Summary: America has become increasingly destabilized during the few decades, as the 1% grows stronger and seizes resources to grow still stronger. This post shows them at work shifting income from workers’ wages to corporate profits. Inequality doesn’t just happen; it results from people making decisions under a specific political and social conditions. In the past we reversed this process. This ended the Gilded Age, creating a broad middle class and the society we think of as America (quite unlike the nation of the previous century). We can do so again.
Innovation of new forms of society and technology. It is the key to our progress. It has allowed us to evolve from naked hunter-gatherers to the dominant species on this planet. This process is slow, normally taking hundreds or even thousands of years. But occasionally evolution leaps forward.
— A slight tweak of Professor Xavier’s words from the title sequence of the movie “X-Men” (2000)
Homeostasis (aka negative feedback) rules “normal” life, defeating the predictions of doomsters who extrapolate current trends to collapse. Instead countervailing forces, including intelligent collective action through political, business, and social organizations, find new ways to maintain stability and growth. But sometimes we get positive feedback, when a change produces conditions that continue and accelerate the trend — and the mechanisms break that should maintain balance.
Marx saw such a process at work in 19th century industrialization. He forecast revolution for western nations as the inevitable outcome of the Gilded Age, as the flow of national income shifted from workers to those who own the means of production. He was wrong then, as — after much conflict — we found ways to more equitably distribute income without civil war. Perhaps Marx was not wrong, just early. Again we face the same challenge, as the 1% works to reshape America into a plutocracy.
During the past few years many economists confidently have predicted an acceleration in wage growth. But wage growth for most Americans (below the top quintile) remains only slightly above inflation. We see the reason every day in the news, as the 1% uses their power to boost their profits at their workers’ expense. The process accelerates as they grow stronger — and seize more — while we grow weaker.
Here are nine of our stories, stories describing the birth of a New America. Connect the dots to see the explanation of why most of the gains in America’s national income since 1980 have gone to the 1%. If continued, this trend will create a New America.
- The NYT explains the 2005 – 2009 illegal cartel suppressing wages of software engineers, run by Google, Apple, Intel and Adobe. Perhaps the most undercovered story of the decade. It would change people’s views of the tech industry, if they knew it.
- “How H-1B Visas Are Screwing Tech Workers“, Mother Jones, 22 February 2013 — Tech companies import workers to keep wages low, profits high. Also see this by Norm Matloff (Prof Computer Scince, UC-Davis).
- “Court docs show role of Pixar and Dreamworks Animation in Silicon Valley wage-fixing cartel“, Mark Ames, Pando, 7 July 2014 — Animators, too
- “Wage Theft is a Bigger Problem Than Other Theft. Not enough is done to protect workers.“, Ross Eisenbrey, Economic Policy Institute, 2 April 2014 — Stealing wages from poor workers
- “What We Learned Investigating Unpaid Internships“, Blair Hickman, ProPublica, 23 July 2014 — Summary of their year-long investigation. “Though the intern economy remains opaque, dialogue about the role of interns in the labor force – and protections they deserve – is beginning to take shape.”
- The endless series of corporations reducing benefits for employees: “Wal-Mart raises healthcare costs, cuts benefits for some part-timers“, Reuters, 7 October 2014
- Corporations not paying workers for time on the job: “Obama is siding with Amazon at the Supreme Court. It’s both illogical and inhumane.“, Scott Lemieux, The Week, 15 October 2014 — “The administration is indirectly backing the giant e-retailer in a dispute with warehouse workers”
- “Whatever Happened to Overtime?“, Nick Hanauer, Politico, 17 November 2014 — We still work long hours; we no longer get paid more for doing so. “It’s one reason we’re poorer than our parents. And Obama could fix it without Congress.”
- The conversion of academic workers from tenured professors to low-wage few (or no) benefits part-time adjunct faculty and post-graduate students. Example: the U OR fighting a strike by teaching assistants seeking sick leave.
Let’s make this more specific. More personal.
Two tragic examples of these trends at work
Journalist (Bloomberg News): Jim, you have a birthday coming up next month. … Will you be at your desk, and has the Board approved you staying on past age 65?
Jim McNerney (CEO of Boeing): Yes, the heart will still be beating. The employees will still be cowering (laughing). I’ll be working hard; there’s no end in sight. We’re continuing to build the succession plan … But there’s no discussion of it yet. So you’ll still be asking questions of me.
— From the quarterly earnings conference call with Boeing’s senior management, 10 July 2014
The key reason for our weakness, pointing the way to a better future, appears at the end of the second story. It’s so big the NYT journalist didn’t see it.
(1) Rules for the powerless will be set unfairly
“Panel Of Ivy League Graduates Determines That Wage Laborers Should Perform Required Tasks For Employers Without Compensation“, Scott Lemieux (Asst Prof Political Science, College of St Rose) and Erik Loomis (Asst Prof History, U RI) , Lawyers Guns and Money, 10 December 2014 — Excerpt:
Earlier this year, I argued that 9CA {Court of Appeals} was right to interpret the Fair Labor Standards Act as requiring employers to compensate employees for mandatory security checks. This being the Roberts Court, it took them less than two months to unanimously conclude otherwise. The Sotomayor concurrence (joined by Kagan) suggests that the Obama administration siding with the employers helped foster the unanimity, although the workers were obviously drawing dead when it comes to securing a majority.
This is a statutory interpretation case, so Congress could step in and protect the worke….sorry, probably too soon for black humor.
It’s also worth noting how pervasive this sort of unpaid labor was in the early 20th century and it’s centrality to union campaigns at that time. The Triangle workers had to go through these checks to make sure they weren’t stealing. Loggers had to walk from the logging camp to the logging site without pay. Miners had to timber their own mines so they wouldn’t collapse on them – on their own time. All of these workers fought to end these injustices through their union campaigns and union contracts.
Reinforcing the ability of employers to force workers to do things like this without pay is a real step back toward those principles of the Gilded Age. That it is a 9-0 decision really reinforces how far the ideology of employer domination over workers has come in this country and how far we have to go to turn this nation back toward one where workers and their time and their dignity is respected.
(2) Young women are a natural class to exploit
Rich NFL owners profit from cheerleaders’ work while paying them little or nothing: “Buffalo Bills Cheerleaders’ Routine: No Wages and No Respect“, NY Times, 10 December 2014 — Excerpt:
Supervisors ordered the cheerleaders, known as the Buffalo Jills, to warm up in a frigid, grubby stadium storeroom that smelled of gasoline. They demanded that cheerleaders pay $650 for uniforms. They told the cheerleaders to do jumping jacks to see if flesh jiggled.
The Jills were required to attend a golf tournament for sponsors. The high rollers paid cash — “Flips for Tips” — to watch bikini-clad cheerleaders do back flips. Afterward, the men placed bids on which women would ride around in their golf carts. The carts had no extra seats. Women clung to the back or, much more to the point, were invited to sit in the men’s laps.
For these and more humiliations, and for hundreds of hours of work and practices, Alyssa and her fellow cheerleaders on the Buffalo Jills received not a penny of wages, not from the subcontractor and certainly not from the Buffalo Bills, a team that each year makes revenue in excess of $200 million.
The National Football League, that $10 billion “nonprofit” business, is the occasionally repulsive gift that keeps on giving. An all-American empire, the N.F.L. is structured with various and many principalities and emirates, and fixers who cushion the leadership from the unsightly details of league business as usual. So owners and lobbyists handle the shakedown of cities for publicly funded stadiums; Commissioner Roger Goodell alights when a grip and grin is needed to seal the deal. Lawyers and doctors on the league’s pad handled the league’s war against payouts for concussions, which began with denial and segued into discredit, until lots of not-so-hot publicity made that unbearable.
… N.F.L.’s coyly kittenish policy requires that cheerleaders offer only their first name
… Alyssa, Maria and three other cheerleaders sued the Bills in May, alleging flagrant violations of state minimum wage laws. … The most they could hope for as cheerleaders, they said, were a few small tips and appearance fees here and there. Alyssa says she made $420 for more than 800 hours of work … “People really thought we had it good, that we were paid well and had this luxurious lifestyle … I ended up feeling like a piece of meat.”
… Alyssa recalled that team managers herded the winning cheerleaders into a darkened room to watch a slide show. They saw screen shots of their Facebook pages, obtained without their permission. … We will monitor everything you do, the women were told. The team’s contractor handed the women a contract and a personnel code, and told them to sign on the spot. The team dictated everything from the color of their hair to how they handled their menstrual cycle. “If you complained, you were told: ‘This is a privilege. Deal with it!’ ” Alyssa recalled.
Buried in the story is the key line. Political change occurs first in the minds of individuals. The current cycle began in the 1960s as conservatives slowly convinced Americans that their mechanisms of collective action — government and unions — were ineffective or illegitimate, and that only as individuals could they win. That’s the equivalent of convincing mediveal peasants in the divine right of kings. Such doctrines render a people powerless. They’re shackles of the mind.
Some other Jills, particularly alumnae, remain angry at Alyssa, Maria and the other three cheerleaders for bringing their lawsuit.
Conclusions
Unfortunately, social evolution runs backwards as well as forward. We can be passengers, whining about the result. Or we can organize, using the machinery the Founders bequeathed us. It’s all about choice. A great future awaits us, but we have to reach out and seize it.
For More Information
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About automation and wages:
- The coming big inequality. Was Marx just early?, 27 November 2012
- Krugman discovers the Robot Revolution!, 9 December 2012 — He notices that the new industrial revolution crushes wages
About wages:
- Do we have a shortage of workers, or just cheap employers? Part one of two., 8 May 2012
- Do we have a shortage of workers, or just cheap employers? Part two of two., 9 May 2012
About corporations maximizing profits, minimizing capex and wages
- The new American economy: concentrating business power to suit an unequal society, 27 April 2012
- Why America’s growth is slowing, and a solution, 28 January 2013
- Portraits of a nation in decline. An unnecessary and easily fixed decline., 14 February 2013
- Four graphs showing a nation in decline. An unnecessary and easily fixed decline., 1 November 2013
- For Thanksgiving, Walmart shows us the New America, 19 November 2013 -– Part time, no benefits, minimum wags.
- Watch corporations strip-mine their future (and ours), 18 April 2014