Wednesday, December 10, 2008

Everyone should be unionized?

In the midst of an unprecedented economic crisis, and massive unemployment I agree with the calls of some for greater unionization. It appears that Republic Window and Door workers will get what they have earned, as a result of their unionization and sit-in. This is one small demonstration of the power that exists when we, as workers, unite.

The workers are "very, very satisfied" with the agreement, said Mark Meinster of the United Electrical Workers union, which represents the employees.

"Hopefully this is an example for workers across the country that when things like this happen, you can step up, you can speak out, and you can win," he said.

The wealthy of this country have been exploiting us all for far too long, it's time that we finally start to demand some reciprocity, especially as they continue to get bailed out to the tune of trillions of dollars. Some interesting tidbits:

* from 1980 to 2004, while U.S. gross domestic product per person rose by almost two-thirds, the wages of the average worker fell after adjusting for inflation. (source)
* Over the three decades from 1972 to 2001, the wages and salaries of even those Americans at the 90th percentile (those doing better than 90 percent of their fellow citizens) experienced income gains of only 1 percent a year on average. Those at the 99.9th percentile saw their income rise by 181 percent over these years (to an income averaging almost $1.7 million). Those at the 99.99th percentile had income growth of 497 percent. (source)
* Since 1969, the share of aggregate household income controlled by the lowest income quintile (one-fifth of the population) has decreased from 4.1 percent to 3.6 percent in 1997, while the share to the highest quintile increased from 43.0 percent to 49.4 percent. Most noticeably, the share of income controlled by the top 5 percent of households has increased from 16.6 percent to 21.7 percent.


  • To compensate for this loss of purchasing power, middle-class America has been forced more and more deeply into debt (see the chart above). Consumer debt has increased, and at an ever-faster pace. In 2003, revolving consumer debt was growing at 2.9% per year. By 2007, that number had more than doubled to a growth rate of 7.4%. This debt is part of the current crisis in which we find ourselves.
  • Noam Chomsky: [It's quite a long quotation, feel free to skip this and meet me below for some more analysis. That being said, it's definitely worth reading!] That's part of the driving force. The other part of the driving force is the Washington Consensus, the neoliberal policies that for the last 25 years have been one of the most dramatic disasters in economic history. It won't come as a surprise to anyone that has studied economic history since the industrial revolution, that it is very striking that where these neoliberal policies have been pursued, particularly in South America, there has been a rapid decline in virtually all macro-economic measures: rate of growth, rate of productivity, etc. And also a rise in inequality. The same can be said of the United States, where the measures have not been applied with the rigidity of Latin America, but they have, to some extent, been applied for the last 25 years. And this has been a bleak period in US economic history. For 25 years real wages have been in decline for the majority of the population. The United States is the richest country in the world and, as you would expect, 25 years ago had the highest wages and shortest working week of any industrialized country in the world. And now that's been reversed. Now it has the lowest wages and the longest working hours of any industrialized country in the world. Salaries have remained the same, but working hours have increased, and inequality has just soared.

    Throughout the first phase of post World War II history, the 1950s trough the 1970s, we had rapid growth, but we had egalitarian growth. And it was growth of social welfare and it resulted in a rise of all the social indicators. And there was a healthy society. That changed in the period of 1970 to 1975. The social indicators began to decline and growth fell very sharply and inequality fell back to what it was in the 1920s. And for most of the working population, it is one of the worst periods in economic history. That's been mirrored throughout the world. In the regions where these policies have been pursued, there has been a very sharp decline in comparison to the previous 25 years. There has been growth and development in the international economy during that period, but the social benefits have been seen in regions where these neoliberal policies have been ignored. South East Asia has been a striking example. Now the World Bank and other institutions, have figures that try to obscure these facts by putting together things that are quite unrelated. They put together participation in trade, with adherence to the Washington Consensus. So, for example China undergoes very high growth by violating the principles of the Washington Consensus. They ignore the total picture by making the claim that China has a high growth rate and never mentioning that it's a result of violating the principles of Washington Consensus. But, if you look at the World Bank figures and take them apart, then what you find is that adhering to these neoliberal policies has been economically harmful, in a surprisingly consistent way. The truth is that violating the principles of the Washington Consensus has often been associated with very high rates of growth, but that is rarely mentioned. It is similar to the first 25 years after World War II, often referred to as the "golden age".

    But that's only part of the story: these neoliberal measures, quiet apart from economic consequences, were virtually designed as an attack on democracy. There has been a dramatic decline throughout Latin America for support of democratic systems. Not that people don't want democracy, but support has fallen for the parliamentary systems as they exist. That's been a decline that has occurred parallel to the imposition of neoliberal polices. It was in the design of these policies, at every point, to undermine democracy. For example the imposition of financial liberalization is undermining democracy by taking away the capacity of governments to control things that will have an impact on the population. They took away governments' capacity to make public policy. Neoliberal policies create a virtual parliament of investors and landlords that is not democratic and is not under the control of the population in a democratic manner. Democracy existed before the neoliberal years, in the post-war period, because capital controls could be imposed by governments. And that was a way of exercising democracy. Capital controls were imposed not just as a way of controlling capital but also to give governments space to carry out the development programs that their populations wanted. That was a way to exercise democracy. Things have change in the last 25 years, and they have not changed in a democratic way. I should say that these are staples of economic theory and economic history. They are not obscure. They are in all of the economic text books.

    The same can be said about privatization. There is no empirical evidence that privatization has any economic benefits. The evidence is just the opposite, especially with health care and social services. But privatizations do have the effect of taking decisions and control out of the public realm. It takes things out of democratic control and puts them in the control of unaccountable private entities. "Services" includes just about everything that people care about; health, resources, education and the environment, all the things that people care about. These are called "services". And then there is "trade in services", when you add on trade. This means transferring all the things in life into the hands of private enterprises. They are unaccountable and they are taking things out of the public arena. When that happens you can have a formal democracy, but there is nothing left with which to make decisions. The same runs true trough the rest of the neoliberal package. And it is all of these factors, along with the rising inequality, that is driving people to call for change.

It seems like the "little guy" gets exploited at every turn. So what can be done? Increasingly, unions are becoming an attractive alternative. Starbucks workers have even organized (by the way, they need your support). Unionization of Walmart employees is slowly moving forward. Perhaps seeing the victory of the workers of Republic Window & Door in Chicago will help more of us to realize that the poor and middle-class have much more in common with each other than we will ever have with the ultra-wealthy.

It's worth remembering that WE are the true productive members of society. You can see that in the current disconnect between the financial crisis and the conditions on Main Street. Trillions of dollars have been wiped from the financial system, but those are speculative dollars, not real ones. We are the ones that pour your coffee, we fix your heater, we work on your car. We don't depend on speculative dollars, we live on real budgets that impact our real lives. We are not the ones that get hurt when credit default swaps go bad, or Collateralized Debt Obligations are not as well collateralized as the banksters thought. At least, if things were fair, we wouldn't be. We could continue on about our life, shaking our head at the folly of it all. Instead, they still get millions in bonuses, spa vacations, and billions of dollars in bailouts, all while we get pink slips. The only way to combat this is to demand better alternatives, to demand solutions that work for more than just those at the top. The time has come to demand justice for all of us.

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