you really think on this crucial issue. I wonder whether you yourself know what you think. 

Socialism as a solution   

I am a member of the World Socialist Party US. Our party, and the World Socialist Movement of which it forms a part, consider it urgent for humanity to make the transition to a higher and more democratic form of society. We call this society ‘socialism’ or sometimes ‘communism’ – but for us these words signify a human community of social equals that values people for themselves, not the anti-human bureaucratic state order of countries under the monopolistic rule of ‘communist’ parties. 

The displacement caused by automation that you have brought to public attention is one of the major developments that make the transition to socialism so urgent. We acknowledge that social reforms like those you advocate can humanize capitalism to some degree. However, the potential for humanization within capitalism is constrained by the inner logic of the capitalist system. This inner logic was first analyzed in depth by a fellow named Karl Marx. Perhaps you have heard of him. 

The essential point is that capitalism, by its very nature, is not human-centered but capital-centered. Indeed, that is what makes it capitalism. Its driving imperative is the expansion and accumulation of capital – a goal pursued endlessly and for its own sake. When well-meaning social reformers go ‘too far’ in their efforts to force it to function in a humane manner, contrary to this imperative, it ceases to function altogether.   

In socialism the means of automation, like other means of production and distribution, will no longer serve to enrich and empower a tiny minority. They will be owned in common and controlled democratically to serve the welfare of the whole community. 

Automation will lighten the workload of the community by eliminating boring and tiring tasks that people prefer to avoid. But the more interesting and satisfying work that remains will be widely shared. Every able-bodied member of society will have some useful work to do, but the short hours made possible by automation will allow ample time for other aspects of life. 

Automation basically solves the problem of production. But the ecological degradation and climate chaos bequeathed to socialism by capitalism will impose another task of no less importance and urgency – rehabilitation of our natural environment. People will undertake many activities for this purpose, some of which may be automated and others not. 

Your response to this letter will be greatly appreciated, especially if it is a substantive response. 

Respectfully,

Stephen D. Shenfield

Secretary, World Socialist Party US

July 2022

Automation: an open letter to Andrew Yang – World Socialist Party US (wspus.org)