The Minimum Wage, Executive Bonuses And Class Justice

Some of the largest banks are paying billions of dollars more to their executives just months after they got bailed out. Most of these banks are showing increased profits and are paying the executives as much as, or even more than, they did in the pre-crisis days, which now seems like so long ago. The leading six U.S. banks are giving their executives $74 billion, up from $60 billion in the corresponding period last year.

Goldman Sachs disclosed that they have a record $6.6 billion for compensation expenses in the most recent quarter, bringing the total for the first six months of the year to over $11 billion. Goldman earned a record $3.4 billion for the second quarter and, along with J.P. Morgan Chase, is likely to be one of the strongest banks to emerge from the crisis. Have you noticed the new Chase banks all over Oregon?

Morgan Stanley has reported that they set aside $6 billion so far this year for executive compensation expenses even as they reported taking a third straight quarterly loss. They lost $1.26 billion, including an $850 million expense related to paying the government back after its alleged bailout. The company set aside $3.9 billion for executive compensation bonuses for this quarter. This represents 72 percent of its revenue for the quarter.

Some drain on the economy and some slap in the face to society, right?

But this morning as I drove to work what I heard on the radio were dire predictions about the damage that might be done with the increase in the minimum wage. Raising the pay of the poorest paid workers will kill small businesses and stall economic recovery, the economists said.

That's nonsense. This capitalist economy can recover by raising living standards, stabilizing prices and costs and taking some major costs (like healthcare) off of the backs of workers. The US can run deficits and experience a short period of inflation and still recover from the crises caused in large part by these banks and globalized industry. Employers have a choice: they can take their capital elsewhere or they can improve production and distribution methods. Increasing the minimum wage will not aggravate or cause another crisis.

But what about these banks and bankers? Why are the poorest workers being held up as the problem while these executives walk away laughing?