Labor Day a reminder of how working people are falling behind

August 31, 2014

Each year on Labor Day, I think of Myles Horton and something he once told me.

Horton started Tennessee’s Highlander Center in 1932 and spent most of his 84 years crusading for racial, environmental and economic justice. Rosa Parks called him, “the first white man I ever trusted.” He was a mentor to the Rev. Martin Luther King Jr.

During an interview in the 1980s, I asked Horton about his focus. “Working people,” he replied. “People who work for a living rather than own for a living.”

Labor Day celebrates Americans who work for a living, which is most of us. But each year there seems to be less to celebrate. Stock markets, corporate profits and executive compensation are hitting record highs. But at the other end of the spectrum, there aren’t enough good jobs for people who want to work.

There has been a lot of political talk about job creation, but a more important issue is the quality of jobs. More and more people are working hard at full-time or several part-time jobs and still can’t earn a decent living.

The Kentucky Center for Economic Policy, a non-profit think tank in Berea, issued a report last week that offers a gloomy assessment of recent trends. The full report is at Kypolicy.org, but here are some key findings:

Kentucky is experiencing job growth, but still needs 80,800 jobs to get back to the pre-recession 2007 level and accommodate population growth since then. Nearly one in four Kentucky part-time workers say they would rather have full-time jobs.

A lack of jobs has led to a decrease in the labor force as many Kentuckians have given up looking for work. One third of Kentucky’s unemployed people have been that way for a long time.

Wages are depressed by high unemployment levels. The late 1990s, when the unemployment rate was below 4 percent, was the only time in the past 35 years when Kentucky workers’ real wages actually grew.

The inflation-adjusted median wage has fallen 8 percent since 2001, and low-wage workers’ pay has fallen by 7 percent. Much of that is because higher-paying jobs that produce goods — especially in manufacturing — have been replaced by service jobs. Many service jobs pay low wages, which have been further depressed by a $7.25 hourly minimum wage that hasn’t been raised since 2009.

What are some solutions? First, the center recommends long-needed reform in Kentucky’s 1950s-era tax code to reflect the modern economy. That would provide more revenue for the state to invest in education and infrastructure, both of which would create jobs and spur economic development.

Another good idea the center recommends is raising the minimum wage. The value of the minimum wage has been eroded by inflation to the point that it is too little for an individual, much less a family, to live on.

What is especially obscene is huge, profitable corporations that pay workers so little they are eligible for public assistance. That leaves taxpayers subsidizing the profits of companies such as Wal-Mart and McDonald’s. Raising the minimum wage would save taxpayers money.

Opponents argue, as they always have, that increasing the minimum wage costs jobs and raises prices. But evidence shows those effects are minimal. A higher minimum wage, which also pushes up pay for workers just above it, puts more money in the pockets of people who will spend it, which boosts the economy.

Conservatives argue that Kentucky could spur economic growth by enacting anti-union laws and loosening environmental regulations. But that kind of growth does more harm than good. Pollution creates health problems and lowers the state’s quality of life. Anti-union laws boost business profits at the expense of workers.

Cynically named “right to work” laws make it harder for workers to organize for higher wages and better working conditions. States that enact those laws generally have lower average wages and more poor people than those that do not.

Similarly, repealing “prevailing wage” laws would make public construction projects cheaper, but only by taking money out of the pockets of the people doing the work.

It is no accident that the decline of the middle class since the 1970s has mirrored the decline of organized labor, which had a big role in creating the middle class in the first place. More and more of this nation’s wealth is rising to the top at the expense of everyone else.

Yes, we need to create more jobs. But we need to do it in ways that will improve the fortunes of people who work for a living and not just those who own for a living.

 


Inequality will keep growing as long as big money controls politics

March 24, 2014

The gap between America’s rich and poor has been growing for nearly four decades. Many people worry about what this could mean for our economy, our society — and even the survival of our republic.

This trend is a stark reversal of the four previous decades, and it has sparked a lot of populist anger, from Occupy Wall Street on the left to the Tea Party on the right.

Consider, for example, a recent study that found incomes in Kentucky rose 19.9 percent from 1979-2007, but that 48.8 percent of that money went to the top 1 percent of earners. According to the Economic Policy Institute, that 1 percent saw their incomes rise an average of 105.1 percent, while the average income of the other 99 percent of Kentuckians grew only 11.2 percent.

Democrats have made inequality and economic opportunity their main campaign theme. Republicans are talking about it, too, but offering very different solutions for rebuilding the American middle class.

“Economic and Political Inequality in the United States” is the title of a conference March 27-28 at the University of Kentucky featuring several nationally recognized speakers. The event is free and open to the public. Details at: Debrassocialstimulus.com.

The keynote speaker is Pulitzer Prize-winning columnist Ellen Goodman, whose talk is titled “Inequality: Working Moms, Designated Daughters, and the Risks of Caregiving.” She speaks at 7:30 p.m. March 27 at Memorial Hall.

The next day, beginning at 9:30 a.m. in the Student Center’s Worsham Theater, speakers include longtime UK history professor Ron Eller and economist Dean Baker, co-director of the Center for Economic and Policy research in Washington. Topics include inequality in Appalachia and how the “culture wars” have influenced these trends.

I will be interested to hear what the speakers have to say. I will be especially interested to see if they can go beyond lamenting the problems and offer solutions that could have some chance of success in America’s increasingly toxic political environment.

For most of human history, stark inequality was the rule, contributing to both the rise and fall of countless empires. This began to change in the late 1600s with the Enlightenment, which led to creation of the representative democracies now found in most developed nations.

Representative democracy led to government-regulated capitalism and a flowering of technology and prosperity that, while uneven, was far better than anything that preceded it.

In this country, coming out of the Great Depression and World War II, it led to a dramatic narrowing of the wealth gap and an accompanying rise in economic and social opportunity and mobility that made America the envy of the world.

Wealthy industrialists realized that a prosperous middle class was needed to buy the goods they manufactured. A rising tide really did lift all boats. But research shows that America now lags many other nations in economic opportunity and mobility.

The spread of capitalism has lessened inequality in much of the world, although, as Pope Francis has consistently reminded us since assuming leadership of the Roman Catholic church a year ago, not nearly as much as it should.

While the global economy has been good for some overseas workers, it has cost many American jobs. It also has created a worldwide “race to the bottom” for labor costs, while making financial elites fabulously wealthy.

The collapse of communism seemed to show that, over the long haul, capitalism works best when it goes hand-in-hand with representative democracy. Or does it? China’s economic success since the 1980s under a ruling-class dictatorship raises some troubling questions.

Those questions are even more troubling amid the rising power of big-money influence in American politics, especially since the U.S. Supreme Court’s 2010 Citizens United ruling opened the floodgates. There seems to be a new Golden Rule: those with the gold can make the rules.

While conservatives now worry about oppressive government, liberals worry about oppressive capitalism and corporate-controlled government. The rise of inequality since the 1970s has mirrored the rising clout of big business and high finance and the decline of organized labor.

Until the balance of power shifts back toward what it was a generation ago, it is hard to imagine that the balance of wealth will, either.