Monday, September 7, 2015
A Celebration of Workers -Happy Labor Day!
This weekend many of us are celebrating the last throes of summer (I'm working -however it is for a good cause -so I'm not bitter about it. Generally not too bitter -that is until I see the picnics on the beach, the kite's drifting by and the happy sounds of families playing).
Americans work hard -we work longer hours, and generate more productivity while taking less vacation than anywhere else in the world. We do this to provide a better life for ourselves and our families.
The real war on American workers
Over the past few generations -the American worker has been an unwitting participant in an all-out economic war. Through tax policy, privatization and the attack on labor unions the quality of life and political power of the American working class has been effectively marginalized. In Lewis Powell's confidential memo to the U.S. Chamber of Commerce in August of 1971 -he describes an America where labor has become too strong politically -and he provides the strategy which has led to the growing economic disparity today between the obscenely wealthy and everyone else. Powell was later nominated to serve on the U.S. Supreme Court by Richard Nixon.
Battlefield: Tax Fairness
For every hour we work we generate value. Some of that value is hopefully returned to us. Some of the value may go to the owner of the business we work for. Some of the value may go into government to pay for roads, highways, bridges, schools, police, fire and defense (a great deal goes into defense). Some value may go toward our retirement security. The value that is generated goes to us, ownership and government. In the late 1970's the federal income tax rate for those earning more than $200,000 per year was 70%. Over the course of the Reagan Administration -taxes on the wealthiest American's fell to 28% while increasing for the middle class. This means that for the average worker -for each hour -you were paying the government more -to make up for the wealthy paying less. Tax policy (income taxes, estate taxes, taxes on investment gains and corporate taxes) are just one battlefield in which the average American worker is losing.
Another significant battlefield is on wages. Beginning in the late 1980's -and as American worker productivity was continuing to climb higher -Executive salary was skyrocketing. It's easy to understand why. An easy example is as follows. Let's say you own a business and you employ 100 workers and you pay them $8.00 an hour (above the $7.25/hour minimum wage). Those workers are each responsible for producing $50,000 of profit each year for your business. You now have $5,000,000 of profit at the end of the year.
A) You could pay a bonus to each of your workers of $40,000 each -and still pay yourself a hefty bonus of $1,000,000. You could also double the wages of your workers (to $16.00) and hour -and if your business remained the same year over year -you'd still have a significant profit at the end of every year.
B) You could pay a bonus (dividends) to shareholders of $2,000,000 congratulate yourself with a $3,000,000 bonus and buy each of your workers a turkey (while encouraging them to apply for Food Stamps and other taxpayer funded benefits -you know, the WalMart business model). And by the way -you own a majority of the stock and collect most of the stock dividends so even a large part of $2,000,000 in stock dividends makes its way to your bank account.
Most CEO's and executives opt for the "WalMart" wage model. The chart above serves as evidence of that fact. And is also important to understand why "trickle down economics" is really nothing more than a massive fraud perpetrated upon American society by the wealthy (and the GOP party that they control). What do you think is better for the economy? One person with $5,000,000 in their pocket (you know, the "job creator") or one hundred workers with $40,000 each to spend. This is why an American worker making a living wage -reaping a decent amount of value from his or her productivity is so vital to our economic strength (and America). It is the working class/middle class engine that fuels American strength and growth. The consolidation of wealth (and power) to the top 1% works incredibly well for the 1%. It makes us more fragile as a nation -it weakens America and diminishes the future we could all have.
In an article from The Atlantic by Gillian White, Jan Rivkin an economist and senior associate dean for research at Harvard said "From the end of WWII until the 1970s productivity in the U.S. and median wages grew in lockstep. But from the late 1970s until today we've seen a divergence, with productivity growing faster than wages. The divergence indicates that companies and the people who own and run them are doing much better than the people who work at the companies." In other words -the workers create value (profit) -and this productivity or value is taken from them with a pat on the back and a "thanks, you might get to do this again tomorrow" and it is paid to the executives.
Let's face it. Trickle down economics works beautifully. It does precisely what it is designed to do -move money, power and quality of life from the poor, working poor and middle class to the obscenely wealthy. It is not a failed economic theory. And it's not accidentally stupid. It is massive legalized fraud -and every time someone votes for the GOP they are simply perpetuating the stealing of our quality of life -and that of our children and grandchildren.
We are working longer hours and harder -for less. And the GOP response from Presidential Candidate Jeb Bush? "You aren't working hard enough". Nevertheless -take a look at the chart below. When we work harder and longer -we have less time with our families, less time to raise our children, care for our elders or become involved in our schools and community. We live paycheck to paycheck and are ruled by fear, anxiety and economic uncertainty. When we are fearful -we are easier to control.
Our historical struggle to unite and collectively bargain has been under siege since Reagan fired all of the Air Traffic Control workers (the PATCO strike of 1981).
Since that time -Union power has continued to be attacked by "Right to Work" or anti-Collective Bargaining initiatives (which are really thinly-veiled Orwellian phrases for employers can do whatever they want, anytime they want), the "WalMart" business model, the offshoring of manufacturing and other jobs and the Koch-brothers funded attack on Unions led by Scott Walker in Wisconsin, John Kasich in Ohio and many other GOP candidates and elected officials. The attacks are waged through legislation, ballot initiatives and court challenges that effectively diminish the political strength of Unions and the ability for workers to collectively bargain for fair wages and benefits.
While Unions must modernize and recognize that they must advocate strongly for workers -they must also work collaboratively to derive the best outcomes for the workers they represent and society as a whole. And we must honor and remember all those that have struggled, fought and died so we can unite and demand that our work is valued properly, that we can rebuild the American dream and that we are all brothers and sisters together working for a better life for our children and our future.