Open season on workers

By Max J. Castro

Workers in the United States — indeed in most of the world — are the objects of a major new assault on their rights, their standard of living, and their security.

It’s not as if blue-collar workers, service workers, and public sector employees in this country have been living high off the hog for all these years. The contrary is the case.

Employment in manufacturing has been declining for at least a generation. The wages of manual workers both skilled and unskilled have declined substantially over the same period of time.

It is no coincidence that the share of capital in the U.S. Gross Domestic Product has increased substantially and that of labor has decreased significantly during the same period of time that the percentage of private sector workers who belong to unions has dropped to an abysmal level.

The ongoing process of globalization has exacerbated the bargaining power of employees — caused by the shrinking of the unionized labor force. The relocation of production to cheap labor markets has eliminated many well paying jobs, especially in manufacturing but increasingly in other sectors as well. These range from relatively low paying jobs in call centers to highly remunerated ones in medical and other professional services. The mere threat of relocation, which like the sword of Damocles perennially hangs above the heads of millions of American workers, dissuades them from pressing employers to share the fruits of increasing productivity.

The result is that, while the productivity of U.S. workers has increased very significantly in recent decades, the salaries, wages, and benefits accruing to employees have not. Indeed, for substantial sectors of the labor force, pay and benefits actually have decreased. This is one of the major causes for the appalling level of economic inequality that exists in this country today.

The reason for flat or declining wages is evident. What the late, celebrated economist John Kenneth Galbraith used to call a “countervailing force,” in this case the unions, has become so enfeebled as to be unable to demand from employers a fair share for the workers of the prosperity that has been created through and by their labor. And, in the absence of such a countervailing force, including the state, which in recent decades has sided with capital over labor most of the time, there has been nothing to prevent employers from taking the lion’s share, and more, of the spoils of economic growth. In other words, they did because they could.

The public sphere had been, until recently, the only sector spared the squeeze against the vast majority of the population, who must make ends meet on salaries, wages, private pensions, and social security. This to the benefit of the miniscule minority who can afford lavish luxuries from unearned income derived from inheritances, stocks, bonds, and rents. Although all of the rigorous studies have found that public sector workers make about 5 percent less than their private sector counterparts, controlling for education, experience, responsibilities, career stage, and other relevant criteria (just consider the number of members of Congress who retire to make more money in the private sector and the myriad Cabinet Secretaries who say they must make major economic sacrifices if they want to work for the government), public sector employment has several advantages.

The U.S. public sector does not have to compete with the public sector of China, Japan, or the European Union. Unlike manufacturing, jobs in the local, state, and federal governments have been growing as has the rate of unionization. And, in contrast to many private sector jobs, most government jobs are difficult, or impossible, to export. Finally, public sector bosses, unlike corporate CEOs, are under less pressure and have few if any incentives to carry out brutal “downsizing” campaigns or to extract the last ounce of profit from the work of their subordinates.

As a result, while public servants make less money, they have more security, both on the job and when it comes to retirement. While in most states a private employer can fire an employee “at will” — for any reason at all or for no reason except for a discriminatory reason based on race, religion, gender, etc. — most public sector employees can only be dismissed for sufficient cause or laid off for budgetary reasons. Moreover, while in the private sector a high percentage of employers used to pay for “defined benefit” pension plans for their employees, the same mad race for maximum short-term profits that led to “downsizing” and the war against unions — and that fueled the speculative bubble that led to the 2008 financial collapse and the resulting (and ongoing, despite official pronouncements to the contrary) Great Recession — has led to a drastic reduction in employer contributions to pension plans and a shift in cost and risk onto the back of employees, amounting to a decrease in their disposable income.

On the other hand, the vast majority of public sector employees continue to enjoy an employer-funded defined benefit pension plan. This disparity, along with the real budgetary constraints caused by the financial and economic crises created by our casino capitalism centered on Wall Street and spilling over to Main Street, provides the ideal conditions and motivation for an opportunist, neophyte, radically pro-business political entrepreneur to apply the same bitter medicine to public employees that private employers have been doling out for more than 30 years.

Stereotyping and vilifying public servants as “do-nothing government bureaucrats,” the endless meddling of whom saps the dynamism of the productive and infinitely efficient “market economy,” has forever been a stock in trade of American demagogues. The declining fortunes and increasing insecurity of private sector workers — who constitute the vast majority of workers and voters — allows the demagogue to set up an invidious comparison so as to divide labor and pit private sector workers against public employees. The beneficiaries are corporations and the wealthy, who have done fabulously in recent years and are now sitting on trillions of dollars in idle cash, from paying even a minute proportion of their fair share of the cost of balancing federal, state, and local budgets.

So when one of these characters, such as Florida Governor Rick Scott, who epitomizes the species just described above, says he wants to govern like a CEO and run the state like a business, believe him. He is not just blowing smoke. He is talking about something very real: waging and winning, by hook or by crook as he did in the private sector, the last battle in the top-down class war that has been going on for decades. Crushing the unions, lowering the standard of living of state workers, undermining their security, defunding the one force (the Democratic Party) that, however weakly, stands in the way of a monolithic corporate-dominated society, that is what this is all about.

The handwriting is on the wall — and in the news. In a relatively liberal and pro-union state like Wisconsin, the valiant crowds who in Madison, for weeks, defied the cold and the odds to beat back the Republican offensive against public employees and their unions, could not stem the tide. The GOP legislature and governor used a procedural maneuver to pass a law that renders workers powerless.

In Florida, a more conservative and anti-union state, one day’s headlines are sufficient to tell the tale: “Florida Republicans join march to target unions” (Miami Herald, March 11); “Teacher overhaul moves forward” (Miami Herald, March 11).

Florida’s governor is a corporate wizard that thinks business — of the sharp, hard-edged variety — is the answer to all problems. The wizards on Wall Street — more savvy than Rick Scott will ever be — also thought they knew it all, but they ran the financial market, and the nation’s economy, into the ground. Just in the nick of time, the Wall Street geniuses had to call in the public sector to carry out an emergency resuscitation consisting of trillions of dollars from the taxes paid by the average Joe, who for a long time has been getting the shaft from the corporations.

The question now is, if our Florida-style business magician runs the state into the ground while administering it like a business, who would be willing to bail out this devious and wacky character — and the citizens of our state?