Critical Evaluation We Are Getting Played: Employment

2008-08-20
By DeAngelo Starnes

The Hindeburg. The Titanic.  Our economy. Am I sounding redundant?  Until we get this thing turned around, I hope so.  Paul Revere is my hero.

How did we allow ourselves to become sidetracked by terrorism although they stopped trying to capture Bin Laden?  That’s the moving hand.  While the media and the government had you focused on some unseen and broadly-defined terrorists overseas (by claiming you needed to keep them in office so they could protect you), we suffered economic terrorism here at home via downsizing and outsourcing despite many corporations experiencing healthy profits. 

Are you feeling underworked and overpaid?  I didn’t think so.  But that’s what they want you to believe every time you read the paper or listen/watch the news.  Why are we barely surviving?   Why are we living paycheck to paycheck? 

For most of us, our jobs determine our income and its growth.  According to the Economic Policy Institute’s The State of Working America 2007, the working class faces two problems as it relates to income: wage stagnation and a growing gap between productivity and income growth.  Basically, we are more productive than ever but we’re taking home less as it relates to cost of living standards.  In fact, the report points out, between 2000 and 2004, American productivity rose by 14% while real median family income fell by 3% or about $1,600 in 2004 dollars. 

How did that happen?  People didn’t get raises.  Healthcare benefits were slashed.  Pensions were bankrupted.  Jobs were eliminated without decreasing the workload.  Manufacturing jobs went overseas while plants closed leaving people unemployed.   The jobs that were created were in the service industry and pay less than the ones lost.  Immigrants willing to work in sweatshop conditions are attaining a higher share of employment.   For the plants and shops that have survived globalization, employers often demand two-tiered wages and benefits whereby new employees are hired at lower rates of pay and take longer to get to the top-level while performing the same work.  And when productivity dips, management demands salary decreases.

Information and automated technology ironically eliminated the need for people power.  When was the last time you called a customer service number and actually had a live person answer the phone without having to go through several prompts before doing so?  When was the last time someone pumped your gas for you?  You can book your airline tickets, hotel, and rental car online.  You have to check yourself in at the airport, and increasingly, are checking and bagging your own groceries.

Our societal problem is imbalance i.e. wealth disparity between owner and worker, capital and labor.  Productivity is increasing the economic pie but your share is getting smaller and smaller.   Meanwhile, top executives are keeping that increased pie for themselves and their shareholders. 

The Economic Policy Institute’s study suggests that the means to spreading the wealth more evenly requires labor market institutions (such as strong collective bargaining), an appropriate minimum wage, and a truly tight labor market, all of which are necessary to ensure that the benefits of growth reach everyone, not just those at the top of the wealth scale. Money rules but you can’t make money without the people on the frontline.  The people make the money.  And the people deserve their fair share.  The NBA players receiving 60% of revenue generated is a good example for all of us.

Regarding the first factor, organized labor carries some taint that I don’t understand.  Organized labor, i.e. unions, made your working life what it is.  Weekends, paid vacations and holidays, overtime, health benefits, and sick pay?  Thank the unions. 

Unionized workers make twenty-seven percent more than non-union workers.  Unionized workers are more likely to have health insurance, employer-contributed pensions and retirement plans, and paid leave than non-union workers.  And the extent to which non-union workers have any of the above is because of the threat of becoming a unionized workplace.  Unfortunately, the erosion of labor power along with people’s aversion or fear of unions contribute significantly to the reasons employees are getting played.

Recognize that employers and businesses have organized themselves.  They have lobbyists, politicians, and the media doing their bidding.  When was the last time you heard that workers need a bigger slice of the pie?  But you’ve heard all of the above, including displaced workers, trumpeting the mantra that “in order to remain competitive,” businesses must (fill-in-the-blank).  When you hear that phrase about remaining competitive, understand that in whatever follows that you get screwed. 

Regarding an appropriate minimum wage, did you know if you’re paid the new minimum wage with a family of three, you’re still at poverty level?  With or without the increased minimum wage, the average CEO salary is 262 times that of the average worker’s annual income.  Between 1992 and 2005, the median income for CEOs rose by 186%.   But we couldn’t get a measly two dollar minimum wage increase passed without a fight.  I once read that if the minimum wage kept up with the cost of living, it would be a little over nineteen dollars an hour.

Regarding tight labor markets, it goes without saying that if more people were employed in quality jobs, the economy would be better off all the way around.  Folks could afford to pay basic living expenses, buy what they need and want, pay for their kids’ education, and save money for retirement.  The fact is to the extent jobs have been created, they are mostly replacing the jobs lost to downsizing and outsourcing. 

This trend could be reversed by recognizing opportunities to give people quality jobs – jobs that would repair America.  They admit the infrastructure is crumbling.  Isn’t that an employment opportunity to put people to work repairing bridges, roads, dams, and levies?  We’re finally getting hip to eco-friendly products, solar panels, and hybrid cars.  Isn’t that an opportunity to create manufacturing jobs lost in the 90s and 00s?

We have to get out of this passive resignation.  We need a new New Deal.  FDR pulled the country out the Great Depression because of pressure from organized labor and the threat of a third political party.  We need to get organized and out of this reliance on these two political parties.  We need to hold accountable these people who have taken advantage of us.   Corporations and politicians need to feel our pain until they get us out of the pain we’re feeling.  If they want control of the steering wheel, they have to withstand the shouting when they hit the iceberg.  There’s been a collision with an iceberg.   That’s not even an issue.   The question is, are we going to work together to stay afloat?

DeAngelo Starnes is a freelance writer and attorney who resides with his wife and son in Denver, CO. He welcomes direct constructive feedback at deangelo_starnes@hotmail.com.