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Leo W Gerard: Jeb! Cracks The Whip

Jeb! Bush, a boy born to wealth and privilege, whose family owns not a home but a compound of dwellings in Kennebunkport, Maine, and whose wife plunked down$25,600 for one pair of earrings, lectured last week that Americans should work longer hours.

If Americans would just work harder, every one of them could own a $600,000 getaway cottage, like the one Jeb! is building on a $1.4 million site in exclusive Kennebunkport.

And it’s not just longer hours. Jeb! believes Americans should work longer in life too. The rich boy wants to raise the retirement age to 70. But raising the federal minimum wage to help millions of struggling workers survive to age 70? No, Jeb! doesn’t see any need for that. His advice: Let working poor great-grandmas eat ramen!

2015-07-12-1436713949-4776617-Jebphoto.jpg

Art by DonkeyHotey on Flickr

As a result of Bush’s “work harder” scolding, Americans know exactly what that symbol is at the end of the name Jeb! on all of his presidential campaign literature. It’s a whip handle and blood splotch. As President, he’d crack Americans into shape!  Under a Jeb! administration, he’d demand they work more, get less and through it all gaze adoringly at another clueless, pampered Bush in the White House.

The wealthy like Jeb! made out like bandits over the past 40 years – Jeb! amassed $29 million in the eight years since he left the Florida governor’s mansion. But working Americans have not prospered. Their productivity rose, but not their wages. Part of the reason for that productivity increase is that Americans worked longer hours and corporations paid them nothing for it.

American workers put in more hours than those in any other large industrialized country, according to the Organization for Economic Cooperation and Development. In a Gallup poll late last year, full-time employees reported work weeks averaging 47 hours. That is nearly a full day beyond what is supposed to be a 40-hour work week. Forty percent said they work at least 50 hours.

Most of these workers don’t see an extra dime for all that extra work because the federal overtime regulation is so outdated, and many corporations won’t pay time and a half for hours worked beyond 40 unless forced. As it is now, the regulation requires corporations to pay time and a half only to workers earning salaries less than $23,660 a year. That is so low that only 8 percent of salaried workers qualify for overtime. It means corporations can take every cent of gain from 92 percent of salaried workers when they put in more than 40 hours a week.

Late last month, President Obama proposed increasing the overtime threshold to $50,440. Then 40 percent of salaried workers would qualify.

Jeb! opposes that. After he was ridiculed on Wednesday for saying, “people need to work longer hours,” he tried to backpedal by contending that what he really meant was that the proposed new overtime rule would push workers into part-time jobs when they needed to work longer hours.

Here’s what he said on Thursday: “I think people want to work harder, to be able to have more money in their own pockets – not to be dependent upon government. You can take it out of context all you want, but high, sustained growth means people work 40 hours rather than 30 hours, and that by our success they have money – disposable income for their families to decide how they want to spend it rather than getting in [a welfare] line.”

Silver-spoon Jeb! is just wrong. People don’t want to work harder. They’re working almost an extra day a week. What they want is to be paid fairly for the work they’re already doing. They want the minimum wage increased so that they can use their own paychecks for groceries instead of food stamps. They want the money that they’ve earned to be in their pockets – not in the pockets of 1 percenters like Jeb!

For decades after World War II, income rose in tandem with productivity. Then, in the mid 1970s, that stopped. Workers received less and less, and the top 1 percent took more and more. The result was wage stagnation for workers and income inflation for CEOs.

2015-07-12-1436714113-7772078-incometoproductivitychart.538

The comments Jeb! made last week illustrate his complete misunderstanding of that.He said: “My aspirations for the country, and I believe we can achieve it, is for 4 percent growth as far as the eye can see .  .  . Which means we have to be a lot more productive. Workforce participation has to rise from its all-time modern lows. It means that people need to work longer hours and through their productivity gain more income for their families. That’s the only way we are going to get out of this rut that we’re in.”

Jeb! suffers from the Republican blame-the-worker syndrome. He says, “Workforce participation has to rise,” as if unemployed workers chose to be laid off and languish in a life of insecurity without regular paychecks.

Jeb! and his GOP buddies should blame those actually at fault: the nation’s highly profitable corporations that cheat America’s highly productive workers. Corporations need to rise to the occasion and hire workers at decent wages. Corporations must reward workers for their increased productivity by paying them time and a half when they work longer hours.

It’s the GOP that’s in a rut. It’s a mental ditch from which they fling mud on workers endlessly while shielding corporations and the rich, like Jeb!, from responsibility. Jeb! can go ahead and crack his whip. But he should make sure wage-stealing corporations and the idle rich are at the other end.

Jeb Bush Shows He Is Complete Out Of Touch With Real Working Families

Image by Gage Skidmore

Image by Gage Skidmore

I am sure you have already seen this but I feel that I cannot let Jeb Bush’s comments go by without taking a few minutes to talk about them.

In a recent interview with the Union Leader, Jeb said, “people should work longer hours.”

Are you kidding me? This is a asinine statement from an out of touch wealthy 1%-er, who does not understand what us little people have to do just to pay our bills. When you are a wealthy career politician who won the genetic lottery to be born into an ultra-wealthy family it is easy to see why it is so easy for Jeb to say people need to work more hours.

ABC US News | World News

Jeb Bush is currently worth an estimated $12,000,000 dollars, which is up over $10 million since he left office as Governor of Florida in 2007.   During the past few years Jeb enjoyed a very lucrative speaking career earning over $50,000 per speech.

It must be hard to make ends meet when you earn more in one speech than 50% of American’s earn in a year.

His full statement only adds to the fact that he has no idea what American workers are going through.

“…we have to be a lot more productive, workforce participation has to rise from its all-time modern lows. It means that people need to work longer hours and, through their productivity, gain more income for their families. That’s the only way we’re going to get out of this rut that we’re in,” said Bush.

Let me break this down for you Jeb, because it is clear to me you need some serious help.

People are already working more and more hours per week. A Gallop poll released in 2014 show that the average weekly hours worked is 47, and nearly 40% report working in excess of 50 hours per week.

Hours Worked GalluP

 

For those who are paid a flat salary work even more with at whopping 25% reporting working over 60 hours a week.

Have you met Dawn? She was a full time salaried employee from Dollar General. She enjoys a reasonable $34,000 a year salary and for working over 70 hours a week.

Dawn’s story in nothing new and show exactly why we have to fix our broken overtime policies. Under the new overtime directive from President Obama, workers who makes a salary less than $50,000 a year would be paid overtime for every hour worked over 40.

The biggest problem I have with Jeb Bush’s statement is that we as Americans need to work more hours and be more productive which will result in higher wages.

It has been proven over and over that American’s are working more hours and are more productive than we have ever been. Between 1973 and 2013 workers pay rose a meager 9% while productive rose a whopping 73%.

Our collective rise in productive has lead to massive gains by those at the top. The average CEO pay is now over 290 times higher than the average worker. That is an increase of 937% since 1978.

The idea that we need to work longer hours and we will see continued growth in our incomes is a great idea, however facts prove otherwise.

The idea that Americans need to work longer is truly frightening when you add to the fact that Jeb Bush is advocating for “entitlement reforms” that would force people to work until they are 70.

“I think we need to raise the retirement age, not for people that are already nearing, receiving Social Security, or already on it, but raise it gradually, over a long period of time for people that are just entering the system,” Bush said. “And I think we need to do that in relatively short order.”

Imagine being 69 years old, working 5 days a week for 10 hours a day or more. Is the kind of future we really want?

This entire statement by Jeb Bush just shows how out of touch with regular American’s he really is. People do not need to work longer hours and be more productive, we need our employers to actually raise the wages to compensate us for the productivity gains we have made in the past.

AFL-CIO Worker Wins Update: Wages and Numbers Rise for Working Families

WASHINGTON, DC– Workers across the country have stood up in the past month to fight for better wages and working conditions.

Worker Voices Raise Worker Wages: Under pressure from workers, major corporations such as Walmart, Target, TJ Maxx, Marshall’s, and McDonald’s have raised their minimum wage over the past months, addressing America’s national wage stagnation crisis. From coast to coast workers have held actions calling on employers to raise wages, and national leaders have echoed calls in favor of a raising wages agenda.

37,000 Workers Get a Raise as Seattle Minimum Wage Hike Begins: Seattle’s minimum wage rose to $11 on April 1stas part of a multi-step process that will eventually result in a $15 minimum wage throughout the city by 2021.  This raise comes as over two dozen stateshave minimum wages above the federal minimum wages.

The Union Difference in Mining: Safety and Efficiency: According to a March report by SNL Energy, underground coalmines with union workers are safer and more productive than their non-union counterparts. Of the 16 miners who died on the job in 2014, only one was at a union mine, while union miners were found to be nearly 20 percent more productive per hour.

Workers Rev Up Organizing Efforts as UAW Membership Climbs: The United Auto Workers added more than 12,000 members in 2014 according to its Labor Organizing Annual Report released in March. UAW membership has grown for five consecutive years with nearly 50,000 new members since 2009.

NYU and UAW’s graduate teaching assistants reach “A+” agreement:  Last month, New York University (NYU) and GSOC-UAW Local 2110, which represents graduate teaching and research assistants, reached a tentative agreement that provides improved wages and benefits among other improvements. This week, GSOC members overwhelmingly ratified the agreement making it the only contract covering graduate teaching and research assistants at a private university.

Workers Fight For Schedule Stability in California: Workers in California ramped up a fight last month to ensure that service industry employers give their workers at least two weeks’ notice before scheduling shifts. This law seeks to provide predictable work schedules to millions of workers in industries such as fast food and retail, where workers often have no notice of hours they’re expected to work.

President Obama Says ‘No’ To GOP Efforts to Weaken Union Rules: President Obama blocked Congressional GOP efforts last month to overturn NLRB rulings to streamline the union election process, making it easier for workers to have a voice. The NLRB regulations were issued last December and take effect on April 14th.

 

Worker Wins Update: Collective Action Results in Collective Gains in a Big Month for Workers

Workers across the country have stood up in the past month to fight for better wages and working conditions.

Walmart Workers Greet Wage Hike With A Smile: After years of collective actions calling for a raise in wages, Walmart workers won a huge victory as the largest private employer in the United States announced it will soon raise wages to $10 an hour for its lowest-level employees.

Brooklyn Cablevision Workers Get Clear Picture of Bright Future with New Contract: After three years of negotiations, Cablevision workers in Brooklyn, NY have signed a contract with the company, becoming the first workers in the company to earn a union contract.

Rocky Mountain Bus Drivers Deliver Workplace Protections Through Organizing: Colorado bus drivers have organized a vote on establishing a union for workers in an attempt to strengthen their regional transportation system. Drivers assert that raising wages would keep veteran drivers in the system and ensure quality service.

The Nutmeg State’s Spicy Good News: More Union Members: According to the US Department of Labor, 24,000 Connecticut workers joined unions last year. These gains include more than 1,500 University of Connecticut graduate students, and major worker wins in the health care and construction industries.

Workers See Green as Organizing Efforts Pay Off: Last week, workers at a major medical cannabis production facility in Minnesota have voted to organize, making it the first medical marijuana facility in the state to do so.

Columbia University Graduate Student Employees Make the Grade With Union Push: In mid-February, The Graduate Workers of Columbia filed a petition with the NLRB to reopen a case that denied graduate student employees the ability to become a recognized union. This filing comes after a majority of Columbia University graduate student employees signed cards to organize a union.

Nurses Show Organizing Is the Right Prescription for Better Pay, Rights: Northern California nurses are getting their voices heard through an organizing campaign that would create a new union for nurses, nurse practitioners, and physician assistants. Workers have cited need for additional financial stability and workplace protections.

Today’s Lesson – Fighting for the Rights of Workers: More than 750 Boston University adjunct professors voted to form a union in a fight for better workplace rights and pay. February’s vote comes on the heels of a growing trend of universities to use lower-paid adjunct professors.

Low-Wage Workers in Oakland Raise Hopes After Raising Wages: The minimum wage in Oakland, CA was raised from $9.75 an hour to $12.25 an hour Monday, March 2nd, providing a huge boost for low-wage workers struggling to make ends meet. The increase will impact 48,000 people, a quarter of all workers in Oakland, while also providing paid sick leave to over 56,000 workers.

Philly Families Stay Fit with Paid Sick Leave Law: Workers in Philadelphia achieved a critical victory as the City Council passed legislation to establish mandatory paid sick leave for an estimated 200,000 residents. Philadelphia followed the lead of 16 cities and three states that have enacted similar laws.

Facebook Workers ‘Like’ Better Conditions, Pay Through Union: Facebook shuttle drivers voted to approve a new contract that will raise wages and improve workplace conditions. In addition to Facebook, drivers for major tech companies such Apple, eBay, and Yahoo have also voted to form a union, demonstrating a trend towards better pay and benefits for workers in Silicon Valley.

NAFTA Failed to Live Up to Promises

By Arnie Alpert and Gabriel Camacho

In the twenty years since the North American Free Trade Agreement (NAFTA) went into effect, millions of Mexicans have been pushed by NAFTA to make the dangerous journey across the border into the United States, many without legal authorization.  The U.S. government has responded by turning the border into a militarized zone, jailing hundreds of thousands of people, and deporting record numbers back across the border.

Militarization of the border began in 1994 with Operation Gatekeeper, which erected fencing, walls, and other barriers between San Diego, CA and Tijuana, Mexico, forcing migrants into dangerous desert terrain.

This was not supposed to happen.

According to NAFTA’s backers, the agreement was supposed to promote prosperity in both countries and actually reduce the pressure to migrate.

President Bill Clinton asserted NAFTA would give Mexicans “more disposable income to buy more American products and there will be less illegal immigration because more Mexicans will be able to support their children by staying home.”

Mexico’s former President, Carlos Salinas, offered a similar opinion:  NAFTA would enable Mexico to “export jobs, not people,” he said in a 1991 White House news conference alongside President George H. W. Bush.

William A. Ormes wrote in Foreign Affairs that NAFTA would “narrow the gap between U.S. and Mexican wage rates, reducing the incentive to immigrate.”

So what happened?  As a precondition for NAFTA, the U.S. demanded drops in Mexican price supports for small farmers.  The agreement itself reduced Mexican tariffs on American products.  These changes meant that millions of Mexico’s small farmers – many of them from indigenous communities – could not compete with the highly subsidized corn grown by U.S. agribusiness that flooded the local Mexican market.

Dislodged from the places where their families had lived for generations, many people did in fact seek employment in export-oriented factories and farms.  But there were too few jobs to go around, and those jobs that were created did not generate the “disposable income” President Clinton had promised.

A 2008 report on “NAFTA’s Promise and Reality” from the Carnegie Endowment for International Peace concluded that while half a million manufacturing jobs were created in Mexico from 1994 to 2002, nearly three times as many farm jobs were destroyed.

As for Mexican wages, they went down, not up, during the same period.  “Despite predictions to the contrary, Mexican wages have not converged with U.S. wages,” Carnegie observed.

Unable to earn a living at home or elsewhere in their own country, Mexicans did what people have done for ages; they packed their bags and headed for places where they thought they could find employment.

The experts shaping NAFTA knew that the deal would disrupt the Mexican agricultural sector.  That’s why Operation Gatekeeper was implemented the same year as NAFTA.  It’s impossible to integrate national economies without disrupting local ones – something that should give pause to those proposing new trade agreements today.  The realities of NAFTA should not be replicated.

As the American Friends Service Committee outlines in “A New Path Toward Humane Immigration Policy,” the U.S. should advance economic policies that reduce forced migration and emphasize sustainable development.  Instead of policies like NAFTA that elevate rights of transnational corporations above those of people, we need alternative forms of economic integration that are consistent with international human rights laws, cultural and labor rights, and environmental protections.

Modern-day free trade agreements are basically arrangements that take rights away from citizens and bestow expansive benefits to multi-national corporations.

Workers on both sides of the border have one thing in common:  they need the ability to organize for higher wages and decent working conditions.   Without the opportunity for workers to benefit from the rewards agreements like NAFTA generate for corporations, “free trade” becomes just another driver of the widening gap between the ultra-rich and everyone else.

With the Obama administration pushing hard to create a new arrangement linking the economies of eleven Pacific rim countries, and another that ties the U.S. economy to that of the European Union, it’s time for a new path.

Arnie Alpert is the American Friends Service Committee’s New Hampshire program director. Gabriel Camacho coordinates the AFSC’s Project Voice in Cambridge, Massachusetts. 

(This Op/Ed was written by NHLN regular contributor Arnie Alpert and also appeared in the NH Business Review)

The Courts could destroy even MORE of our rights while we wait for Congress to fix Taft-Hartly

1947 CIO rally at Madison Square Garden

1947 Rally at Madison Square Garden

As I promised in yesterday’s post, here are a few examples of how things are getting worse, the longer we wait for Congress to fix (or repeal) the Taft-Hartley Act.

More states have passed so-called “Right to Work” laws. Nevermind what they’re called, RTW laws restrict employers’ rights: they prohibit employers from voluntarily agreeing to “agency fee” clauses in their union contracts. Last year, Indiana and Michigan joined the list of states that restrict employers’ rights; and the American Legislative Exchange Council (ALEC) is clearly still trying to spread their “model legislation” nationwide.

The Supreme Court will soon decide two cases that could further limit employers’ rights in their dealings with employee unions. Read the New York Times article here.

  • The first case will decide whether employers have the right to agree to remain neutral during a union organizing drive. (Shouldn’t employers be able to allow their employees to make their own decisions about union representation? In many worksites, unions and employers work cooperatively because they share the same goals. Why should federal law require the employer-union relationship to be adversarial, rather than cooperative?)
  • The second case attempts to impose “Right to Work” on the whole country through a court decision — rather than leaving it up to each state to decide for itself whether to limit employers’ rights.  (What happened to that old Tenth Amendment/states’ rights principle?)
  • The second case also challenges whether a state government has the right to allow union representation of home-care workers who are paid by Medicaid.  (Again: are we about to see the federal court system restrict a state government’s exercise of reserved powers?)

Taft-HartleyAnd then there’s Boeing. Just my personal opinion, but… it sure seems to me like Boeing is setting up another chance to litigate all those legal theories it came up with in 2011, back before the Machinists asked the NLRB to drop its complaint about Dreamliner production. The basic question at issue: whether a company has the right to relocate jobs in retaliation for (legally protected) union activity. That 2011 complaint was part of “a very long line of cases that the NLRB has been pressing since the 1940s, when employers began moving work from unionized workplaces in the industrial Northeast to non-unionized workplaces in the Southeast and later the Southwest.” Just think what the impact on unions could be, if Boeing persuades the courts to agree with its legal theories. (Read more NHLN coverage of Boeing here.)

Why am I so concerned about these Court cases (and potential court cases) ?  Well… because the Supreme Court is now headed up by Bush appointee John Roberts.  Back in 2005, he was described as one of the “three possible nominees that big business would cheer” — in part because they thought Roberts might “influence the court to decide more cases deemed critical to business.”  Quoting one observer of that nomination process: “Roberts has spent his career as a mind-for-hire on behalf of the rightwing Republican agenda.”  Quoting another: “if Roberts feels free to overturn precedent… Of particular concern is a return to the Lochner era, a time when free-market capitalists read their ideology into the Constitution by striking down statutes aimed at protecting workers’ health and safety.”

I guess we’re about to find out whether those observers were as accurate in their predictions as President Harry Truman was, in his.

(If you didn’t read yesterday’s post, to read Truman’s prognostications from 1947, click here.)

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Sen. Edward M.KennedyAnd, in a sad epitaph for Sen. Ted Kennedy… as far as I can tell, no-one has re-filed the Employee Free Choice Act since he died.

(Read yesterday’s post to learn more about the economic and social problems caused by Taft-Hartley, and one possible reason why Sen. Kennedy filed EFCA to fix them.)

Still Waiting for Congress to fix Taft-Hartley By Passing EFCA

Sen. Edward M. Kennedy

It has been a decade since Sen. Ted Kennedy first filed the Employee Free Choice Act.

He filed the bill on Friday, November 21, 2003 – almost exactly 40 years after the death of President John F. Kennedy.

A coincidence? Not likely. Here’s the back story:

The Employee Free Choice Act would restore union organizing rights that were taken away by the 1947 Taft-Hartley Act. John F. Kennedy was a member of the Congress that passed Taft-Hartley.

“The first thing I did in Congress was to become the junior Democrat on the labor committee. At the time we were considering the Taft-Hartley Bill. I was against it, and one day in Harrisburg, Pennsylvania, I debated the bill with a junior Republican on that committee who was for it . . . his name was Richard Nixon.” [from a 1960 recording of President Kennedy reflecting on his career]

Both Kennedy and Nixon believed that Nixon won that debate. And just weeks later, Congress passed the Taft-Hartley Act, overriding a veto by President Harry Truman.

President Truman was eerily accurate in his predictions of what the Taft-Hartley Act would do.

Photo from Kheel Center, Cornell University via Flikr/Creative Commons

Photo from Kheel Center, Cornell University via Flikr/Creative Commons

From his radio address to the country:

“The Taft-Hartley bill is a shocking piece of legislation. It is unfair to the working people of this country. It clearly abuses the right, which millions of our citizens now enjoy, to join together and bargain with their employers for fair wages and fair working conditions. …”

“I fear that this type of legislation would cause the people of our country to divide into opposing groups. If conflict is created, as this bill would create it—if the seeds of discord are sown, as this bill would sow them—our unity will suffer and our strength will be impaired.”

From his veto message to Congress:

“When one penetrates the complex, interwoven provisions of this omnibus bill, and understands the real meaning of its various parts, the result is startling. … the National Labor Relations Act would be converted from an instrument with the major purpose of protecting the right of workers to organize and bargain collectively into a maze of pitfalls and complex procedures. … The bill would deprive workers of vital protection which they now have under the law…. This bill is perhaps the most serious economic and social legislation of the past decade. Its effects–for good or ill–would be felt for decades to come.”

Fast-forward through those decades, and read the testimony of former National Relations Labor Board Hearing Officer Nancy Schiffer:

“At some point in my career… I could no longer tell workers that the [National Labor Relations] Act protects their right to form a union. … Over the years, the law has been perverted. It now acts as a sword which is used by employers to frustrate employee freedom of choice and deny them their right to collective bargaining. When workers want to form a union to bargain with their employer, the NLRB election process, which was originally established as their means to this end, now provides a virtually insurmountable series of practical, procedural, and legal obstacles.”

Read this report by researchers at the University of Illinois-Chicago:

“Each year in the United States, more than 23,000 workers are fired or penalized for union activity. Aided by a weak labor law system that fails to protect workers’ rights, employers manipulate the current process of establishing union representation in a manner that undemocratically gives them the power to significantly influence the outcome of union representation elections. … Union membership in the United States is not declining because workers no longer want or need unions. Instead, falling union density is directly related to employers’ near universal and systematic use of legal and illegal tactics to stymie workers’ union organizing.”

Read the report by Cornell University Professor Kate Bronfenbrenner:

“Our findings suggest that the aspirations for representation are being thwarted by a coercive and punitive climate for organizing that goes unrestrained due to a fundamentally flawed regulatory regime … many of the employer tactics that create a punitive and coercive atmosphere are, in fact, legal. Unless serious labor law reform with real penalties is enacted, only a fraction of the workers who seek representation under the National Labor Relations Act will be successful. If recent trends continue, then there will no longer be a functioning legal mechanism to effectively protect the right of private-sector workers to organize and collectively bargain.”

Now, go back and consider President Truman’s most serious prediction from 66 years ago: that the Taft-Hartley Act “would cause the people of our country to divide into opposing groups. If conflict is created, as this bill would create it—if the seeds of discord are sown, as this bill would sow them—our unity will suffer and our strength will be impaired.”

President John F. Kennedy

Think about our national politics.  Isn’t our country divided enough? Isn’t it time to reverse the process started by the Taft-Hartley Act?

It’s been a decade since Sen. Kennedy first filed the Employee Free Choice Act.  Next week, we will mark a half-century since President John F. Kennedy died.

 

Isn’t it time to yank the roots of discord, start ending the conflict, and heal the division that was created by the Taft-Hartley Act?

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To my long-time readers: apologies if this sounds familiar.  Once again, I have just updated last year’s post to reflect the passage of time; there was no reason to write a new post, because things haven’t changed.  So instead of trying to reword things I’ve already said, I’m just going to start using a new hashtag: #dejavu. (You can see all my repeats in one place!)

Actually, it’s not exactly true that “things haven’t changed.”  In this case they are changing — they’re getting worse.  But more on that, tomorrow.

Hedrick Smith Speaks to the Community about Who Stole the American Dream.

PaperbackCoverIf you are like me, you have probably never heard of Hedrick Smith before.  Those people a little older than me know his work very well.  Hedrick was a journalist and the former head of the Washington D.C. bureau for the New York Times.  He covered at least four Presidents as a reporter and is an accomplished author.  Hedrick even won a Pulitzer Prize for his work in Russia and Eastern Europe in 1974.

Hedrick’s newest book is called ‘Who Stole the American Dream?’ and it provides a very detailed description of what happened to the middle class in America.

  • What lead to the sub-prime mortgage crisis that nearly bankrupted America?
  • What happened to the labor unions and prosperity of the middle class?
  • Why is business now more powerful in Washington than the people our elected officials are supposed to be representing?

HSmith 2Hedrick addressed all these topics in his lecture to a group of about 50 people at the NH AFL-CIO office last week.

After saying that “being here reminds me of the heyday of the labor movement,”  Hedrick started his lecture by asking the question “How did we get to here?”  How did we get to a point in America where you are either just barely getting by or one of the ultra-wealthy?

Hedrick said “Some people ask me, aren’t you preaching to the choir?” when speaking to labor groups.  His response: “All the choir members need to sing from the same sheet music.”  We will not be able to fight back against these changes until we understand how we got here.  Hedrick described his book as an intellectual arsenal for the labor movement and other socially progressive organizations.

Rebuilding America with excess money from the DOD.

“Labor is a strong protector of the middle class,” Hedrick said. “The heyday of the middle class was a time when the labor movement was strong.”

Hedrick talked about how we need to rebuild our infrastructure and get Americans back to work, how we need to focus on what is happening here, and stop spending all of our tax dollars fighting in other countries.  “Why are we building bridges in Kandahar, and not in Kansas?” Hedrick asked.  He explained that too much of our federal budget is going to the Pentagon; Defense spending is higher now than it was in the Cold War – even though, during the Cold War everyone was afraid of an all-out nuclear war.

In his book, Hedrick details how much money we have spent on the current ‘wars’ that we are involved in: an estimated $3.5 to $4.5 trillion dollars have been spent, even though taxes have not been increased to pay for it.  Even now, as the conflicts in Iraq and Afghanistan are winding down, the “extra” money Congress spent on those war efforts is still in the federal budget.  That means Defense is enjoying grossly inflated appropriations – even though there are no actual ‘wars’ to fight.

Hedrick suggested that if we need to find the money to rebuild our roads and bridges, we should start by looking at the Pentagon budget.  He also proposed the idea of mandatory military service, if not for everyone then for everyone in Congress.  “We would go into a lot less wars if we had mandatory (military) service,” he said.  Hedrick also questioned Congress’ ability to make decisions about war if the representatives have never served themselves.

Stakeholder Capitalism vs. Shareholder Capitalism

HRSmith 4There are two very different perspectives about how a business should be run.  On one hand there is the view – best described by Henry Ford – that a company is there to produce something, and pay people a wage high enough that they could become your customers.  This is commonly referred to as ‘Stakeholder Capitalism’.

There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible.”
HENRY FORD

On the other hand, there is the current business philosophy that companies are only there to make their owners and shareholders money.  This is called ‘Shareholder Capitalism’.

This difference is a major focus in Hedrick’s new book.  He spent a majority of the time during last week’s discussion talking about the differences between these two views – and how ‘Shareholder Capitalism’ has led to the decline of the middle class.

Hedrick explained that ‘Stakeholder Capitalism’ drove the American economy after World War II.  From 1945-1970, the productivity of American workers went up by 96%.  At the same time, the average median income grew by 94%.  “Growth in productivity lead to shared prosperity,” Hedrick observed.  Everyone from the poor to the wealthy prospered during these years – in fact, those at the bottom of the wealth spectrum benefitted even more than those at the top.

Then, beginning in the 1970s, businesses moved into ‘Shareholder Capitalism’.  Productivity continued to rise by leaps and bounds, yet workers’ wages stayed flat.  The added revenue the company received from the higher productivity had to go somewhere – and it went right to the executives and shareholders. This is why the average CEO’s salary is now 380 times higher than the average worker’s salary.  [Read Citigroup’s report “Plutonomy: Buying Luxury, Explaining Global Imbalances” here.]

Through the 1970s, CEOs knew that shared prosperity was good business. “The job of the CEO was to balance the needs of all the Stakeholders,” Hedrick explained.  That means balancing the wages of the workers with the cost to consumers, and the need to turn a profit for the shareholders.  This was the job of the CEO.  Some of those needs were very simple.  The workers needed money.

The middle class had been the major consumer in our economy.  Middle class Americans are spenders, not savers: they spend 90% or more of what they bring home.  For the majority, the only savings they accrue is paying off their mortgages.   If the middle class does not have money to spend (like our current situation) then the economy is very slow to recover from any economic downturn.

In 1948, the United Auto Workers (UAW) and the CEO of General Motors Charlie Wilson signed the first collective bargaining agreement that included a lifetime pension.  This means that after you put in your many years of service to GM they would pay you a salary for the rest of your life.  This trend continued in union and non-union companies for the next few decades.  GM became the model for industry and labor relations throughout the country.

By 1980, 84% of all companies with 100+ employees had a full pension for their retired workers; 70% of them had full healthcare coverage for retirees as well.

Hedrick ArnieAlpertNow that ‘retirement security’ has all but disappeared.  Only 30% of companies with 100+ employees offer a pension; and only 18% offer retiree healthcare.  Those numbers go down every year, as workers who retired with these ‘outdated’ pensions are passing away.

GM used to be the template for a successful industry, now Wal-Mart is the template,” said Hedrick.  Wal-Mart is the modern day success story in the world of ‘Shareholder Capitalism’: they have experienced massive growth and high stock returns.  Just disregard the fact that they do not offer healthcare to the majority of their employees, or pay wages that would keep their workers out of poverty.

In ‘Shareholder Capitalism’ the stakeholders (consumers, shareholders, and workers) are in conflict with each other.  The shareholders are the only people the CEO cares about: business is all about profits and stock prices.  This is also why corporations like Wal-Mart buy back their stock to continue to drive up stock prices.

The middle class is not getting their share of the pie,” said Hedrick.  “The system (economy) will not work until the middle class get more of the pie

The middle class used to drive the political bus

Hedrick discussed how the middle class used to drive our political system.  Especially from the 1960s through the 1980s the middle class effected the most change.

The middle class was made up of many different movements, including the civil rights movement, the environmental movement, and the women’s movement.   Hedrick noted that organized labor was right there in the middle of it: labor was there helping to safeguard the rights of all workers, regardless of color or gender, and ensuring that all were paid equally.

For many years, labor and these organizations pushed the political system.  Hedrick noted that the AFL-CIO nationally seems to be making a push to be more like the labor movement of the past.  Labor is working with outside groups to help workers who are not official union members.  Hedrick praised the union groups who are helping to push legislation in Congress and state Legislatures to raise the minimum wage.

Hedrick described one other thing that helped these organizations move the middle class ahead.  It’s something that has been completely lost in today’s political system: hope.

People in the middle class used to believe that when something was broken in Washington that together they could change it.  They effected a great deal of political change and helped move our country forward.   Many people do not feel they can make a difference anymore.  We need bring hope back. We need people to believe again.

The Shift In Political Power

All through the 1960s, the middle class prospered and dominated the political system.  Now that is completely the opposite.  Business and their paid lobbyists control Washington.  What happened to cause this major shift?

Hedrick asked, “How many of you have ever heard of the Powell Memorandum?”  Hedrick admitted that until he started writing Who Stole The American Dream he had never heard of it before either.  Even though Hedrick was a journalist in Washington, D.C. in 1974, he had never heard of it.  It was not given to the press or the public; instead, it was shared “under the table. ‘

Lewis Powell was conservative, a corporate lawyer, and eventually a Supreme Court Justice. The 1974 ‘Powell Memorandum’ drafted a plan for business and industry to counter middle class movements.  Powell said, “These movements and regulations are killing the free enterprise system.”  He argues that the business industry needed to organize (like many of the other movements of the time), that they needed to put people on Capitol Hill and use their collective will to influence the regulations and policy changes that are hurting business.

Does that sound familiar?”  Hedrick asked the AFL members.

Starting in the mid-1970s, business took this message to heart.  They created the ‘Business Round Table’, a group of businesses who pooled their resources to lobby Congress.  Now the BRT is the largest single lobbying group in the nation’s capital.  The US Chamber of Commerce went from 6,000 members in 1974 to over 600,000 members in 2010.

These changes shifted the power from the people and pushed it toward the business community.  These lobbyists started pushing more and more money into the political system and began to overpower the voices of the people.  They quickly got to work: pushing for lower taxes, lower regulations and what they called ‘business-friendly’ policies.

“They started by deregulating trucking and telecom,” said Hedrick.

In 1978, with a Democratic President and both Houses of Congress controlled by Democrats, the business lobby passed some of the most damaging laws for American workers.  For example, they changed the tax code and wrote in paragraph 401 sub-section K to allow executives to have a tax shelter for their earnings.  The 401(K) provisions quickly became the answer to lowering retirement costs and keeping more profits.  Some companies, such as ENRON, even forced their workers to use their 401(k)s to buy stock in the company – which would force stock prices up and up. But then if the company goes under, as ENRON did, the workers have completely lost their retirements as well as their jobs.

The business lobby also changed the bankruptcy law to allow the current management to continue to control the company through the bankruptcy process.  Previously, a neutral third party was brought in to divide the company assets and ensure that workers’ pensions were protected; but now, companies can file for bankruptcy and sell off all assets, leaving the workers stranded.  In his book, Hedrick uses the United Airlines bankruptcy as an example of how this policy hurts working families.  We can also see the effects of this change in the aftermaths of the Hostess and Patriot Coal bankruptcies.

The ‘Powell Memorandum’ created a political monster.  Now we have the ‘Gang of Six’, a Washington based lobbying group that “represents 40,000 member companies from beer distributors to furniture suppliers, is the dean of a bloc of a half dozen U.S. trade groups. The groups represent companies that employ more than 22 million people and generate at least $5.2 trillion in goods and services, or almost half of U.S. gross domestic product. If the Gang of Six were a country, it would constitute the world’s second-biggest economy, eclipsing Japan’s $4.7 trillion GDP.”

This ultra-powerful lobbying group is lead by Dirk Van Dongen, the “most powerful man you never heard of,” said Hedrick.  This is the guy that Carl Rove had lunch with the day after President G.W. Bush was inaugurated – that is how powerful Van Dongen is.

Making Change

What can we do about this?  How can we stop this cycle and get back to an age of prosperity again?

Many of Hedrick’s ideas have to do with fixing our broken political system. “We need to get the big money out of politics,” said Hedrick.  “We need to fix the gerrymandering” of our Congressional districts.  We need to have open disclosure on all campaign contributions.  “This may mean we need to go back to publicly funded campaigns again,” said Hedrick.   We need the Federal Election Commission to do a better job of regulating the elections and enforcing the current election rules.  Hedrick continued, “The FEC could pass a rule that would enforce open disclosure tomorrow if they wanted to.”

Hedrick talked about ‘Open Primaries’ as a way of countering gerrymandering.   There would be no such thing as safe districts any longer. Regardless of political party, all candidates would be on the same primary ballot – then the top two candidates in the primary would run against each other in the general election.    Hedrick said that in some ‘Open Primaries’ have resulted in two general-election candidates from the same party.  He also noted that places that had ‘Open Primaries’ saw a 20% increase in voter turnout – because people once again believe that their vote will make a difference.

Hedrick also suggested making changes to the corporate tax structure, particularly reducing taxes for corporations that bring jobs here to the United States and raising taxes on those that send jobs away and keep profits overseas.  “Last year corporations held $1.7 trillion in corporate profits overseas,” said Hedrick. “Now they want to bring it back, so they are pushing Congress for another ‘tax holiday’.”  A tax holiday would allow these corporations to bring their money back from overseas without any penalty.  Many of them would immediately buy up shares of their own corporations, forcing stock prices up, and increasing their returns.  The people (the government) get nothing out of this.

Summary

Income inequality, the fall of the middle class, and the rise of business profits are all related.  Our world is very interconnected and what seemed like minor policy changes 30 years ago have turned out to be some of the most damaging.   We need to take back our political system and get back to making Congress work for the people, not the corporations.

Hedrick Smith laid out a number of these ideas in his hour-long lecture – but there is so much more in his new book.  I recommend that everyone go out a get a copy of ‘Who Stole the American Dream’.

Do Free-Trade Agreements Create Jobs?

Written by Dave Johnson (Senior Fellow at Our Future)
Originally posted on OurFuture.Org

global deal free trade

The corporate push to get Congress to approve the Trans-Pacific Partnership (TPP) trade agreement is about to begin. Again and again we have been promised that these trade agreements “create jobs” and grow the economy. So do they?

“Free-Trade” Claims

Proponents of current corporate-negotiated trade agreements claim that the agreements increase jobs and boost economies. For example Time today has a column, Voters Won’t Like It, but We Have to Bring Back Free Trade, by Michael Schuman. Schuman claims that these agreements are “beneficial for economies overall — boosting exports, enhancing efficiency and reducing prices for consumers.”

Is this what actually happens? Let’s look at what has happened as a result of past agreements.

NAFTA

Negotiated by the George HW Bush administration and pushed by President Clinton, the North American Free Trade Agreement (NAFTA) went into effect January 1, 1994.

Ross Perot famously said we would hear a “giant sucking sound” as NAFTA took jobs from the US and he was right. According to the Economic Policy Institute (EPI) briefing paper Heading South: U.S.-Mexico trade and job displacement after NAFTA, “As of 2010, U.S. trade deficits with Mexico totaling $97.2 billion had displaced 682,900 U.S. jobs.” (That is net jobs, taking into account jobs gained.)

The EPI study did not look into NAFTA’s effect on US wages (but a 2001 EPI study found wage decreases). Clearly, however, NAFTA enabled companies to close American factories and move production to low-wage factories, putting downward pressure on everyone’swages.

Public Citizen’s document, NAFTA’s Broken Promises 1994-2013: Outcomes of the North American Free Trade Agreement points out that over one million Mexican campesino farmers were driven out of business (and likely driven north to the US) by subsidized US corn from our giant industrialized farms.

China

China became a member of the World Trade Organization (WTO) in 2001. Americans were promised this would expand market opportunities for U.S. companies, thereby increasing jobs and American prosperity. How has this worked out?

In August, 2012 EPI estimated that the US lost 2.7 million jobs as a result of the U.S.-China trade deficit between 2001 and 2011, 2.1 million of them in manufacturing. Aside from job losses wages US wages fell due to the competition with cheap Chinese labor costing a typical household with two wage-earners around $2,500 per year.

Last month our country’s humongous trade deficit with China was $30.1 billion. That translates to a yearly deficit of more than $360 billion drained straight out of our economy.

Korea

In spite of the obvious problems with these trade agreements, the US approved an agreement with Korea that took effect March 15, 2012.

EPI reported in July, 2013 that the US-Korea free trade agreement had already cost the US 40,000 jobs and increased our trade deficit by $5.8 billion. According to EPI,

The tendency to distort trade model results was evident in the Obama administration’s insistence that increasing exports under KORUS would support 70,000 U.S. jobs. The administration neglected to consider jobs lost from the increasing imports and a growing bilateral trade deficit. In the year after KORUS took effect, the U.S. trade deficit with South Korea increased by $5.8 billion, costing more than 40,000 U.S. jobs. Most of the 40,000 jobs lost were good jobs in manufacturing.

So How Did They Work Out?

Again and again these trade agreements resulted in loss of jobs, particularly in higher-wage sectors of our economy like manufacturing, and big increases in the trade deficit. Yes, exports increased adding jobs in some sectors but imports increased more, costing more jobs than those gained. And the sectors that lost jobs tended to be higher-wage, like manufacturing.

While honest and fair trade is a good thing, these trade agreements are written to promote the interests of the giant and powerful multinational corporations over the interests of working people, smaller competing corporations, citizens groups, democracy and the environment. These “free-trade” deals increase unemployment, drive down wages and harm the environment while dramatically increasing the wealth and power of the 1%.

Again, fair trade is great. But trade deals written of by and for a few giant, multinational corporations are good for those corporations and the billionaires behind them — and onlythose corporations and the billionaires behind them.

The Worst Effect: Widespread Job Fear

When our government just lets companies close a factory here and move production to a country where people have few rights and can’t do anything to make their situation better, what do you think that will do to wages and rights here? When your boss can threaten to lay you off and move your job out of the country, what are you going to say? Are you going to complain about the job and demand a raise?

Job fear is rampant in today’s economy, so everything is sold as a promise to create jobs. Heck if eating bugs will “create jobs” I’ll try it. And you can be sure that the fried bug industry lobbyists are going to promise just that.

So these giant-corporate-promoting trade deals are sold with the promise that they will “create jobs” even though we see again and again that the opposite occurs. Ironically, the job fear so many of us experience is the result of these trade agreements that enabled corporations to close factories here, ship the equipment out of the country, make the same stuff there and bring it back here to sell in the same stores to the same customers. (For some reason that is called “trade.”)

These Agreements Reign In Our Democracy

Now the giant corporations are working on the Trans-Pacific Partnership (TPP). Only a small part of this agreement covers “trade.” Much of it is about “investor rights.” This means that countries that enter into the agreement will not be able to do things that limit the profits of corporations. This includes trying to enforce environmental regulations, trying to get low-cost medicine to sick people, etc. It won’t matter if we call ourselves a sovereign country and a democracy — we will not be allowed to pass the laws that we want to if they interfere with the “rights” of the owners of the giant corporations.

These trade agreements are negotiated by giant multinational corporations along with government officials who understand they will get lucrative jobs with those corporations. They benefit only the 1% and the billionaires behind these corporations. They have not helped our economy and have not increased jobs. In fact they have led to massive trade deficits that are draining our economy, massive job loss and wage loss, and job fear for those still working.

We must insist that trade from now on agreements be negotiated with all of the stakeholders at the table in a process that guarantees their interests have equal weight with the interests of the giant corporations. Representatives of environmental organizations, human rights groups, labor groups, consumer groups and all other stakeholders must be included in these negotiations.

We must also insist that existing agreements be renegotiated so that We the People benefit, instead of just the billionaires behind the giant corporations.

The Info-Graphic That Shows What Is Really Happening To Adjunct Faculty Members

For many years now we have been telling our children that they need to get a college degree.  For some this is a large university.  For many others this is a small community college like the Nashua Community College.

Earlier this year we talked about the Community College System of NH (CCSNH) and their refusal to sign a contract with the adjunct professors at their schools.  We also talked about how the executive staff of the CCSNH were getting outlandish pay raises while the adjuncts got shafted.

Below is a new info-graphic highlighting some of the other problems facing adjunct professors at colleges across the country.  The biggest problem is pay.  Full tenured professors are making in excess of $120,000 while adjunct professors are lucky to be making $20,000 a year.

This is wrong and something should be done about it.  We need to invest in our schools and colleges to lower the cost for students and increase the pay for faculty.  These are the people who are teaching our children and they are making a little more than a grocery store stock boy.

Un-Hired Ed: The Growing Adjunct Crisis
Source: Online-PhD-Programs.org

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