Lower expectations pave the way for more inequality

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NATIONAL — Over the past three years, state legislators across the country have launched an unprecedented series of initiatives aimed at lowering labor standards, weakening unions, and eroding workplace protections for both union and non-union workers.

Such legislation emanates not from state officials responding to local economic conditions, but from an economic and policy agenda fueled by national corporate lobbies that aim to lower wages and labor standards across the country, according to Gordon Lafer, a political economist and associate professor at the University of Oregon’s Labor Education and Research Center.

This policy agenda undercuts the ability of low- and middle-wage workers, both union and non-union, to earn a decent wage, adding to the enormous problem of wealth and income inequality in America.

When Gov. Scott Walker proposed sharply curtailing union rights in 2011, he presented his legislation as a response to the particular fiscal conditions facing Wisconsin. Gov. Chris Christie achieved very similar curtailments of public employees’ collective bargaining rights without the partisan opposition encountered by Walker, reflecting New Jersey’s political climate.

Indeed, in each state where anti-union legislation was advanced, voters typically perceived it as the product of homegrown politicians and a response to the unique conditions of their state. In fact, however, broadly similar legislation was proposed simultaneously in multiple states, whose fiscal conditions often had little in common.

New Jersey was one of 15 states that passed laws restricting public employees’ collective bargaining rights or ability to collect “fair share” dues through payroll deductions.

Collective bargaining rights were eliminated for Tennessee schoolteachers, Oklahoma municipal employees, graduate student research assistants in Michigan, and farm workers and child care providers in Maine.

Michigan and Pennsylvania both created “emergency financial managers” authorized to void union contracts.

Like New Jersey, Minnesota’s legislature voted to limit public employees’ ability to bargain over health care.

Ohio legislators adopted a law—later overturned by citizen referendum—largely imitating Wisconsin’s, prohibiting employees from bargaining over anything but wages, outlawing strikes, and doing away with the practice of binding arbitration (the only impartial means of settling a contract dispute without a right to strike) in favor of the state agencies’ right to set contract terms unilaterally.

Indiana, which had already eliminated most collective bargaining rights for state employees in 2006, adopted new legislation that prohibits even voluntary agreements with state employee unions.

The pattern of which states adopted which laws suggests that legislation was driven by politics rather than economics.

While similar laws were proposed and adopted in many states, the states that adopted these laws are not necessarily those where problems were most severe.

The most sweeping public employee pension reforms, for instance, did not occur in the states with the greatest unfunded liabilities. Wisconsin, Florida, and North Carolina all had among the best-funded and most solvent public employee pension funds at the start of 2011, yet all enacted dramatic cutbacks in pension benefits.

New Jersey enacted legislation restricting teachers’ collective bargaining rights despite the fact that Garden State students scored fourth among all states in the share of fourth- and eighth-graders performing at or above basic achievement levels in reading and math.

The state-by-state pattern of public employment cuts, pension rollbacks, and union busting makes little sense from an economic standpoint, according to Lafer, who says it becomes much more intelligible when understood as a political phenomenon.

“These historic gains (for Republicans in 2010) were part of the Tea Party–inspired “wave” election that, at the federal level, saw the GOP regain control of the U.S. House of Representatives,” said Lafer. “They also reflected the impact of unlimited corporate spending, as the Supreme Court’s Citizens United decision overturned restrictions on campaign spending at the state as well as federal levels.”

Much of the most dramatic legislation since 2011 has been concentrated in the 11 states that gave Republicans new monopoly control over their state government in November 2010, putting them in charge of both houses of the legislature as well as the governor’s office.

The attacks on labor and employment standards have been driven by a powerful coalition of anti-union ideologues, Republican operatives, and corporate lobbies. Republican strategists such as Grover Norquist have long identified public employees, labor unions, and trial lawyers as three “pillars” of the Democratic Party—unions and lawyers providing campaign funds and public employees providing the army of volunteers making phone calls and knocking on doors in support of “big-government” Democrats.

It is no accident that the hardest-fought anti-union campaigns have been waged in so-called battleground states. If Republicans cut off union funds and campaign volunteers in tossup states such as Michigan, Indiana, Pennsylvania, and Ohio, they could conceivably alter control of the federal government.

The anti-union campaigns have been primarily funded by a coalition of traditional corporate lobbies such as the Chamber of Commerce and National Association of Manufacturers, along with newer and more ideologically extreme organizations such as the Club for Growth and the Koch brothers–backed Americans for Prosperity.

As the U.S. economy has grown dramatically more unequal over the past few decades, it has produced a critical mass of extremely wealthy executives, many of whom are politically conservative.

At the same time, elections for public office have become more expensive than ever, leaving politicians increasingly dependent on those with the resources to fund campaigns.

Finally, the Citizens United decision abolished longstanding restrictions on corporate political spending. In this way, the dramatically unequal distribution of wealth has translated into similarly outsized political influence for those at the top.

Perhaps the most important organization facilitating the work of this coalition is the American Legislative Exchange Council (ALEC). ALEC is a national nonprofit charity organization that brings state legislators together with the country’s largest corporations—including Wal-Mart Stores Inc., The Coca-Cola Company, FedEx, Amway, Exxon Mobil Corp., Koch Industries Inc., and leading tobacco and pharmaceutical firms — to formulate and promote business-friendly legislation.

Virtually all of the initiatives reshaping the fundamental balance of power between workers and employers —including forced privatization, “right to work,” and abolishing minimum-wage and prevailing-wage laws — reflect model statutes developed by ALEC and promoted through its network.

In 2011, ALEC’s influence was the subject of criticism among media outlets and political opponents who claimed it was secretly subverting democratic institutions to further the aims of its corporate benefactors at taxpayer expense. 

The disconnect between union-busting and fiscal necessity are clearly part of a broader strategy to undermine public employee unions and diminish services that benefit working families, children and seniors.

Camden — one of the most dangerous cities in the country with the second-largest police force in southern New Jersey — laid off half its 460 officers before transferring responsibility for municipal law enforcement to the county on May 1, 2013.

Yet even in the face of such drastic cuts, lawmakers often treated retrenchment not as an undesirable, temporary necessity, but rather as an opportunity to make what they perceived as overdue cuts.
Nationally, 70 percent of all school districts made cuts to essential services and many states refused to accept new federal health care funds made available under Obamacare.

None of the 50 states seriously explored the road to fiscal balance that could have erased deficits entirely through two simple policy changes: effectively undoing the Bush tax cuts for the top two percent of income earners by imposing an equivalent state level income tax, and taxing capital gains at the same rate as ordinary income.

Four times, Gov. Christie vetoed attempts to legislate such a ‘millionaire’s tax’ in New Jersey, but like many legislatures across the nation, he enacted new tax giveaways to corporations and the wealthy while simultaneously slashing funding for schools, libraries, and health care.

Twelve different states that enacted dramatic service cuts in 2011 also provided large new tax cuts.

Proponents of the estate tax argue that it is a rational point of taxation, with major benefits compared to other types of taxes such as income taxes, wealth taxes, property taxes, sales taxes, or business taxes. The estate tax only applies to inheritance over five million dollars.

“Capitalism is about competition,” says David Hamilton. “If one person starts with a billion dollars, and another works for six dollars an hour… that’s not a competition.”

“If we scrap the estate tax we will encourage aristocracy and the formation of a society where it’s normal for children to depend on their parents for almost their entire lives, eroding social mobility, trapping poor kids and orphans into poverty and inflating the debt bubble,” says John Smith, another critic of Republican economic policies.

In state after state, the same corporate lobbies that have played leading roles in fighting public employee unions have also launched equally vigorous attacks against the union rights of private-sector workers—an issue utterly unrelated to budget deficits or the size of government.

Orwellian-named “right to work” laws do not guarantee anyone a job. Rather, they make it illegal for a union to require that employees who benefit from a collective contract contribute their fair share of the costs of administering that contract. By weakening unions’ ability to sustain themselves financially, such laws aim to undermine the bargaining power of organized workers, and ultimately to drive private-sector unions out of existence.

With a few narrow exceptions—such as transportation infrastructure and public safety spending in some jurisdictions—the corporate lobbies have pursued an agenda that shrinks vital public services, including education, health care, libraries, recreation, parks, communications, and others.

Corporate lobbyists are seeking to engineer what might be termed a “revolution of falling expectations” among the public—with the elimination of public services being part of that.

If people no longer feel that — simply by virtue of being American citizens — they have a right to a decent education for their kids, a right to low-cost transportation to and from work, a right to check out books for free from a neighborhood library, a right to affordable tuition for college-aged kids and affordable health care for aging parents, or a right to retire after a lifetime of work with some modicum of security, the population may become less demanding of either employers or the government, and more accepting of the type of downward mobility that is likely to result from the dismantling of labor standards.

The record of corporate-backed legislation suggests that the corporate lobbies’ political strategy may include this goal—tamping down the expectations and limiting the institutional capacity of working people—rather than simply tax cutting or fiscal conservatism.

 

 

 

 

 


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