A Thousand Words August 17, 2012Posted by rogerhollander in Economic Crisis, History.
Tags: american way, bread line, class, depression, history, inequality, middle class, poverty, roger hollander, standard of living
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Wal-Mart: 50 Years of Gutting America’s Middle Class July 8, 2012Posted by rogerhollander in Economic Crisis.
Tags: big-box, economy, labor, middle class, retail business, roger hollander, sam walton, stacy mitchell, walmart
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Walmart’s explosive growth has gutted two key pillars of the American middle class: small businesses and well-paid manufacturing jobs
Movie poster detail from the documentary, ‘Walmart: The High Cost of Low Price’.
Sam Walton opened the first Walmart store in Rogers, Arkansas, 50 years ago this month. Sprawled along a major thoroughfare outside the city’s downtown, that inaugural store embodied many of the hallmarks that have since come to define the Walmart way of doing business. Walton scoured the country for the cheapest merchandise and deftly exploited a loophole in federal law to pay his mostly female workforce less than minimum wage.
That relentless focus on squeezing workers and suppliers for every advantage has paid off since July 1962. Walmart is now the second-largest corporation on the planet. It took in almost half-a-trillion dollars last year at more than 10,000 stores worldwide.
Walmart now captures one of every four dollars Americans spend on groceries. Its stores are so plentiful that it’s easy to imagine that the retailer has long since reached the upper limit of its growth potential. It hasn’t. Walmart has opened over 1,100 new supercenters since 2005 and expanded its U.S. sales by 35 percent. It aims to keep on growing that fast. With an eye to infiltrating urban areas, Walmart recently introduced smaller “neighborhood markets” and “express” stores.
Whatever we may have saved shopping at Walmart, we’ve more than paid for it in diminished opportunities and declining income.
While the big-box business model Sam Walton pioneered half a century ago has been great for Walmart, it hasn’t been so great for the U.S. economy.
Walmart’s explosive growth has gutted two key pillars of the American middle class: small businesses and well-paying manufacturing jobs.
Between 2001 and 2007, some 40,000 U.S. factories closed, eliminating millions of jobs. While Walmart’s ceaseless search for lower costs wasn’t the only factor that drove production overseas, it was a major one. During these six years, Walmart’s imports from China tripled in value from $9 billion to $27 billion.
Small, family-owned retail businesses likewise closed in droves as Walmart grew. Between 1992 and 2007, the number of independent retailers fell by over 60,000, according to the U.S. Census.
Their demise triggered a cascade of losses elsewhere. As communities lost their local retailers, there was less demand for services like accounting and graphic design, less advertising revenue for local media outlets, and fewer accounts for local banks. As Walmart moved into communities, the volume of money circulating from business to business declined. More dollars flowed into Walmart’s tills and out of the local economy.
In exchange for the many middle-income jobs Walmart eliminated, all we got in return were low-wage jobs for the workers who now toil in its stores. To get by, many Walmart employees have no choice but to rely on food stamps and other public assistance.
Walmart’s history is the story of what has gone wrong in the American economy. Wages have stagnated. The middle class has shrunk. The ranks of the working poor have swelled. Whatever we may have saved shopping at Walmart, we’ve more than paid for it in diminished opportunities and declining income.
And the worse things get, the more alluring Walmart’s siren call of low prices becomes. While the Ford Motor Co. once profited by creating a workforce that could afford to buy its cars, today Walmart profits by ensuring that Americans cannot afford to shop anywhere else. The average family of four now spends over $4,000 a year at Walmart.
Such market concentration is unprecedented in U.S. history, as is the concentration of wealth it has engendered. Sam Walton’s heirs own about half of Walmart’s stock and have a net worth equal to the combined assets of the bottom one-third of Americans — about 100 million people. This year alone, the Waltons will pocket $2.7 billion in dividends from their Walmart holdings.
They are among the few Americans who have reason to celebrate Walmart’s 50th birthday. As for the rest of us, the milestone offers a good moment to reflect on the company’s business model and where it might lead us if we allow Walmart’s growth to continue full-steam for another 50 years.
Stacy Mitchell is a senior researcher with the Institute for Local Self-Reliance, which challenges the wisdom of economic consolidation and works to advance policies that build strong local economies. Stacy directs initiatives on community banking and independent retail. She is the author of Big-Box Swindle and produces a popular monthly bulletin called the Hometown Advantage.
What We Learned From One Year Of Mitt Romney’s Taxes January 28, 2012Posted by rogerhollander in 2012 Election, Economic Crisis, LGBT.
Tags: george romney, judd legum, middle class, mitt romney, republicans, roger hollander, tax evasion, tax shelters, taxes
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After resisting for months, Mitt Romney finally released one year of his tax returns this week. Here’s what we learned (click to enlarge):
Mitt Romney’s father George released 12 years of his taxes when he ran for president in 1968, stating, “One year could be a fluke, perhaps done for show.” Please sign our petition and help us put the pressure on Romney to follow his father’s example.
President Obama Wants You to Join the Union February 8, 2009Posted by rogerhollander in Barack Obama, Economic Crisis, Labor.
Tags: bailouts, chamber of commerce, change to win, democrats, Economic Crisis, efca, fdr, franklin delano roosevelt, free choice act, hilda solis, Jimmy Carter, joe biden, john l. lewis, labor, labour, middle class, president obama, recovery package, republicans, responsible contractor, right to organize, robert kuttner, roger hollander, unions, united mine workers, wagner act, Wall Street, workers, workers rights
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01 February 2009
by: Robert Kuttner, The Huffington Post
I do not view the labor movement as part of the problem, to me it’s part of the solution.
- President Barack Obama, January 30, 2009
The great union leader John L. Lewis, who headed the United Mine Workers from the ’30s through the ’50s and helped organize millions of workers into the CIO, used to declare in organizing drives: “President Roosevelt wants you to join the union.” Roosevelt never said that in so many words, but FDR did strongly back the Wagner Act, giving workers the clear right to organize.
During World War II, Roosevelt’s War Labor Board made clear that corporations seeking war contracts needed to have good labor relations. In practice, that meant unions; and it meant “pattern bargaining” in which workers for different companies in the same industry got the same wages, so that companies could not play workers off against each other.
Roosevelt’s wartime contracting policies, the Wagner Act, and the militancy of the labor movement laid the groundwork for the golden age of American unions during the postwar boom. Not coincidentally, this was also the one period in the past century when the economy became more equal, and more secure for working people.
So, while Roosevelt’s words never quite urged workers to join unions, his deeds spoke volumes. John L. Lewis was well within the bounds of poetic license.
On Friday, President Obama, a onetime organizer, had more words to say about unions, and they were the kind of explicit endorsement that we literally haven’t heard from a president since FDR’s day.
“We need to level the playing field for workers and the unions that represent their interests, because we know that you cannot have a strong middle class without a strong labor movement,” the President said. “When workers are prospering, they buy products that make businesses prosper. We can be competitive and lean and mean and still create a situation where workers are thriving in this country.”
And Obama offered deeds to match. This stunning declaration of support came at the White House announcement of a Task Force on Middle Class Working Families headed by Vice President Biden, with Jared Bernstein as its executive director. The idea was proposed last summer by Change to Win unions, who endorsed candidate Obama early in the primary season. He embraced the concept, and it was a commitment he kept. His remarks and actions were a dazzling example of the transformative power of a president to shift public opinion and the political center of gravity.
The task force, and the effusive and genuine embrace of the labor movement, came as a huge relief to union leaders, who have watched anxiously as nearly all the key economic posts went to centrist veterans of the Clinton administration, and the job of secretary of labor was not announced with the other senior economic officials. As it turned out, the appointment of Hilda Solis, a very pro-union member of Congress, was delayed because others had turned down the job first, but the delay sent an unfortunate signal.
Labor activists have also been worried about whether Obama will keep his pledge not just to sign the Employee Free Choice Act (EFCA) guaranteeing the right to join a union, but to work hard on its behalf with legislators, especially in the Senate. Since the election, the US Chamber of Commerce and allied anti-union business organizations have mounted a furious publicity and lobbying offensive with one message: Mr. President, you don’t need this bruising fight right now.
But the Chamber’s allies in the Republican House Caucus have beautifully undercut that logic. The Chamber’s premise was that EFCA would be highly divisive, at a time then the new president was seeking unity. With the wall-to-wall Republican stonewalling on the Obama recovery package, that premise is up in smoke. And the Chamber’s other allies, on Wall Street, have also done a service by inviting some salutary class warfare. Obama responded last week, calling Wall Street bonuses in the face of government bailouts “shameful,” and seems to genuinely view the growth of unions as a necessary counterweight.
The task force itself will be a welcome counterweight to the outsized influence of Wall Street inside the Obama administration. Several weeks ago, Jared Bernstein, then a senior economist at the Economic Policy Institute, wrote a joint op-ed piece for the New York Timeswith Robert Rubin pointing out where they agreed. One issue where they pointedly disagreed was on the Employee Free Choice Act, which Rubin explicitly refused to endorse. The Biden operation now looks to be the go-to place for progressives seeing access to Obama’s priorities. The Task Force will serve as the White House center to review all proposals, legislative and administrative, for their impact on the effort to raise wages and rebuild a middle class.
Without Obama’s strong personal engagement, EFCA will be anything but a legislative cakewalk. Democrats may have a working majority. But at least five business-oriented Democrats are not considered certain votes for EFCA, and Obama will need to let them know that the White House considers this bill a top priority.
Our last two Democrats went out of their way not to get close to organized labor. Jimmy Carter did not lift a finger when the last big push to put some teeth back in the Wagner Act’s right to unionize went down to defeat by just two votes in the Senate in 1978.
On Friday, announcing the Task Force, Obama signed three executive orders. One will prevent federal contractors from discouraging their employees to join unions. Another will assure that workers keep their jobs when a contract changes hands. Down the road is an executive order to promote project agreements on construction contracts.
If Obama is serious, he can take a leaf from FDR’s book, and use government’s extensive contracting power to actively promote unions. Late in the Clinton administration, then Vice President Al Gore led an effort called the Responsible Contractor Initiative. The idea was to reward federal contractors who took the high road by providing good jobs and not standing in the way of unions.
It remains to be seen just how much real power Obama will give Vice President Biden. But the task force is a superb beginning. If government can just use its influence to make sure employers stay neutral, it will be a new day for the labor movement – and for American progressivism.
Robert Kuttner is co-editor of The American Prospect. His new book is “Obama’s Challenge: America’s Economic Crisis and the Power of a Transformative Presidency.”
Unions Aren’t the Problem December 9, 2008Posted by rogerhollander in Economic Crisis, Labor.
Tags: anti-unionism, auto industry, bailout, banks, benefits, capitalists, cars, congress, credit crisis, deregulation, detroit, Economic Crisis, economy, energy, income, insurance, labor, labour, main street, marie cocco, middle class, money, roger hollander, taxpayer, trickle down, unions, wages, Wall Street, workers
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Posted on Dec 9, 2008
By Marie Cocco
As Congress and the White House lurch toward possible approval of a loan package for the crippled auto industry, we are undoubtedly in store for more union-bashing. Note well that we did not hear any such tirades when vastly larger sums of taxpayer money—with fewer strings attached—were lavished upon the banks and financial industry wizards who created the credit crisis.
Put aside for a moment the misinformation and outright untruths that characterize conservative attacks on the autoworkers’ unions. No one should be allowed to cast blame on workers who want nothing more than to maintain a middle-class life.
Unions aren’t the problem. They are the solution.
Creating a viable middle class has been the goal of organized labor since labor first became organized. And it is this goal that was abandoned outright by American political and business leaders as they did all they could over the past three decades to encourage a relentless race to the bottom in wages and benefits.
Strip away the financial mumbo jumbo and the credit crisis comes down to this: For decades, as wages and benefits for working and middle-class people stagnated or fell, the only way for them to purchase the goods that make the economy hum was through credit. This was true whether the item purchased was a home, a car—or all the unnecessary gizmos that retailers have been more than happy to tell consumers were the must-haves of the day. Until we understand that we are in the midst of two crises—one the short-term credit crisis and one the longer-term crisis in the failure to pay workers what they need to sustain themselves—we are doomed to repeat this horror.
“If you are a man with only a high school education … your chances of making a wage or salary as good as what your father was making in the late 1970s are not good,” says Gary Gerstle, a Vanderbilt University historian. “We are looking at a deterioration in their life opportunities and living standards, at the same time that an enormous amount of wealth has accumulated at the top of the income ladder.”
It is true that some individuals were reckless in taking on debt. But it is equally valid that American workers simply haven’t been paid what it takes for them to spend enough to keep the American economy growing. “The economy needed levels of expenditure and consumption that most Americans literally could not afford,” Gerstle says.
What do unions have to do with this? To start with, unionized workers make about $200 more per week than do nonunion workers, according to the Bureau of Labor Statistics. The great expansion of the American middle class and an unprecedented rise in living standards occurred between the end of World War II and the 1970s—when unions were far more common and powerful than they are today. Beginning in the 1980s, an ideology of deregulation and anti-unionism took hold, with free-market capitalists arguing that no intervention in the markets—including labor’s intervention—was ever beneficial.
“The promise of deregulation was that this would create so much energy and dynamism at the top that it would all trickle down,” Gerstle says. “Not only would people on Wall Street make all kinds of money, but people on Main Street would find that there would be more dynamism in their lives, more opportunity, more wages.”
Well, people on Wall Street did make all kinds of money. People on Main Street got depressed wages, the demise of guaranteed pensions and 401(k)s that crashed with the stock market. They got health insurance that is barely affordable, if they’ve got insurance at all.
We are engulfed by an economic morass that holds the prospect of being the deepest and broadest downturn of the post-World War II era. It is no coincidence that the percentage of private-sector workers in unions—about 7 percent—is roughly the same as what it was before the Great Depression. Historically, Gerstle says, social movements have needed direct and often unsettling action to capture the public’s imagination and take hold.
This is why we can only hope that events such as the unfolding peaceful occupation of a Chicago window factory by its newly laid-off workers is the start of something much, much bigger.
Marie Cocco’s e-mail address is mariecocco(at)washpost.com.