Middleclass Capitalistic System a Talk on keeping the American Dream Alive

(This is a draft of a YouTube talk)

This is a discussion on how we can keep the American Dream alive while implementing new technology. Basically it is made up of three parts two of which are how American employees should be compensated and the third is how corporations should operate in United States in order that a middle-class wage is paid to employees. We might want to think of this as a Middleclass Capitalistic System. The “System” would work better with “Political” support especially the minimum living wage. It is well document the pressures politician are under to keep the Status Quo. It is hope that pressure on offending corporations by citizens and citizen groups will give legislators “cover” to act.

The key to a sound Middleclass Capitalistic System wage is that all the cost of a product/service should be passed to the consumer in the price of that product or service. The cost should include material, equipment and labor. If the wage paid is less than the cost of a worker to support her/his self you do not have a capitalistic system you have some form of a socialist or corporate socialist system. In America if the wage paid is less than the living wage in an area the difference is provided by the taxpayers via various social programs.

Work is changing along with the compensation for that work is changing, to preclude the change from driving the wages of the new workforce lower than a Middleclass Wage we need define what we expect from businesses and corporations. We don’t want to define what the new work is or the structure or shape of a new organizations but we do want to define wages if a corporation sells products or services in United States we want to assure that corporation has a middle-class wage scale.

The concept of a minimum or maximum wage has been around for centuries in the 1300 because of the black plague which killed many workers; King Edward III set a maximum wage. In the 1600s King James I formalized the minimum wage for textile workers. In earlier times minimum wage was synonymous to living wage, that is a wage that would pay an individual for food, medical, housing, transportation and other basic essentials. Adam Smith talked about the need for employees to receive a living wage. And in 1909 Winston Churchill commented in the House of Commons “it’s a serious national evil that a class of his Majesty’s subject should receive less than a living wage and return for their utmost exertions”

Since the end of the feudal system and before the beginning of the Industrial Revolution scholars and businessmen have been debating what a fair wage should be.  We now have a tool that can calculate what wage one adult requires for food, healthcare, housing, transportation, taxes, child support, and other basic necessities. The tool is the living wage calculator developed by a group many of which are now located at MIT. The number is based on seven factors using federal and state data. Although this number varies from state to state with Maryland being the highest and Mississippi the lowest it provides a floor for wages in any location in the nation. For the first time we can move from philosophical to an actual number of what is required for an individual to maintain the basic necessities in the United States. From my viewpoint the cost of retirement needs to be included as an eight factor to the calculator. (Financial planners estimate that 70% to 80% of preretirement income is needed to maintain the same lifestyle.[1] To achieve the financial planner’s general guidelines requires saving 10% to 15% a year starting in your 20’s.[2]  Until the “experts” factor retirement into the living wage a good estimate would be to add 12% {about ½ way between 10% and 15%} to the living wage for retirement.) Using the living calculator and adding the additional cost of retirement we can produces a number that we will argue is the minimum wage an individual should be paid if we are to maintain the American Dream. It is interesting to note that in 1960 a list of individual’s expenditure for tobacco and alcoholic beverages are listed as individual’s expenditure but retirement is not.

In addition we can use the calculator to determine what the journeyman salaries should be if we are to maintain our current population. The number of children that families has often depends on their wages, to maintain the current population 2.1 is the number of children required anything less and America’s population will fall. The floor for the journey persons wage is the salary for two adults (one working) with 2.1 children which can be calculated using the living wage calculator with retirement added.

The floor for a minimum wage is the living wage plus retirement for one person this should be legislated so the companies don’t try to find ways to subvert. Before legislating a journeyman’s middle-class wage attempts to use social media pressure on corporations to pay journeyman’s middle-class wage should be tried. Some corporations realize that paying a middle-class wage is in their own interest.

Besides wages the third social pressure should be brought on corporations to provide jobs in a country that at least equals the sale in that country. Example if 70% sales are in a nation than 70% of the workforce of that corporation should be in that nation. Corporations that use tactics like the use of H1B visas to lower salaries should join the” Blacklist” of corporations that do not pay a middle-class wage.

Other nations may follow our lead which is fine. It will bring us to a time where good corporations need to be great and solve problems not using congressional influence and financial management to stay in business.

Instead of complaining or joining the silent majority citizens should insist that their congressional delegates support the living wages defined above and corporations operating in America support the concept of a Middleclass Capitalistic System.

This is an extract from a forth coming book titled Middleclass Capitalism – Keeping the American Dream and the American Middleclass Alive. A book which numerates way individuals and citizen groups can influence the future of the middleclass without involving (or minimum involvement with) the current political system.

 

 

[1] FCS7251/FV 1355 edis.IFAS.UFL.EDU

[2] http://money.cnn.com/retirement/guide/basics…basics.money.mag/index7.htm