wal-mart wages20 Nov 2005
Kevin Carson offers his thoughts on H. Lee Scott’s somewhat surprising (at first glance) advocacy of a higher minimum wage. He provides a solid tour of the notion that big business, contrary to the standard progressive rhetoric, is actually not that unfriendly to social welfare and regulation, as long as it helps externalize costs that they already bear:
… some large corporations have a lot to gain from socialized medicine. Currently, giant corporations in the monopoly capital sector are the most likely to provide private insurance to their employees; and such insurance is one of the fastest-rising components of labor costs. Consequently, firms that are already providing this service at their own expense are the logical beneficiaries of a nationalized system.
In it, though, he also quotes Lew Rockwell on an interesting motivation for corporate support of minimum wages that I hadn’t considered before – namely that it gives monopoly capital yet another edge. If the basic operating costs of running a business are suddenly increased, larger firms that can better absorb costs (and even sustain losses due to risk diversification) are poised to survive where their smaller competition succumbs.
This is how child labor legislation, mandated pensions, labor union impositions, health and safety regulations, and the entire panoply of business regimentation came about. It was pushed by big businesses that had already absorbed the costs of these practices into their profit margins so as to burden smaller businesses that did not have these practices. Regulation is thus a violent method of competition.
It’s interesting stuff, though it’s not enough for me to entertain even a remote opposition to minimum wage legislation. Yes, it may be a great example of corporate/government collusion to further consolidate monopoly capital, but it nonetheless has the immediate impact of raising the quality of life for everyone it affects – monopoly or no monopoly.