The following article was the basis of remarks by Ann Robertson at a public forum devoted to addressing the significance of the recent assaults on labor unions. The forum took place in Seaside, California, on April 14, 2011.
The Big Picture
I want to begin by clarifying the larger context within which all of the recent attacks on labor unions have taken place, because by having a clear view of the big picture, we can grasp far more clearly the significance of these recent events, how they are interconnected, why they have occurred, and what we need to do to effectively defend the labor movement.
The big picture is rather shocking, and more and more people are becoming aware of it. There are four parts to it and I want to give you a few statistics regarding the first part.
1. According to Robert Reich, former Clinton secretary of labor, corporate CEOs in the 1970s took home 40 times the compensation of average workers. They now take home 350 times as much.
According to Nobel prize-winning economist, Joseph Stiglitz, the wealthiest 1 percent of Americans takes in nearly 25 percent of all income, which is more than twice the amount they took in 25 years ago. He adds that those in the middle actually take in less income today than they did 25 years ago.
And the San Francisco Chronicle reported that between 1978 and 2008, the incomes of the wealthiest 1 percent of Californians grew by 81 percent while the incomes of the poorest 20 percent dropped by 11.5 percent.
All of this is to say that there has been an “almost unprecedented buildup of income, wealth and power at the top,” as Robert Reich noted.
2. But the second element of this larger context, as this quote from Reich indicates, is that there is not simply a growing concentration of wealth at the top, but a growing concentration of power, which has resulted from two factors:
(a) Labor unions have become weaker because their membership has plummeted. Now only about 12 percent of the workforce is unionized.
(b) Money translates into power that can then be converted back into money. Those with money use it to lobby politicians or make generous campaign contributions in order to win favorable legislation. Stiglitz puts it this way: “Wealth begets power, which begets more wealth. Virtually all U.S. senators, and most of the representatives in the House, are members of the top 1 percent when they arrive, are kept in office by money from the top 1 percent, and know that if they serve the top 1 percent well they will be rewarded by the top 1 percent when they leave officex.. It should not make jaws drop that a tax bill cannot emerge from Congress unless big tax cuts are put in place for the wealthy.” As U.S. Senator Dick Durben said of banks in relation to Congress a few years ago: “And the banksxthey frankly own the place.” (See the Huffington Post, April 29, 2009)
Just to clarify Stiglitz’s point, he is talking about both Republicans and Democrats. The Democrats are just as much tied to big corporate and Wall Street money as the Republicans.
Consequently, we have seen the rich enjoy a never-ending cascade of tax breaks during the past three decades. Obama extended the Bush tax cuts for the rich. Twitter just got a special tax break in San Francisco. One year ago, the California State legislature, while ruthlessly slashing vital social programs and public education, bestowed an additional $1 billion in tax breaks on corporations. Andrew Cuomo, governor of New York, vigorously campaigned to let higher taxes on the rich expire while simultaneously slashing social programs and education. The California State Democratic Party has adopted a platform that embraces the goal of raising taxes on everyone but the wealthiest 1 percent. Jerry Brown has been seeking a special election to extend tax increases around higher vehicle fees, a higher sales tax, and a higher personal income tax. All these taxes are regressive, meaning they constitute a heavier burden on the poor than on the rich. In the 1950s the rich were taxed at a rate of 90 percent on the federal level. Today they are theoretically taxed at a rate of 35 percent. But in reality their taxes are much lower. The rich make most of their income from capital gains, but the tax rate for capital gains is set at a rate of about 16 percent. Consequently, as Warren Buffet has pointed out, he is taxed at a lower rate than his secretary.
So a concentration of money at the top has resulted in a concentration of power, which then results in more money, and so on.
As an aside, inequality in wealth, then, is no trivial matter. It’s like a cancer that destroys the social fabric of society, corrupting everything it comes in contact with. It undermines democracy since the rich can buy politicians while the rest of us cannot. It undermines a sense of common identity. As Stiglitz argued, “The more divided a society becomes in terms of wealth, the more reluctant the wealthy become to spend money on common needs. The rich don’t need to rely on government for parks or education or medical care or personal security – they can buy all these things for themselves.” And wealth inequality undermines the economy. Seventy percent of our economy is dependent on consumption. When all the wealth is concentrated at the top, most of us are not in a position to make anything but the most necessary purchases. Therefore, although corporations are sitting on record profits, they are not hiring because they know that the demand for their products is stagnant.
3. But when the rich enjoy increasingly lower taxes, that means that state and federal revenues also decline, which in turn means rising state and federal budget deficits. And this is the immediate context in which events have been crashing down on the labor movement. Government officials point to the deficits and disingenuously proclaim that they have no choice but to cut social services and public education and demand that public workers make concessions. This has taken place across the country, resulting in working people collectively giving up billions of dollars in concessions.
Of course, the other choice, which is blatantly obvious but studiously ignored by politicians for reasons already mentioned, is to raise taxes on the rich. As Robert Reich has noted: “The truth is, if the superrich paid their fair share of taxes, government wouldn’t be broke. If Wisconsin Gov. Scott Walker hadn’t handed out tax breaks to corporations and the well off, Wisconsin wouldn’t be in a budget crisis.”
4. There is one final element in this big picture: the role of the Democratic Party in defending the interests of the rich. We have already seen a number of examples of how the Democrats are helping the rich continually lower their taxes.
But there is one more crucial example involving the Employee Free Choice Act (EFCA) that was reported by The New York Times in March 11, 2009: “Republican and business strategists said some former co-sponsors [i.e. Democrats] felt they had a free pass to back the bill when President Bush appeared likely to veto it. But now that the bill appears to have a real chance of passage, they said, some moderate senators, heavily lobbied by business, are backing off the bill, worried that it might hurt or anger their business constituents.”
In other words, the Democrats could have easily passed EFCA when Obama initially took office, because, in addition to the presidency, they had a large majority in the House and a super majority in the Senate. They could have done anything they wanted. They chose to serve the interests of those who give them the most money. It’s all about money.
The only effective way to mount a defense of public workers in the face of huge budget deficits, is to point out that the rich have an overabundance of wealth and their taxes are absurdly low. But the Democrats are not promoting this narrative. Robert Reich put it this way: “You can’t fight something with nothing. But as long as Democrats refuse to talk about the almost unprecedented buildup of incomes, wealth and power at the top – and the refusal of the superrich to pay their fair share of the nation’s bills – Republicans will convince people it’s all about government and unions.”
Now that we have the larger context in view, it becomes much easier to understand the logic behind the unfolding of events in Wisconsin. Because of their corporate ties, there has been no campaign by Wisconsin Democrats to raise taxes on the rich. In fact they have been complicit in the Republican initiative to lower those taxes. Not surprisingly, the Democrats spoke approvingly of the fact that many labor union officials immediately signaled a willingness to accept concessions for their members. Of course, when working people make concessions, these concessions then add to the growing inequalities in wealth, which take us one more step in the wrong direction.
The only union right that the Democrats have vigorously defended is the right of unions to bargain for contracts and keep the automatic dues collection system, even though these contracts are being filled with concessions. One can’t help suspect that the Democrats are pursuing their self-interest on this point since much of the union dues money ends up in the form of campaign contributions to Democrats.
Unfortunately, many labor union officials, because of their ties to the Democratic Party, have been complicit in this agenda. While giving money to the Democrats, they have negotiated one concessionary contract after another.
Just a few weeks ago, the AFL-CIO helped organize a large demonstration in Los Angeles, that was billed as a march for the middle class. But just a few days before the march, the AFL-CIO engaged in negotiations that, according to them, showed that “collective bargaining works.” The contract they negotiated included the provision that city workers give up $400 million dollars.
What we can do to effectively defend our unions and our standard of living.
Obviously, it will be impossible for the labor unions to survive if they continue this suicidal course of making concessions while tenaciously clinging only to the right to bargain. How can unions expand their membership with this policy? Who wants to join a union that seems compulsively prepared to give up hard won gains? Who wants to join a union whose main function is to supply money to Democratic Party campaigns, not protect the membership? How can unions mobilize their members to defend collective bargaining rights if these rights are not serving the interests of the members?
Fortunately, there are already signs on the horizon of a break from this self-destructive policy. The National Nurses United swept into Madison, and called for no concessions while pointing to the growing inequalities in wealth and declining taxes on the rich. Michael Moore gave a rousing speech in Madison, pointing a finger at the huge amounts of money in the pockets of the rich while insisting that workers should make no concessions. And if you looked at the signs the public workers were carrying at the Madison demonstration and heard them being interviewed, they clearly came out on the side of no concessions.
The rejection of concessions must be a crucial component of our self-defense because we need to inspire union members to put up a fight, not demoralize them by giving away everything. But the second point is to realize we are all in this together, public and private sector workers alike. Those who are leading the attack on public workers have argued incorrectly that public workers make more money than private workers. In fact, they make slightly less. But to the degree that these attacks succeed in lowering the wages and benefits of public workers even more, then we can be assured that the corporations will return to the private sector and argue that those workers are getting more than public workers and demand more concessions from them. And then they will return to the public sector and will continue this vicious cycle until we put a stop to it.
If you do not read the newspapers carefully, you will get the impression from the mass media that the majority of people think that public workers get too much money and that social programs should be cut. In fact, the opposite is the case. A majority of Americans in fact think that public workers should not make concessions, they do not want cuts to social services or public education, they want the government to create millions of jobs, they oppose cuts to Social Security and Medicare, and they want the taxes on the rich to be raised.
We must demand that the country operate in the interests of the majority, not a small extremely wealth minority. But to succeed, we must return to the successful tactics of the 1930s. This means that we must be prepared to act independently of the Democrats and Republicans and organize massive demonstrations in the streets to make it abundantly clear to everyone that we have the support of the majority. And we must be prepared to escalate our tactics until we win our demands.
This means that we must first unite working people. We all share common interests but we are dispersed and unorganized. Therefore the first step is to carefully craft our demands so that they truly resonate with the majority of working people. They must include our most pressing and widespread needs, such as the demand for a massive federal government job-creation programs; no cuts to Social Security and Medicare; no concessions by public workers; no cuts to social services and public education. And we must demand that we tax Wall Street, the corporations and the rich to pay for all of this.
We live in one of the richest countries in the world; there is plenty of money to pay for all our needs. It is time we put up a fight and make our collective voice heard, and turn this country around.