Thread by @ArashKolahi

If income had simply increased at the same rate as productivity (no more, no less), the vast majority of workers could be working just 12 hours a week & making the *same* income as they are making now full-time.

EVERYTHING they don’t want you to know about income. Thread 1/22

Put differently, if our income had increased at the same rate as worker productivity (no more, no less), the vast majority of workers who are working full-time would be making approximately three times the income they are making right now.

Three times! 2/22

If the minimum wage were simply adjusted for inflation & standard of living based on 1968 as a benchmark (no more, no less), the minimum wage in the US today would be over $20 an hour.

That’s more than double the current minimum wage. 3/22

How different would our lives be right now if we could make our current income working just 12 hours a week, or continue to work full-time and make three times the income? Or what if we had adjusted the minimum wage to a level comparable to 1968? 4/22

But adjusting income for productivity gains or inflation is still not technically *equitable*. While these are important steps that will vastly improve the lives of millions of workers, ultimately, we should strive towards inherently fair & equitable wages. 5/22

Equity means:

1. We shouldn’t be rewarded or punished for things we have no control over.

2. For things we do have control over, the benefits & burdens should be fairly distributed.

More on fairness & equity: 6/22

https://twitter.com/ArashKolahi/status/1146165768356270086

In other words, the only fair & equitable criteria for wages are things we have actual control over, like how hard we work, our effort, sacrifice and/or duration of work.

Let’s demonstrate how this works in economic terms: 7/22

Sometimes economists use the analogy of a giant pie to represent the entire output of the economy during a given year. This can be a helpful way of conceptualizing income in economic terms. 8/22

So, if we think of the total output of all of our collective economic work as a giant pie that is then to be distributed among all the workers who contributed to making it, our income can be thought of as our claim to our share of the pie we all made together. 9/22

Let’s say, theoretically, we divide up the pie into equal pieces to be divided up equally among all workers who contributed to making it, each slice would be roughly $130,000 per year*. 10/22

*2018 US Gross Domestic Income / # employed at the time

Of course, if wages were equitable, some might earn a bit more or a bit less than $130,000 per year for greater or less than average effort or sacrifice or duration of work. 11/22

But there are a few key takeaways.

First, if wages were equitable, the average worker, working the average duration at an average effort, should receive the average income of roughly $130,000 per year. 12/22

This isn’t a thought dream or hypothetical. This is an economic fact.

If you are putting in an avg duration of work at an avg effort & sacrifice and are making less than $130,000 per year, you are being robbed of your fair share of the pie. 13/22

The 2nd takeaway is that if wages were equitable, some might earn a bit more or a bit less to fairly compensate their level of effort, sacrifice, or duration of work. It’s conceivable that maybe someone might work 2x as long or hard, or maybe even 3x as long or hard. 14/22

But no one & I mean no one can conceivably work 100x, or 1,000x or 10,000 times longer or harder than anyone else.

And if wages were truly equitable, there would no longer be the huge disparities of income we have now. 15/22

This begs the question, why is income so inequitable? Why isn’t our average income about $130,000 per year as it would be if income were equitable?

The answer is that with capitalism, wages are a function of relative bargaining power – not fairness: 16/22

https://twitter.com/ArashKolahi/status/1210332075787608065?s=20

And what about those who are unable to work due to disability etc.?

I think a humane & equitable society that elevates solidarity & compassion would provide a dignified average income to those who are unable to work. 17/22

Okay, so where do we go from here?

First & foremost we need to lift the economy from the bottom up. There’s no economic reason why we can’t have full employment & wage-led growth.

Minimum wage should be AT LEAST comparable to 1968 levels: ~$25/hour 18/22

Second, we need to fight back against the 50-years long one-sided class war against labor. So long as we must suffer under capitalism, bargaining power is everything. CEOs & executives know it and are doing everything they can to weaken labor’s bargaining power. 19/22

Third, we need the right rhetoric. The truth is most workers are being *robbed* of their fair share of the pie. Most are being paid less than equitably.

We’re being *robbed* by those who take more than their fair share is the correct framework. 20/22

https://twitter.com/ArashKolahi/status/1207713334285352960?s=20

Finally, as we fight to increase wages from the bottom up, we need to also raise consciousness of capitalism’s inherent failings & work towards a society that is inherently fair, equitable & democratic. 21/22

https://twitter.com/ArashKolahi/status/1130880976601534464?s=20

Capitalism is inherently inequitable, undemocratic, alienating, inefficient & environmentally destructive.

Its time is up. 22/22

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