AFL-CIO On Cheap Labor

[dragons5]

http://www.aflcio.org/mediacenter/speak ... _levin.cfm

The middle class is fading fast. Stagnant wages, rising costs for life’s essentials and massive debt are taking their toll. What can we do to reverse this trend before it is too late? We must recognize that cheap labor can build cars and appliances, but only organized labor can build a middle class.



While the middle class struggles, the country’s wealthiest people are riding the stock market gravy train. Much of my economic work in the past several years has been with farming. Farmers have a better word for those who make money because of what they own instead of what they do. They are called landlords. Landlords, like corporate shareholders, simply sit back and take part of what others have earned.



What many politicians hail as the “ownership society” is really a landlord society. It is one in which money that could be used to reward labor gets skimmed off by a fortunate few. This repackaging of our old friend, trickle-down economics, is downright dangerous.

All strategies that trade good jobs for cheap toasters eventually erode the market for the goods and services being provided. A society composed of a handful of hyper-wealthy individuals and millions of people living on the economic edge is not the sound, stable market needed for growth. Only a middle class with a widely distributed buying power can provide that. What economists call the “income distribution” in this country is, from a middle-class perspective, as bad as it has been since the years leading up to the Great Depression.

The ideology of ownership would have us believe that the rich getting richer is just how things work in our economic system. The less we tamper with the way profits are distributed among owners and workers, the better off we all will be. The problem is, of course, that the rich and powerful monkey with the system all the time, and always to their benefit at the expense of the middle class.

Corporations are now strong enough to call for, and get, substantial tax reductions. They can call for, and get, substantial wage concessions. They can call for, and get, weakened public oversight of their activities. These changes, which have permitted and fostered the growth of corporations and globalization, are not the result of clever ideas and theories. They result from the exercise of power.

And that, in a nutshell, is the problem. Once corporations pay all their expenses, anything left over must be distributed between labor and owners. When labor has power, wages grow, and with them, the middle class. When owners have power, we move toward a society of rich and poor without much in the middle.

A farmer I have worked with over the years put it this way: When you sit down to dinner with a group of hungry people, it’s not only the size of the pie that matters. The size of your fork is just as important.

Because of its generous share of natural resources, and centuries of public action to build roads, schools and the like, the United States is a wealthy nation. During the mid-twentieth century, there were two principal methods for making sure this wealth was distributed such that it would do the most to maintain and build the nation’s wealth.

First, the very wealthy were heavily taxed, either directly or through their corporations. This provided for maintenance of existing social investments and creation of new ones. Our system of public education and research, for example, was well supported by tax dollars.

Second, labor unions became strong enough to shift corporate profits from very wealthy owners to the middle class, in the form of better wages and benefits. Money stayed in the hands of those most likely to spend it in ways that would further stimulate the national economy and provide essential public services.

In a few short decades, globalization has raised the specter of moving all of this wealth into the hands of a very few. In so doing, it will destroy the very process that created and maintained our wealth in the first place. Rebuilding the middle class, therefore, will not be a search for new economic ideas. It will instead be a process of changing the balance of power in ways that favor those of us who are not corporate landlords.

Politicians can, and should, put the middle class front and center in their economic thinking. But that alone won’t do the job. The job of building and maintaining the middle class is, like always, a union job.

Richard A. Levins is Professor Emeritus of Applied Economics at the University of Minnesota. His most recent book, Middle Class * Union Made, is available from Itasca Books at 800-901-3480.

[sippy]

In a few short decades, globalization has raised the specter of moving all of this wealth into the hands of a very few. In so doing, it will destroy the very process that created and maintained our wealth in the first place. Rebuilding the middle class, therefore, will not be a search for new economic ideas. It will instead be a process of changing the balance of power in ways that favor those of us who are not corporate landlords.

Its sad that we may be about to repeat history. More specifically, the fall of the Roman Empire by the barbarians.

As we all know, history is full of power and money hungry leaders who will always thirst for more, no matter how much they acrue, and their greed never satisfied. The north american union is just another form of this event taking place right under our noses.
I cannot even imagine what it would be like to not have an America anymore.