How the McEconomy Bombed the American Worker May 9, 2011Posted by rogerhollander in Economic Crisis, Labor.
Tags: andy kroll, Economic Crisis, economy, fast food workers, gas prices, housing market, jobs, labor, labor history, labour, mcdonalds, mceconomy, mcjobs, roger hollander, unemployment, unions, wages, workers, working class
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www.tomdispatch.com, May 8, 2011
While President Obama has seen a sizeable jump in his approval ratings in the wake of the killing of Osama bin Laden, scratch beneath the surface of those polls and you’ll find another story entirely. Check out his figures when it comes to the economy, and there, Osama bin Laden and all those “USA! USA!” chanting crowds aside, his approval rating just hit a new low.
Killing bin Laden, Libya’s Gaddafi, and Iran’s Ahmedinejad, for that matter, isn’t likely to win an election for an American president these days. As in Bill Clinton’s famed 1992 election campaign against George H.W. Bush (who also garnered headlines for foreign policy “successes”), the mantra is still: “It’s the economy, stupid.” The job market (or lack of it), rising food and gas prices, a housing market that remains in a state of collapse — you know the story. Right now, it looks as if someone had flown a hijacked plane directly into the economy. For example, among young people, a key Obama demographic, more than four million Americans ages 16 to 24 are out of work.
And if you think that the usual numbers are dismal, just wait until you dig under them with TomDispatch Associate Editor Andy Kroll and consider the way the American economy and its workers are being Third-World-ized. This remains a wealthy country with significant resources, which makes it all the eerier that it’s beginning to feel as if the phrase “banana republic” might one of these days apply. (To catch Timothy MacBain’s latest TomCast audio interview in which Kroll discusses what grim news lurks under the monthly unemployment figures, click here, or download it to your iPod here.) Tom
How the McEconomy Bombed the American Worker
The Hollowing Out of the Middle Class
By Andy Kroll
Think of it as a parable for these grim economic times. On April 19th, McDonald’s launched its first-ever national hiring day, signing up 62,000 new workers at stores throughout the country. For some context, that’s more jobs created by one company in a single day than the net job creation of the entire U.S. economy in 2009. And if that boggles the mind, consider how many workers applied to local McDonald’s franchises that day and left empty-handed: 938,000 of them. With a 6.2% acceptance rate in its spring hiring blitz, McDonald’s was more selective than the Princeton, Stanford, or Yale University admission offices.
It shouldn’t be surprising that a million souls flocked to McDonald’s hoping for a steady paycheck, when nearly 14 million Americans are out of work and nearly a million more are too discouraged even to look for a job. At this point, it apparently made no difference to them that the fast-food industry pays some of the lowest wages around: on average, $8.89 an hour, or barely half the $15.95 hourly average across all American industries.
On an annual basis, the average fast-food worker takes home $20,800, less than half the national average of $43,400. McDonald’s appears to pay even worse, at least with its newest hires. In the press release for its national hiring day, the multi-billion-dollar company said it would spend $518 million on the newest round of hires, or $8,354 a head. Hence the Oxford English Dictionary’s definition of “McJob” as “a low-paying job that requires little skill and provides little opportunity for advancement.”
Of course, if you read only the headlines, you might think that the jobs picture was improving. The economy added 1.3 million private-sector jobs between February 2010 and January 2011, and the headline unemployment rate edged downward, from 9.8% to 8.8%, between November of last year and March. It inched upward in April, to 9%, but tempering that increase was the news that the economy added 244,000 jobs last month (not including those 62,000 McJobs), beating economists’ expectations.
Under this somewhat sunnier news, however, runs a far darker undercurrent. Yes, jobs are being created, but what kinds of jobs paying what kinds of wages? Can those jobs sustain a modest lifestyle and pay the bills? Or are we living through a McJobs recovery?
The Rise of the McWorker
The evidence points to the latter. According to a recent analysis by the National Employment Law Project (NELP), the biggest growth in private-sector job creation in the past year occurred in positions in the low-wage retail, administrative, and food service sectors of the economy. While 23% of the jobs lost in the Great Recession that followed the economic meltdown of 2008 were “low-wage” (those paying $9-$13 an hour), 49% of new jobs added in the sluggish “recovery” are in those same low-wage industries. On the other end of the spectrum, 40% of the jobs lost paid high wages ($19-$31 an hour), while a mere 14% of new jobs pay similarly high wages.
As a point of comparison, that’s much worse than in the recession of 2001 after the high-tech bubble burst. Then, higher wage jobs made up almost a third of all new jobs in the first year after the crisis.
The hardest hit industries in terms of employment now are finance, manufacturing, and especially construction, which was decimated when the housing bubble burst in 2007 and has yet to recover. Meanwhile, NELP found that hiring for temporary administrative and waste-management jobs, health-care jobs, and of course those fast-food restaurants has surged.
Indeed in 2010, one in four jobs added by private employers was a temporary job, which usually provides workers with few benefits and even less job security. It’s not surprising that employers would first rely on temporary hires as they regained their footing after a colossal financial crisis. But this time around, companies have taken on temp workers in far greater numbers than after previous downturns. Where 26% of hires in 2010 were temporary, the figure was 11% after the early-1990s recession and only 7% after the downturn of 2001.
As many labor economists have begun to point out, we’re witnessing an increasing polarization of the U.S. economy over the past three decades. More and more, we’re seeing labor growth largely at opposite ends of the skills-and-wages spectrum — among, that is, the best and the worst kinds of jobs.
At one end of job growth, you have increasing numbers of people flipping burgers, answering telephones, engaged in child care, mopping hallways, and in other low-wage lines of work. At the other end, you have increasing numbers of engineers, doctors, lawyers, and people in high-wage “creative” careers. What’s disappearing is the middle, the decent-paying jobs that helped expand the American middle class in the mid-twentieth century and that, if the present lopsided recovery is any indication, are now going the way of typewriters and landline telephones.
Because the shape of the workforce increasingly looks fat on both ends and thin in the middle, economists have begun to speak of “the barbell effect,” which for those clinging to a middle-class existence in bad times means a nightmare life. For one thing, the shape of the workforce now hinders America’s once vaunted upward mobility. It’s the downhill slope that’s largely available these days.
The barbell effect has also created staggering levels of income inequality of a sort not known since the decades before the Great Depression. From 1979 to 2007, for the middle class, average household income (after taxes) nudged upward from $44,100 to $55,300; by contrast, for the top 1%, average household income soared from $346,600 in 1979 to nearly $1.3 million in 2007. That is, super-rich families saw their earnings increase 11 times faster than middle-class families.
What’s causing this polarization? An obvious culprit is technology. As MIT economist David Autor notes, the tasks of “organizing, storing, retrieving, and manipulating information” that humans once performed are now computerized. And when computers can’t handle more basic clerical work, employers ship those jobs overseas where labor is cheaper and benefits nonexistent.
Another factor is education. In today’s barbell economy, degrees and diplomas have never mattered more, which means that those with just a high school education increasingly find themselves locked into the low-wage end of the labor market with little hope for better. Worse yet, the pay gap between the well-educated and not-so-educated continues to widen: in 1979, the hourly wage of a typical college graduate was 1.5 times higher than that of a typical high-school graduate; by 2009, it was almost two times higher.
Considering, then, that the percentage of men ages 25 to 34 who have gone to college is actually decreasing, it’s not surprising that wage inequality has gotten worse in the U.S. As Autor writes, advanced economies like ours “depend on their best-educated workers to develop and commercialize the innovative ideas that drive economic growth.”
The distorting effects of the barbell economy aren’t lost on ordinary Americans. In a recent Gallup poll, a majority of people agreed that the country was still in either a depression (29%) or a recession (26%). When sorted out by income, however, those making $75,000 or more a year are, not surprisingly, most likely to believe the economy is in neither a recession nor a depression, but growing. After all, they’re the ones most likely to have benefited from a soaring stock market and the return to profitability of both corporate America and Wall Street. In Gallup’s middle-income group, by contrast, 55% of respondents claim the economy is in trouble. They’re still waiting for their recovery to arrive.
The Slow Fade of Big Labor
The big-picture economic changes described by Autor and others, however, don’t tell the entire story. There’s a significant political component to the hollowing out of the American labor force and the impoverishment of the middle class: the slow fade of organized labor. Since the 1950s, the clout of unions in the public and private sectors has waned, their membership has dwindled, and their political influence has weakened considerably. Long gone are the days when powerful union bosses — the AFL-CIO’s George Meany or the UAW’s Walter Reuther — had the ear of just about any president.
As Mother Jones‘ Kevin Drum has written, in the 1960s and 1970s a rift developed between big labor and the Democratic Party. Unions recoiled in disgust at what they perceived to be the “motley collection of shaggy kids, newly assertive women, and goo-goo academics” who had begun to supplant organized labor in the Party. In 1972, the influential AFL-CIO symbolically distanced itself from the Democrats by refusing to endorse their nominee for president, George McGovern.
All the while, big business was mobilizing, banding together to form massive advocacy groups such as the Business Roundtable and shaping the staid U.S. Chamber of Commerce into a ferocious lobbying machine. In the 1980s and 1990s, the Democratic Party drifted rightward and toward an increasingly powerful and financially focused business community, creating the Democratic Leadership Council, an olive branch of sorts to corporate America. “It’s not that the working class [had] abandoned Democrats,” Drum wrote. “It’s just the opposite: The Democratic Party [had] largely abandoned the working class.”
The GOP, of course, has a long history of battling organized labor, and nowhere has that been clearer than in the party’s recent assault on workers’ rights. Swept in by a tide of Republican support in 2010, new GOP majorities in state legislatures from Wisconsin to Tennessee to New Hampshire have introduced bills meant to roll back decades’ worth of collective bargaining rights for public-sector unions, the last bastion of organized labor still standing (somewhat) strong.
The political calculus behind the war on public-sector unions is obvious: kneecap them and you knock out a major pillar of support for the Democratic Party. In the 2010 midterm elections, the American Federation of State, County, and Municipal Employees (AFSCME) spent nearly $90 million on TV ads, phone banking, mailings, and other support for Democratic candidates. The anti-union legislation being pushed by Republicans would inflict serious damage on AFSCME and other public-sector unions by making it harder for them to retain members and weakening their clout at the bargaining table.
And as shown by the latest state to join the anti-union fray, it’s not just Republicans chipping away at workers’ rights anymore. In Massachusetts, a staunchly liberal state, the Democratic-led State Assembly recently voted to curb collective bargaining rights on heath-care benefits for teachers, firefighters, and a host of other public-sector employees.
Bargaining-table clout is crucial for unions, since it directly affects the wages their members take home every month. According to data from the Bureau of Labor Statistics, union workers pocket on average $200 more per week than their non-union counterparts, a 28% percent difference. The benefits of union representation are even greater for women and people of color: women in unions make 34% more than their non-unionized counterparts, and Latino workers nearly 51% more.
In other words, at precisely the moment when middle-class workers need strong bargaining rights so they can fight to preserve a living wage in a barbell economy, unions around the country face the grim prospect of losing those rights.
All of which raises the questions: Is there any way to revive the American middle class and reshape income distribution in our barbell nation? Or will this warped recovery of ours pave the way for an even more warped McEconomy, with the have-nots at one end, the have-it-alls at the other end, and increasingly less of us in between?
Andy Kroll is a reporter in the D.C. bureau of Mother Jones magazine and an associate editor at TomDispatch. The son of two teachers, he grew up in a firmly — and happily — middle-class household. His email is andykroll (at) motherjones (dot) com. To listen to Timothy MacBain’s latest TomCast audio interview in which Kroll discusses what grim news lurks under the monthly unemployment figures, click here, or download it to your iPod here.
Copyright 2011 Andy Kroll
The Underlying Divisions in the Health Care Debate December 18, 2009Posted by rogerhollander in Barack Obama, Democracy, Health, Political Commentary.
Tags: bailout, capitalsim, change, corporatism, democratic party, democrats, glenn greenwald, health, health care debate, health care reform, health insurance, healthcare, insurance industry, left, Lobbyists, obama administration, private contractors, private sector, progressive, revolution, right wing, roger hollander, Wall Street, working class
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There are many reasons for the progressive division on the health care bill. There are differences over the narrow question of health care policy, with some believing the bill does more harm than good just on that ground alone. Some of it has to do with broader questions of political power: if progressives always announce that they are willing to accept whatever miniscule benefits are tossed at them (on the ground that it’s better than nothing) and unfailingly support Democratic initiatives (on the ground that the GOP is worse), then they will (and should) always be ignored when it comes time to negotiate; nobody takes seriously the demands of those who announce they’ll go along with whatever the final outcome is. But the most significant underlying division identified by Kilgore is the divergent views over the rapidly growing corporatism that defines our political system.
Kilgore doesn’t call it “corporatism” — the virtually complete dominance of government by large corporations, even a merger between the two — but that’s what he’s talking about. He puts it in slightly more palatable terms:
To put it simply, and perhaps over-simply, on a variety of fronts (most notably financial restructuring and health care reform, but arguably on climate change as well), the Obama administration has chosen the strategy of deploying regulated and subsidized private sector entities to achieve progressive policy results. This approach was a hallmark of the so-called Clintonian, “New Democrat” movement, and the broader international movement sometimes referred to as “the Third Way,” which often defended the use of private means for public ends.
As I’ve written for quite some time, I’ve honestly never understood how anyone could think that Obama was going to bring about some sort of “new” political approach or governing method when, as Kilgore notes, what he practices — politically and substantively — is the Third Way, DLC, triangulating corporatism of the Clinton era, just re-packaged with some sleeker and more updated marketing. At its core, it seeks to use government power not to regulate, but to benefit and even merge with, large corporate interests, both for political power (those corporate interests, in return, then fund the Party and its campaigns) and for policy ends. It’s devoted to empowering large corporations, letting them always get what they want from government, and extracting, at best, some very modest concessions in return. This is the same point Taibbi made about the Democratic Party in the context of economic policy:
The significance of all of these appointments isn’t that the Wall Street types are now in a position to provide direct favors to their former employers. It’s that, with one or two exceptions, they collectively offer a microcosm of what the Democratic Party has come to stand for in the 21st century. Virtually all of the Rubinites brought in to manage the economy under Obama share the same fundamental political philosophy carefully articulated for years by the Hamilton Project: Expand the safety net to protect the poor, but let Wall Street do whatever it wants.
One finds this in far more than just economic policy, and it’s about more than just letting corporations do what they want. It’s about affirmatively harnessing government power in order to benefit and strengthen those corporate interests and even merging government and the private sector. In the intelligence and surveillance realms, for instance, the line between government agencies and private corporations barely exists. Military policy is carried out almost as much by private contractors as by our state’s armed forces. Corporate executives and lobbyists can shuffle between the public and private sectors so seamlessly because the divisions have been so eroded. Our laws are written not by elected representatives but, literally, by the largest and richest corporations. At the level of the most concentrated power, large corporate interests and government actions are basically inseparable.
The health care bill is one of the most flagrant advancements of this corporatism yet, as it bizarrely forces millions of people to buy extremely inadequate products from the private health insurance industry — regardless of whether they want it or, worse, whether they can afford it (even with some subsidies). In other words, it uses the power of government, the force of law, to give the greatest gift imaginable to this industry — tens of millions of coerced customers, many of whom will be truly burdened by having to turn their money over to these corporations — and is thus a truly extreme advancement of this corporatist model. It’s undeniably true that the bill will also do some genuine good, as it will help many people who can’t get coverage now to get it (though it will also severely burden many people with compelled, uncontrolled premiums and will potentially weaken coverage for millions as well). If one judges the bill purely from the narrow perspective of coverage, a rational and reasonable (though by no means conclusive) case can be made in its favor. But if one finds this creeping corporatism to be a truly disturbing and nefarious trend, then the bill will seem far less benign.
As I’ve noted before, this growing opposition to corporatism — to the virtually absolute domination of our political process by large corporations — is one of the many issues that transcend the trite left/right drama endlessly used as a distraction. The anger among both the left and right towards the bank bailout, and towards lobbyist influence in general, illustrates that. Kilgore says that anger among the left and right over corporatism is irreconcilable, and this is the point I think he has mostly wrong:
To put it more bluntly, on a widening range of issues, Obama’s critics to the right say he’s engineering a government takeover of the private sector, while his critics to the left accuse him of promoting a corporate takeover of the public sector. They can’t both be right, of course, and these critics would take the country in completely different directions if given a chance. But the tactical convergence is there if they choose to pursue it.
This supposedly irreconcilable difference Kilgore identifies is more semantics than substance. It’s certainly true that health care opponents on the left want more a expansive plan while opponents on the right want the opposite. But the objections over the mandate are largely identical — it’s a coerced gift to the private health insurance industry that underwrites the Democratic Party. The same was true over opposition to the bailout, objections to lobbying influence over Washington, and most of all, the growing anger that Washington serves the interests of financial elites at the expense of the working class.
Whether you call it “a government takeover of the private sector” or a “private sector takeover of government,” it’s the same thing: a merger of government power and corporate interests which benefits both of the merged entities (the party in power and the corporations) at everyone else’s expense. Growing anger over that is rooted far more in an insider/outsider dichotomy over who controls Washington than it is in the standard conservative/liberal ideological splits from the 1990s. It’s true that the people who are angry enough to attend tea parties are being exploited and misled by GOP operatives and right-wing polemicists, but many of their grievences about how Washington is ignoring their interests are valid, and the Democratic Party has no answers for them because it’s dependent upon and supportive of that corporatist model. That’s why they turn to Glenn Beck and Rush Limbaugh; what could a Democratic Party dependent upon corporate funding and subservient to its interests possibly have to say to populist anger?
Even if one grants the arguments made by proponents of the health care bill about increased coverage, what the bill does is reinforces and bolsters a radically corrupt and flawed insurance model and and an even more corrupt and destructive model of “governing.” It is a major step forward for the corporatist model, even a new innovation in propping it up. How one weighs those benefits and costs — both in the health care debate and with regard to many of Obama’s other policies — depends largely upon how devoted one is to undermining and weakening this corporatist framework (as opposed to exploiting it for political gain and some policy aims). That’s one of the primary underlying divisions Kilgore identifies, and he’s right to call for greater examination and debate over the role it is playing.
Copyright ©2009 Salon Media Group, Inc.
Glenn Greenwald was previously a constitutional law and civil rights litigator in New York. He is the author of the New York Times Bestselling book “How Would a Patriot Act?,” a critique of the Bush administration’s use of executive power, released in May 2006. His second book, “A Tragic Legacy“, examines the Bush legacy.
Tags: labor, labour, unions, roger hollander, working class, workers, bank of america, benjamin dangl, republic window, plant occupation, worker run cooperative, mike meinster, united electrical workers, argentina workers, venezuela workers, landless brazil, canadian auto workers, caw, latin america labor, armando robles
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Armando Robles, president of Local 1110 of the United Electrical Workers union, speaks about the action against Republic Windows and Doors. (Photo: Justin Goh / ChiTown Daily News)
www.truthout.org , January 16, 2009
Benjamin Dangl, t r u t h o u t | Interview
On December 5, 2008, over 200 recently fired workers at the Republic Window and Doors factory in Chicago occupied their plant, demanding they be paid their vacation and severance checks. The occupation ended victoriously six days later when the Bank of America and other lenders to Republic agreed to pay the workers the approximately $2 million owed to them.
But the workers didn’t stop there. They are now seeking ways to restart the factory and potentially operate it as a worker-run cooperative. The workers are also filing charges against their former employer for failing to give the workers sufficient notice of plans to shut the factory down; the workers were only given three days’ notice, and the management refused to negotiate with the workers’ union about the closure.
In this interview, Mark Meinster, the International Representative for the United Electrical Workers (UE) – the union the Republic workers belong to – talks about his role as the coordinator for the plant occupation, connections between the struggle of the Republic workers and workers’ struggles and tactics in South America, the fight to reopen the plant and what the Republic workers’ strategies say about social change in an economic downturn.
Benjamin Dangl: First, please briefly describe your role in the union, in the occupation of the Republic Windows and Doors factory, and the ongoing struggle of the Republic workers.
Mark Meinster: I’m an International Representative for the United Electrical Workers (UE). My primary responsibility is to oversee the union’s organizing work and staff in Chicago, Illinois, and Milwaukee, Wisconsin. I was the lead organizer on the effort to organize the Republic workers into UE in 2004 and led negotiations for a first contract in 2005. Since then, I and UE Field Organizer Leah Fried have worked with the local on leadership and steward training, grievance handling and contract negotiations. I coordinated the plant occupation at Republic Windows and Doors and participated in negotiations with the employer and the financial institutions involved and continue to work on efforts to reopen the plant.
BD: Could you please talk about some of the connections you see between the Republic workers’ struggle and actions and the strategies and experiences of similar workers’ groups in Argentina and Venezuela and the landless farmers in Brazil? How did you learn about these struggles and come to apply them in Chicago as a union organizer?
MM: Obviously there is a long history of workers taking actions of this type, both within the US and in other countries. Because there have been very few plant occupations in the US since the 1930s, we needed to look to workers’ struggles in other countries for recent guidance. For example, the Canadian Auto Workers, who have engaged in similar actions over the past 20 years to protest plant closings and win severance benefits, provided us with invaluable technical advice.
But in many respects, workers’ struggles in Latin America were the biggest inspiration for the Republic occupation. I had read about the land occupations carried out by the Movimento dos Trabalhadores Rurais Sem Terra in an interview with Joao Pedro Stedile in 2002. I was struck by the MST’s focus on popular education and leadership development, and especially the way they placed the occupation tactic within the context of the right to unused land enshrined in the Brazilian constitution. The occupation, although technically an illegal tactic, was used to enforce a legal right. This gives workers confidence and places the struggle on a moral plane, allowing for more significant community and political support. We drew on this concept in planning the Republic occupation.
Current UE Local 1110 President Armando Robles attended the World Social Forum in Caracas, Venezuela, in 2006. There, he heard from workers from Inveval, a “recovered” factory in Venezuela. They had inspired a movement of workers occupying and running factories, with the help of the government, that had been abandoned by bosses who had fled the country. Armando returned from that experience politicized and inspired. I visited Venezuela in 2007 and spent time visiting worker-run co-ops. I was struck by the workers’ investment in the revolutionary process and their ability to run production without management.
We drew on the Argentine factory occupations to the extent that they show that during an economic crisis, workers movements are afforded a wider array of tactical options. Militant action can win public support during a downturn in ways that would have been impossible before. In fact, the film “The Take” was screened in the factory during the occupation in a makeshift movie theater set up in the locker room.
BD: Is there a plan to transform the Republic factory into a worker-run cooperative? If so, how did the decision to do this come about? At this point, how is the process going of setting this up?
MM: At this point we are working to find a buyer for the factory, focusing on firms specializing in energy-efficient windows. Though, we are also exploring the idea of a cooperative enterprise; the fact that no real movement of worker-run enterprises exists in the US makes this option much more difficult at this point. The workers have set up an entity called the “Windows of Opportunity Fund,” to help provide technical assistance and study this and other possibilities for restarting production.
BD: Could you comment on the role the Republic workers’ struggle in inspiring workers across the US to take up similar tactics to confront unemployment and problems related to the current US economic downturn?
MM: I think the Republic struggle shows we can win support for bold tactics, especially when we think carefully about how we project the struggle to the public. Time will tell whether the Republic struggle will be viewed as a bell-weather event or a flash in the pan. On the one hand, the occupation led to a huge outpouring of support – from solidarity rallies all across the country to donations of money, food and essential supplies. That this support was on a scale unthinkable only a year ago is proof that this action spoke to the desire of working-class people to seek ways to resist the current economic onslaught. On the other hand, for this event to be a spark, others will have to pick up the baton. That means organized labor will have to take some measure of risk, embracing militant tactics when necessary and abandoning its reliance on political maneuvering as the primary means for the advancement of a working class agenda.
Benjamin Dangl is the author of “The Price of Fire: Resource Wars and Social Movements in Bolivia” (AK Press). He is the editor of TowardFreedom.com, a progressive perspective on world events, and UpsideDownWorld.org, a web site on activism and politics in Latin America.