Class War in America: the Book

Economic absurdities that
Democrats must expose:


...because it's wrong to penalize success and hard work.


...therefore, we should eliminate the capital gains tax.


...After all, they came from, and understand, business.


...even though it is based on pitting the worlds' workers against each other.


...union bosses are only out for themselves.


...and the more the rich have, the more will trickle down to everyone else.


...Democrats are communists, or at least, socialists at heart.


...so when we tax wealthy investors, we lose jobs.


...so investors, not workers, create wealth.


...so we should give them all the tax breaks possible.


...Democrats just want to tax and spend today.


General Issues:

...check out this 2-minute video.


...It's a mountain, and a terrible defense of globalization.


...for those of Indonesia, Mexico, China and India.


...and how not to do it again.


...and the "crisis" is just a ploy by those who want to destroy it.


...Republicans' most important propaganda technique.


...and get the media on your side




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7.

All Power to Investors;

Absolutely None for Workers

If lying is a sin, most Republicans are surely going to hell—for saying that unions are bad for workers. They deliberately distort reality when they claim that union members are worse off than nonunion because:

1. Union members have to pay their own money (dues) to the unions that represent them.

2. Union leaders are interested only in their own incomes and not in the workers’ welfare.

3. Union dues are used to support political candidates that some members may not support.

4. Workers would lose their “right to work” if they had refused to join a union in the first place.

Of course, it is true that:

1. Union members pay dues. They have to because it costs money to protect the interests of workers—to hire lawyers, gain public support, research the issues, finance a strike, etc. Whereas companies have almost unlimited resources to fight against the interests of workers—unions have virtually no financial resources to defend their interests, except for dues.

2. It’s unfortunate, but true: Some union leaders are selfish and interested only in their own welfare. But the same can be said about executives in corporations, officers in the military and clergymen in the church. Any large human organization is going to have corrupt persons in it. But still, unions are the only organizations specifically dedicated to protecting the interests of workers.

3. It’s also true that union dues are used to support specific political candidates. If workers’ interests are to be represented in Congress, even a little bit, funds must be raised to fight the conservative politicians that free-spending corporations have already bought off.

4. When all workers in a company must join a union because the majority voted for its representation, it doesn’t mean that some workers lose their “right to work.” It just means that the lackeys of management who don’t want to pay union dues—yet, by law, still receive all the benefits of a union—lose the right to destroy their coworkers’ collective bargaining power.

  

If working Americans don’t have collective power, they have no power. Because of conservative anti-labor legislation and the appointment of conservative judges to the courts, American corporations have been able to ensure that there is always a supply of hungry unemployed workers who will sabotage the efforts of those who have guts enough to unite and demand something more than a poverty wage.

The only reason working Americans experienced wage growth and improving working conditions from the late 1930s to the mid-1970s was that they had power. The increase in wages during those good years were not:

§         The result of a growing economy (which we also have had for the past 20 years of stagnating wages).

§         The result of growing productivity (again, which we also have had for the past 20 years).

§         The result of increasing work skills (workers also have been developing their skills over the past 20 years).

§         The result of low taxes on the wealthy (to the contrary, taxes on the wealthy from the 1930s and prior to 1982 were the highest in our nation’s history).

It’s only because working Americans had power between the mid-’30s and the mid-’70s, that they were able to form strong unions and, as a result, had significant clout with Congress. Through legislation, unions were able to get the 40-hour workweek, the 8-hour workday, overtime pay, medical insurance, pension benefit protection, and a host of safety protections in the workplace—for all workers, nonunion as well.

Even today, after 20 years of Republican attacks on unions—and their resulting declining power—union members still make more money than nonunion workers. According to the Bureau of Labor Statistics, in 1998 union members’ total compensation in private industry was $23.59 per hour; non-union workers was just $17.80.1  What makes these figures even more significant is that the incomes of non-union workers would be even lower than they are now if it were not for the upward pressures that unions exert on all wages.

For the real reasons financial conservatives are against unions, read the following pages. Their own words, in their most prestigious conservative financial publications, prove beyond any doubt that

§         unions protect their members from the predatory instincts of investors and corporate executives, and

§         unions cause the wages and working conditions to improve even in nonunion corporations and businesses.

Of course, conservatives deliberately hide these observations when they communicate about unions for widespread consumption. For a classic study of demagoguery, no publication quite matches the editorial pages of The Wall Street Journal when it discusses unions. Under the head “Time to End Compulsory Unionism,” the Journal opined that

The political power brandished by the union hierarchy grows directly from the federally sanctioned privilege of compelling millions of Americans to accept union “representation” they do not want, and then to pay billions of dollars into union treasuries, or be fired.2

The Journal then went on to attack the Republicans who opposed a National Right to Work Act, which would have repealed “the few lines of federal law that make compulsory unionism possible.”

Collective bargaining is the worker’s only source of power. And unions can’t bargain collectively if corporations are able to import desperate people who will underbid those who insist on making decent wages:

§         “Compulsory unionism” is actually the right of workers to unite and collectively bargain with corporations.

§         Traditionally, those who did “not want union representation” were desperate workers who were willing to take the job of another worker—one who had guts enough to stand up for his or her rights.

§         Most Republicans would love a “National Right to Work Act” because that would finish the job of destroying the unions. They would be able to pit worker-against-worker for the crumbs of employment throughout the entire U.S., and not just in the southern and western states that enacted “Right to Work” laws.

The True Conservative View of Unions

Conservatives betray what they really think about unions when they explain why wages are stagnating or working conditions are deteriorating. In reporting “Why Inflation Isn’t Sprouting in Mr. Greenspan’s Neighborhood,” Business Week noted that “Puny pay gains among union members make it hard to see how any upward push on wages will gel among workers generally.”3  

Under the head “Shaking the Blue-Collar Blues,” Fortune observed that

Even many who stayed in manufacturing lost ground when they were squeezed out of lucrative union jobs, such as those in autos and steel. Columbia’s Bloom says that in 1980 only 47% of high school graduates over 25 and 40% of dropouts held union jobs. By 1988 only 31% of graduates and 25% of dropouts were paying dues.

   As membership dwindles, union settlements no longer piled up wages at non-union shops. “The ethos that drove employers to treat workers more or less equally has weakened,” says Brookings Institution labor economist Gary Burtless. With competitive pressures growing, companies drove wages down.4

Contrary to its previous editorial, The Wall Street Journal lived up to professional journalism standards when it accurately described the deteriorating and unsafe job conditions for truck drivers, and why “Trucking Firms Find It Is a Struggle to Hire And Retain Drivers”:

What caused truck drivers’ work lives to deteriorate, trucking executives say, is cost-cutting forced by intense competition. After deregulation opened truck routes to new entrants in 1980, carriers turned to cheaper, nonunion drivers and employed no-frills trucks.5

Compare these three articles with the previous Wall Street Journal editorial:

§         Even Business Week recognized that when unions have power they can cause an “upward push on wages to gel among workers generally.” In other words, even nonunion workers benefit from unions.

§         The ultra-conservative Fortune considered union jobs to be “lucrative.”

§         Again, note that “union settlements” created upward pressures on “nonunion shops.” As unions lost their power, and became less of a threat to nonunion employers, those employers felt less pressure to pay their own workers “more or less equally.”

§         And what caused the truck drivers’ lives to “deteriorate”? Companies destroyed their unions. When workers lose their collective power—pay, working conditions, safety, you name it—it all deteriorates. If companies can save money by pitting individual workers against each other, no matter how unfair or immoral, they’ll do it. If a class of worker is getting decent pay (union drivers)—then corporations will abandon them for whoever is desperate enough to work for less (nonunion drivers).

                 

This deterioration in moral standards has been a conscious conservative strategy: Destroy workers’ power to collectively bargain—and, as Business Week explained under the head “Sweeney’s Blitz,” get at least two decades of wage stagnation and heightened inequality:

Today, though, workers may be receptive to labor’s renewed message, coming as it does after two decades of wage stagnation and heightened inequality. In the 1980s, for example, the 10-year average earnings of the bottom fifth of male wage-earners plunged by 34%. Now more than half of families say two members must work to make ends meet. And constant downsizing has chewed away at pay and job stability, even among professionals.…

   If unions do regain power, Corporate America is certain to feel the squeeze. With just a tenth of private-sector employees in unions today, most employers have had a free hand to hold down labor costs. Reunionization would force up pay and benefits, which typically are 20% higher among union members.…

   Globalization and the growth of services, too, will continue. Employers still have the upper hand in most unionization battles.6

In a rather comprehensive and succinct way, Business Week here summarized why conservatives hate unions, why conservative politicians enact anti-union legislation and appoint anti-worker judges to the courts, and what these actions have resulted in:

§         Corporations and businesses have been able to achieve two decades of wage stagnation and heightened inequality.

§         In our glorious Reagan ’80s, the 10-year average earnings of the bottom fifth of male wage-earners plunged by 34%.

§         More than half of families say that two members must work to make ends meet.

§         Constant downsizing chewed away at pay and job stability, even among professionals.

§         A flat-out admission: Corporate America was able to achieve these feats by, among other things, taking away union power—they’ve had a “free hand to hold down labor costs.”

§         Another F.O.A. (flat-out admission): If workers could unionize, it would force up pay and benefits, which typically are 20% higher among union members.

How clear can it be? The future of workers’ pay, benefits and working conditions depends upon who controls our government: Anti-worker Republicans and conservative Democrats, or liberal Democrats and independent Populists. As usual, it’s all about money and power, and right now Republicans and conservative Democrats have almost all of it.

Those who fail to appreciate the degenerating effects of anti-unionism should look at the new conservative model for capitalism as described by The Wall Street Journal under the head “Threat of Cheap Labor Abroad Complicates Decisions to Unionize”:

  

“You all knew what the job paid when you applied for it,” Edward Hakim, president and co-owner of Monroe Manufacturing Corp., reminds about 200 workers—almost all earning around the minimum wage of $4.25 an hour—gathered on the plant floor. “There are no chains on your legs. You can go. Go ahead.”

   Silence. Some look down. One woman, sitting at her machine, gnaws nervously on her knuckle. No one budges. “Listen,” Mr. Hakim continues, “if I can’t compete in America with American workers, I’ll take your jobs overseas where we can be competitive!”7

The Journal went on to report that Monroe Corporation was able to gain market share by underpricing its competitors, who were mostly unionized and offered workers health plans, pensions, and unbelievably high wages of $7 to $9 an hour. In addition, Mr. Hakim told his workers that if they ever struck they would be permanently replaced, that the union was racist (the work force is predominantly black) and that his company was bankrupt.

But in an interview, Mr. Hakim said that Monroe was “strongly profitable, virtually debt-free,” and that millions spent on new machines in the past two years “came straight out of profits.”

When Republicans and conservative Democrats create conditions where workers cannot unionize—or if they are unionized and have no power:

§         Workers must “agree” to whatever pay and working conditions our modern barbarians offer.

§         The recurrent threat, and the theme of the last two decades: “I’ll take your jobs overseas where we can be competitive!” Of course, “competitive” means that workers must compete (by sacrificing their incomes)—so that business owners and corporations can have outrageous profits.

§         The conservative principle: Enable the barbarians to destroy work standards and pay levels, and thus lower costs for everyone. His “lower costs” force moral competitors to do the same or they lose market share and, eventually, go out of business. Result: Conditions and pay for all workers deteriorate.

§         There are no moral restrictions on employers when they resist the efforts of workers to bargain collectively. Employers can threaten them with the loss of their jobs (“permanently replaced”), they can lie about the union being racist, and they can lie about their own financial condition.

§         And the owner’s increasing millions that came “straight out of profits” are irrelevant to workers’ low pay and deplorable working conditions.

Lack of union power always results in lower wages and worse conditions for working Americans. Another Journal article, under the head “With Housing Strong, Builders Often Find Skilled Help Lacking,” reported that

But during the 1970s and 1980s, those traditions [well-paid construction jobs] began eroding as major corporations and other customers, in a quest for lower building costs, awarded more jobs to non-union contractors.

   As unions’ market share dwindled, cutthroat competition among such firms drove down wages. In some regions, especially the right-to-work Southwest, construction wages fell even further for experienced workers, into the $12-to-$15-an-hour range with no benefits.

   By last year, even the Associated Builders and Contractors, whose members are primarily nonunion, was sounding the alarm. In one newsletter, Mr. Bennett, the trade group executive, wrote that many construction workers could no longer afford homes or health insurance.… “When you squash down, year after year, on wages, you don’t attract a good person into the industry,” he observes.8

Although the subject here was union versus nonunion, remember the issue that is always in the background: The workers who lost jobs in manufacturing immediately become competitors for construction jobs, especially the nonunion jobs. Conservatives are pitting worker against worker from many directions. It’s automatic:

§         As unions’ market share dwindles, cutthroat competition becomes the norm and the downward spiral of wages is assured. Workers at nonunion companies see that union sympathizers are fired with impunity, and there are plenty of workers who are desperate enough to work without a union contract.

§         This excerpt is a classic illustration of why Republicans love “right to work” laws. Wherever unions are weak, employers have virtually all of the power. Even experienced workers must compete with each other for the constantly lowering levels of pay and benefits, or no benefits.

§         Conservatives sometimes go too far. In this case, even nonunion construction workers began to lose their enthusiasm for work when the pay was so low that they could “no longer afford homes or health insurance.”

§         What an admission: The people who loudly proclaim that unions are bad for workers are the same ones who cynically “squash down, year after year, on wages” when they know workers are defenseless.

Under the head “Inequality,” England’s prestigious conservative financial publication, The Economist, gave its analysis of why the rich got richer, and the poor got poorer in the ’80s:

All countries have been buffeted by the forces of changing technology and stronger global competition. So why should wage differentials in most of continental Europe have changed by much less?

   The answer is that deregulation in America and Britain has allowed market forces to do their work, whereas in continental Europe powerful trade unions, centralized wage bargaining and high minimum wages have propped up the wages of the low-paid.

   Indeed, pay differentials narrowed through the 1980s in western Germany, where trade-union membership has held steady at around 40% of workers over the past 20 years; in America, membership has fallen from 30% to 12% since 1970. A study by Richard Freeman of Harvard University confirms that, in general, wage inequalities are smallest in highly unionised countries.9

Again, a conservative publication tells us that global “free trade” and weakened unions are major reasons for the income and wealth disparity between the rich and everyone else. A “lightly regulated labour market” means that the government has given corporations the freedom to ruthlessly control wages and working conditions.

Republicans have convinced working Americans that the biggest reason they are losing the race with inflation is that the government is taxing them too much. It’s true that conservatives have shifted the tax burdens from the rich to middle- and low-income Americans.

But, as The Economist points out:

§         The major reason for the wealth disparity between rich and poor is “wage differential.” Not surprisingly—and despite Republicans blaming the financial problems of the poor- and middle-class on taxes—income is the primary determinant of financial health.

§         “Market forces doing their work” in America and Britain means that conservative politicians passed laws that gave corporations the power to relentlessly control those forces.

§         The governments in continental Europe, on the other hand, allowed workers to organize (“powerful trade unions”), to bargain collectively (“centralized wage bargaining”), and to insist on “high minimum wages” for workers.

§         Want more proof that unions help minimize income and wealth disparity? The Economist gives it, via Harvard University: “Wage inequalities are smallest in highly unionised countries.”

Today’s Union Members

Look at who’s organizing today. Under the head “Joe Hill Takes On Joe College,” Business Week noted that college professors and students are “feeling squeezed” and are turning to unions:

And as old definitions of teacher and student change, profs and grad students alike are turning to unions for help in keeping up salaries and benefits and negotiating job security. About 40% of all faculty are organized today, up from about a third in 1982, making higher education a key growth area for white-collar union organizing.…

   So far, most of the activity has occurred at public universities, where state laws make unionization easier. Now, the trend could spread to private universities as well—at least among graduate students (federal law largely prevents unionization by professors at private universities).10

The Wall Street Journal also cited a traditionally conservative group that experienced a surprising change of heart in its attitudes toward unions. Under the head “Doctors’ Union Interests Become a Spreading Syndrome,” the Journal described how some of the most powerful professionals in the country suddenly found collective power to be necessary:

About 2,100 doctors, part of doctor-owned MDNY Healthcare Inc. on New York’s Long Island, affiliate with the Office and professional Employees International Union, which already represents 8,000 podiatrists in Northeastern states.

   “There’s no doubt that physicians’ interests in unions are rising across the country,” says Dr. William Mahood, a trustee of the American Medical Association.11

         

The new conservative values of corporations—greed and materialism, to the exclusion of virtually all other values—have only one antidote: employee collective bargaining power:

§         In universities, the administrators, athletic coaches, and funded “stars” get unending raises in their incomes. On the other hand, those who do the intended work of the university, professors and grad students, must turn to unions to protect their “salaries and benefits and job security.”

§         Whether or not anyone can organize depends upon the laws in effect. Right-to-work laws and the “federal laws governing private universities” are conservative tools to destroy collective bargaining rights, and to give all the power to investors and their administrators.

§         Doctors—traditionally a very conservative group—are beginning to see how the philosophy of greed and materialism will impact their professional standards. At this point, doctors’ concerns appear to be less about wages than about doing the work of their profession. They are finding out that when cost cutting becomes the dominant criterion of managers and their investors, profit becomes more important than the original purpose of the organization.

In both cases—professors and doctors—the ones who are committed to doing the intended work of the organization are the ones who must make all the sacrifices. Those who profit most are those with the power: administrators, bosses, and investors.

America’s Third-World Values

It’s a shame what has happened to our country. The U.S., traditionally a leader in the moral treatment of workers, is now the world leader of greed and materialism. The Wall Street Journal inadvertently highlighted what is happening as the United States sells-out its workers. Under the head “In Employment Policy, America and Europe Make a Sharp Contrast,” it explained that “U.S. spawns jobs, but often ill-paid; Germany offers high pay, few openings”:

Although there are poorly paid workers everywhere, only the U.S. tolerates having millions of its people accurately classified as “the working poor.” On the other hand, chronic unemployment is an enormous problem in Europe but less of one in the U.S.

   Thus, in confronting a common problem—waning demand for low-skilled workers—the U.S. and Continental Europe have responded in very different ways.

   The U.S. creates lots of jobs. But by weakening unions and failing to adjust the minimum wage for inflation, it has allowed the wages of those at the bottom to fall. The result is companies that are more globally competitive, but also a widening gap between rich and poor and an uncomfortably large number of workers living in or near poverty.12

Continental Europe is now the defender of the values of fairness and justice for workers, and the United States has become one of its major anti-worker antagonists:

§         The Journal subhead, “Spawns jobs, but often ill-paid; Germany offers high pay, few openings,” indicates that Germany and Continental Europe are losing the “jobs war.” Does that mean that the U.S. is doing it right?

§         No, the opposite is true: The United States is the one that sold out its workers. The U.S.—along with such morally principled countries as Indonesia, Guatemala, Mexico, China, Haiti, and other Third World countries—undercut the moral positions of the governments of Germany and Continental Europe in order to rob them of their exportable jobs.

§         It’s the same old story: Immoral businesspersons—or countries—will drive moral persons, or countries, out of the job market. When greed and materialism are the only criteria, anything goes. Those who most brutalize workers get the jobs.

§         The Journals observation that “By weakening unions and failing to adjust the minimum wage for inflation, (the U.S.) has allowed the wages of those at the bottom to fall”—isn’t the half of it. Republicans and conservative Democrat politicians deliberately caused wages to fall! And destroying unions was a significant part of their strategy.

Although President Clinton has, by and large, betrayed his populist supporters, in some cases “The White House” has attempted to defend the rights of working Americans against the Republican onslaught. It proposed new rules that would allow the government to reject contract bids from companies with unsatisfactory employment practices, and would bar the government from reimbursing contractors for the costs of fighting off union organizing drives. The Wall Street Journal reported that the “White House Plans Rules for Firms To Protect Unions”:

In a nod to organized labor, the Clinton administration will issue new guidelines requiring companies doing business with the government to maintain good relations with their workers and the unions that represent them.…

  At the U.S. Chamber of Commerce, Jeffrey H. Joseph, vice president for domestic policy, said the new rules almost certainly would raise the ire of congressional Republicans. “Obviously, the Congress is not going to stand still for this kind of stuff,” he said. “It’s just like trying to hang out a red flag in front of a bull.”13

Working Americans should read The Wall Street Journal every day. It’s a textbook illustration of conservative propaganda techniques, and it clearly describes which politicians actually fight for their rights. According to the Journal:

§         Protecting workers is never “protecting workers,” it is a “nod to organized labor.” This automatically leads the reader to react emotionally to union “bosses,” dues, and all the other phony distractions that have been created by the Republican right wing.

§         Do congressional Republicans believe that companies should be able to have an unsatisfactory record of employment practices—and still get government contracts? Of course they do. Because then, unscrupulous businesses, by ruthlessly cutting labor costs, will either get all the government contracts, or they will drive down wages generally. Either way, our richest citizens will save on taxes and wages—and the only persons to suffer will be the workers.

§         The Journal and the Republicans not only want to allow unscrupulous businesses to get government contracts, they want to have the government finance their fights with the unions!

One would think that the massive leverage corporations now have over unions would allow them to relax a bit their hell-bent single-minded urge to totally destroy them. Sadly, not so. In a commentary for Business Week, Aaron Bernstein updated the 1999 conditions for union certification, and explained why “unions only win half the elections held at private companies, but are voted in 85% of the time by public-sector employees”:

What is the probable cause? The increasing use of antiunion tactics by private employers. According to analyses of data from the National Labor Relations Board (NLRB) by labor researcher Kate Bronfenbrenner of Cornell University, companies are increasingly using every weapon—legal or not—to thwart attempts to organize their workers.

   A third of the companies in the NLRB study illegally fired union supporters during elections, Bronfenbrenner found. That was up from a mere 8% in the 1960s. Half threatened to close facilities if the union won…14

American corporations have found—after over 20 years of conservative legislation and the appointments of conservative judges to the courts—that present pro-labor laws have no teeth, and the courts are decidedly biased in favor of business. The penalties for firing union sympathizers are incidental and quite affordable, and the new free trade laws allow them to threaten workers with impunity.

Even with their severely reduced power, unions are still feared by America’s conservatives—and their publicly stated fears prove the positive effects that unions still have on workers’ lives. In September, 1999, Barron’s was still warning its readers about how unions might increase wages:

Then there are the recent rumblings on the organized labor front. After years of defeat and paltry wage gains, some unions are winning hefty pay increases, raising the specter that our historically tight employment markets may finally cause wage inflation.

   In one marquee-caliber victory, machinists at Boeing won a 10% bonus and annual salary increases of 4% for two years and 3% in the third year. In another, Northwest Airlines offered flight attendants pay raises averaging 25% over five years and an average 80% boost in pension benefits.15

The articles quoted in this chapter represent a tiny fraction of hundreds of similar articles that explain why the Fed doesn’t have to raise the prime interest rate to keep wages from going up. In almost every case, the weakening of unions is listed as a major cause of wage stagnation and the deterioration of worker protections—and the record corporate profits—for the past 20 years.

While conservatives delight in their victory over American workers, they are often remarkably frank in admitting the unfairness of it all—“years of paltry wage gains.” They chalk it up to the nature of free markets, totally ignoring the fact that they strictly control those markets. 

Despite the fact that conservatives and their corporations have gained overwhelming power over unions, our “family values” Republicans in Congress continue to attempt to further weaken the power of workers to collectively bargain for fairer pay and more humane working conditions.

Now it’s time to look at the results of the conservative attacks on working Americans that were described in this and the previous six chapters: the victimization of American workers.


      

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