roger hollander

The Belly Button Theory of Economics August 26, 2008

The Belly Button Theory of Economics

(This was submitted to and rejected by the “Los Angeles Times.”  Arguing that they could not compete with the low wages and health benefits given to its employees by Wal-Mart, three major supermarket chains in Southern California locked out their workers, who refused to accept the cutbacks.  I have to admit that I thought my metaphor was pretty clever and catchy, but it obviously failed to convince the “Times” oped editor.)

Call it the belly button theory of economics, if you will.  Every one knows there are two types of umbilicals: innies and outies.  Well, when all is said and done, all complexities aside, doesn’t one’s economy simply break down into what comes IN and what goes OUT?

Let’s talk about the ordinary working person.  She earns from her job (IN), and she meets her needs and pleasures by making purchases (OUT).  The well-being of her “economy” depends upon there being at least enough IN to take care of all the OUT.

One might be tempted to say that both are equally important, that is income (IN) and the cost of things (OUT).  Here is where I would argue that many economists miss the boat.  I believe that what one does through her work to acquire the means to live (IN) is fundamental, whereas the cost of things (OUT), while important, is secondary.  Think of is this way.  If you are unemployed you sure appreciate a good bargain, but what you really need is a good job.

There can also be a “dialectic” relationship between IN and OUT.  Take health care.  It is something we purchase (an OUT).  However, for millions of Americans, their health care comes as a benefit attached to their work (an IN).  In other words, health insurance as a benefit is an IN that offsets the cost of health care, an OUT.

That is why I believe it is so important for all working people that in the current labor dispute that grocery giants — Safeway, Vons, Ralph’s and Albertsons — do not succeed in their efforts to cut drastically the wages (IN) and health benefits (IN) of their workers.  They argue that this is necessary in order to compete with the Wal-Mart super stores, who pay their workers substantially less in wages and benefits (cf. Nickel and Dimed, Barbara Ehreneich’s classic study where she tried over a large period of time and failed to be able to live on Wal-Mart wages).  Wal-Mart does this by keeping its prices (OUT) lower than anyone else.  Interestingly, and here is that dialectic at work again, Wal-Mart is able to offer such low prices (OUT) by pressuring its suppliers to cut labor costs (their workers’ IN) in order to provide Wal-Mart with its goods at cut rate prices.

In the end, you see, it always boils down to IN(come).  Of course, the worker is also a consumer and naturally loves low prices.  We all appreciate a bargain, and who can blame us?  But if the price of bargains is that, in the long run, we don’t have a living wage (IN) that meets our needs to provide for our expenses (OUT), then the bargain is, in effect, no bargain.  It is a cruel trick disguised as a bonus.

Human beings are by nature, first and foremost, producing animals.  We produce the means by which we survive and thrive.  Only then are we able to “consume.”  I am no great fan of capitalism because it treats human labor as a commodity, just one more expense for the capitalist along with things such as materials, rents and other overhead costs.  But as long as capitalism exists, working people have no choice but to demand wages and benefits that meet their fundamental needs.  Health care, along with food and shelter, is one of the most basic of human needs.  Because the United States government, the only one in the world of industrial nations (with the possible exception of South Africa), has not seen fit to provide universal health coverage for its people, then this need for most of its working people gets fulfilled through employer health care plans.  It is not an “extra.”

I have spoken with shoppers crossing the picket lines at the supermarkets, fellow working people, who justify their non-support of the grocery workers on the basis that they too must pay part of their health care costs (“If I can’t have it, you can’t have it either”).  This sad lack of worker solidarity is a product of the divide and conquer strategy of the supermarket chains, and it is in contrast to the solidarity the chains themselves have shown by sharing their profits amongst themselves, possibly in violation of anti-trust legislation.  How ironic that the supermarket industry is turning around that famous dictum to read: “chains of the world unite, you have nothing to lose but your workers!”

Think of this the next time you are tempted to support them by shopping in one of the on-strike or locked out supermarket chains.