From Bad Jobs to Good Jobs

Sunday, 05 May 2013| By Colin Gordon, Dissent

What happened to the good jobs? This is the question posed by fast-food workers who walked out in New York and Chicago in recent weeks. It is the question posed by activists in those corners of the economy—including restaurants and domestic work and guest work—where the light of state and federal labor standards barely penetrates. And it is the question posed (albeit from a different set of expectations) by recent college graduates for whom low wages and dim prospects are the dreary norm.

There is no shortage of suspects for this sorry state of affairs. The stark decline of organized labor, now reaching less than 7 percent of private-sector workers, has dramatically undermined the bargaining power and real wages of workers. The erosion of the minimum wage, with meager increases overmatched by inflationary losses, has left the labor market without a stable floor. And an increasingly expansive financial sector has displaced real wages and salaries with speculative rent-seeking.

New work by John Schmitt and Janelle Jones at the Center for Economic and Policy Research recasts this question, posing it not as a causal riddle but as a political challenge: what would it take to get good jobs back?

Schmitt and Jones start with a basic distinction between good jobs (those that pay $19 an hour or better and offer both job-based health coverage and some retirement coverage) and bad jobs (those that meet none of these criteria). Each of these categories accounts for about a quarter of the workforce (the rest fall somewhere in between), with the share of good jobs slipping since 1979 and the share of bad jobs creeping up. The goal, by simulating the impact of different policy interventions, is to increase the share of good jobs and to eliminate—as much as possible—the bad jobs entirely.

Some policies—however salutary—would have little impact on this “good job-bad job” distribution. Raising the minimum wage, for example, would boost the earnings of 30 million workers, but it would do so by transforming bad jobs into not-quite-so-bad jobs. A worker earning $10 an hour without benefits, after all, is still pretty far removed from a good job.

The graphic below summarizes the findings of Schmitt and Jones, for men and women, for five policy changes. Gender pay equity, not surprisingly, would yield some small gains for women—a slightly higher percentage of good jobs, and slightly lower percentage of bad jobs. A 25 percent increase in college attainment yields only a modest improvement, a finding consistent with other research suggesting that wages are falling despite increasing educational attainment and not because there is some “skills” mismatch between available workers and available jobs.

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There is a stronger payoff for collective bargaining, which Schmitt and Jones simulate with an increase in union density sufficient to capture the same number workers as the increase in college attainment (in the first scenario, 8.7 percent of the workforce are given college diplomas; in the second, 8.7 percent of the workforce are given union cards). This yields not only a union wage premium but higher rates of job-based health and pension coverage. But the payoff is not as big as one might expect, probably because labor’s ability to deliver such benefits to its members has fallen as its share of the workforce has gone down. Simply bumping up the union density rate, in other words, is not the same thing as reclaiming the labor movement of past generations. The strongest payoff comes with socializing and universalizing health and retirement coverage. Adopting either would erase the bad jobs entirely. Adopting both would push the share of good jobs to nearly half (50 percent for men, 39 percent for women). This resonates with our understanding of the perverse logic of job-based social policy—which tends to widen inequalities (good jobs, after all, are the ones with good benefits) rather than close them. It resonates with our understanding of the broader benefits of universal social policy—which wipes away not only the waste and stigma associated with risk-rating and means-testing, but the crushing insecurity of going uncovered or uninsured. And it resonates with our political and economic realities, in which incremental progress on social policy (maybe just in the states) seems more likely than a surge in labor organization and more resourceful than deep personal investments in education.

The Poor Will Be the First Over the Fiscal Cliff

Bryce Covert on November 14, 2012 - The Nation

 

The fiscal cliff may not be a real cliff, but jumping off it could be a catastrophe for the poor.

Absent action from Congress and President Obama, come January 1, 2013, the Bush tax cuts, Obama’s payroll tax cut and extended unemployment insurance expire just as spending cuts from the sequester kick in. (To recap, in order to get Congress to lift the debt ceiling last year, President Obama formed a Congressional committee that was supposed to recommend ways to cut $1.5 trillion from the deficit. If it failed, “sequestration” would kick in—$1 trillion in automatic spending cuts split evenly between defense and non-defense spending, with Social Security, Medicaid and Medicare mostly protected, coinciding perfectly with the other expirations on January 1. The committee never came through, so now we’re facing down the cuts.)

It’s not a pretty picture, although some have found silver linings. My Roosevelt Institute colleague Mark Schmitt is hopeful that real tax reform waits on the other side of the big leap.

Jonathan Chait argues that the impact will be gradual enough that Obama can delay or cancel out most of it. Some Democrats, including Representative Peter Welch of Vermont and Howard Dean, think it’s worth going over the cliff in order to force Congress’s hand in getting the budgetary house in order.

These are all potential upsides of going over the fiscal cliff, but the downside for the country’s poorest would likely be very harsh. First, the budget cuts from sequestration will hit the poor incredibly hard—even if they will not represent a majority of the revenue raised. The term “non-defense discretionary spending” will warm few cockles of the heart. But it’s an incredibly important portion of the budget. Ethan Pollack of the Economic Policy Institute broke it down in the graph below:

As you can see, this money represents public investment: in education, transportation, children’s health, etc. And many of these programs directly impact the poor. Housing assistance, child care and education, nutrition assistance, home heating assistance and income security for the blind, disabled and aged all together make up 17 percent of this spending—more than the largest category in that chart. This money goes to job training, Title X family planning services and Head Start, among other things. It’s anything but discretionary for those who rely on these critical programs.

And they’ll get pummeled by these automatic cuts. According to a letter from the Obama administration released in July, the cuts will mean nearly 100,000 children losing Head Start services and the elimination of child care assistance for 80,000 others, for starters. That’s a lot of pain and suffering on the other side of the cliff.

But the impact on the poor doesn’t stop there. They’ll also be hurt by the tax cuts that are set to expire at the same time. Overall, the loss of the Bush tax cuts for income, capital gains and the estate tax will hit rich people harder, as the top 20 percent would see their effective tax rate increase an average 5.8 percentage points, while the bottom 20 percent would see an increase of only 3.7 points. But the Child Tax Credit and Earned Income Tax Credit, credits aimed at low- and moderate-income Americans, were expanded under the 2009 stimulus, with the former aimed in particular at low-income families. Those expansions will expire, too, if we tumble over the cliff.

This all means that while the richest will experience a larger increase in rates, the poor will actually feel the biggest hit to their bottom lines. The bottom 20 percent of Americans will see their taxes go up by an average of $209, reducing their after-tax income by nearly 2 percent. The top 40 percent, however, will only see their after-tax income dinged by .1 percent. That’s a lot of money to come from those already struggling to make ends meet.

There’s another group of vulnerable people who get smacked as well: the unemployed. As the recession began in June of 2008, President Bush signed into law the Emergency Unemployment Compensation program, which has since been reauthorized ten times. The National Employment Law Project reports that the unemployment rate is more than 40 percent higher now than when it was first enacted, and the percentage of the unemployed who have been out of work for more than six months has jumped by over 20 points. If Congress doesn’t reauthorize the EUC and the extended benefits expire along with everything else, 2 million workers currently collecting federal benefits will be cut off immediately and a million more will run out of state benefits by the end of the first quarter in 2013. That’s an actual cliff, not a gradual slope.

If a “grand bargain” is reached to avert some of this chaos that includes cuts to the social safety net, including the entitlements that are currently protected from the sequestration, poor people will of course still get hit hard. So that’s even more reason to favor solutions such as raising taxes on high income so that we can do what Katrina vanden Heuvel suggests will put us on a sustainable path: invest in our country. Revive manufacturing and lead in green jobs, invest in public education and affordable college and reign in Wall Street and CEOs’ excesses. It’s what voters want—they didn’t side with austerity to fix our problems. And it’s certainly what the poorest and most vulnerable among us need.

The War on Labor

Right to Work
by JACK RANDOM

“When you are approaching poverty, you make one discovery which outweighs some of the others.  You discover boredom and mean complications and the beginnings of hunger, but you also discover the great redeeming feature of poverty: the fact that it annihilates the future.  Within certain limits, it is actually true that the less money you have, the less you worry.” ~ George Orwell, Down and Out in London and Paris

As a fan of George Orwell I have grown to wonder if too many of our political geniuses misinterpreted his classic work 1984 as a how-to book on controlling the masses. Had they read his earlier autobiographical work Down and Out in London and Paris, they would have understood that Orwell was a man of the people and his sympathy was planted firmly with the poor, the outcast and the working class.

Of all the Orwellian phrases in common use these days one of the most egregious is the Right to Work. Adopted in twenty-three states, right-to-work laws effectively ban labor unions by prohibiting workers from gaining union representation by a majority vote. The Right to Work is the right of a worker to refuse to pay union dues. Because unions gain power by representing workers as a united front in negotiations with management, right-to-work laws negate that power.

As a result of these union-busting laws, unions have ceased to function and workers earn less. The average worker in a right-to-work state earns anywhere from $1,500 to $5,000 less per year than workers in other states. They receive less in health benefits, less in pension benefits and less protection from unsafe conditions or unfair dismissal.

Studies have been inconclusive on the decline of union representation as a result of right-to-work laws because unions must already have declined in order for such laws to be adopted. The law therefore serves as a substantial roadblock to rebuilding a union movement.

The war on labor does not end with Right to Work. Having decimated labor in the private sector (as of January 2011, according to Bureau of Labor Statistics, the number of union workers in the private sector fell to a 100-plus-year low of 6.9 percent), anti-labor forces have taken aim at the public sector. The tactic of choice against police, firefighters, teachers and other government employees is attacking the right to collective bargaining and binding arbitration.

To fully comprehend this attack, you need to understand that government employees are often prohibited by law from striking to achieve fair treatment in negotiations with their employers. In those cases where it is legal to strike, conscientious employees are loath to do so because of the harm it would do to students and communities. Binding arbitration by an impartial body is an alternative to the strike.

When you take away the right to fair arbitration, you leave workers at the mercy of their employers and you cut the union off at its knees.

These same politicians who yearn for yesteryear when the middle class was strong and the American dream of upward mobility was still alive, neglect to tell you that those were the days when unions were on the rise.

The peak rate of union workers in this nation was the mid 1950’s. After the experience of the Great Depression and the Second World War, Americans understood that if workers were to achieve financial security they needed representation to counter the power of corporations and bankers. Combined with the GI Bill, enabling veterans to gain a college education, the union movement more than any other single phenomenon created the working middle class.

The statistics are staggering. From a high of 35% of workers represented by a union to a low of 11.9 % today, if you wonder why wages have stagnated while corporate profits have exploded, look no further.

Both of the key strategies in the war on labor operate on the same principle: divide and conquer.

The right-to-work laws divide the workforce into those who support the union, who feel a sense of responsibility to fellow workers, who recognize the need for unity in representation against the powerful, against those who will not sacrifice a red penny of their paycheck for the common good.

The assault on collective bargaining is an attempt to divide private workers, who have already lost their union rights, against public workers, who earn more and claim greater benefits because they have retained union representation.

We are all in this fight together. If we wish to push back the most powerful force the world has ever encountered, corporate greed, we must unite against the tide. The right to organize the workplace, the right to unionize, must be fought for and defended.

We are under siege. We are the victims of a devastating fifty-year war against workers that is relentless and without mercy. The corporations have taken control of our government with unlimited sponsorship of elected officials. They have moved our industries to China, Malaysia, Indonesia and elsewhere, without any concern for the welfare of our nation or its people. They have outsourced our technology service, drafting and infrastructure planning jobs to India. They have reduced their share of tax responsibility to a minimum with offshore accounts and favorable legislation, forcing a beleaguered workforce to pick up the tab. And they have done all this with a sense of entitlement.

We are just beginning to fight back. We are beginning to understand that if we speak out in one voice, the 99 against the one, our politicians will begin to listen. We are beginning to understand that fighting for labor rights overseas will bring the jobs that are rightfully ours back home.

China does not own America.

The low point in this war on labor was in 2010 when the anti-labor forces took control of our legislatures but they overplayed their hand. In 2012 we must take back control and reverse the course of the nation.

The corporations do not own us.

The first part of the labor agenda must be to strike down right-to-work laws in the 23 states that now embrace them. The most efficient means is a federal law affirming the principle of majority rule as fundamental to the rights of labor. Barring that, states that uphold the rights of labor should establish a policy of preference to those states that do the same. Right-to-work states should be held to account. States that fail to acknowledge the basic right to organize the workplace should pay a price.

The second part of the labor agenda should be an affirmation of the right to collective bargaining and binding arbitration as an alternative to the general strike. Again, federal law is the most efficient means to this end but state alternatives should serve to provide motivation should the federal government fail.

The corporations that have taken control of our government will cry foul. They will accuse us of class warfare to which we will reply: yes, but now we are fighting back.

Lockouts: The Empire Strikes Back

Tuesday, February 14, 2012 by Common Dreams
by David Macaray

If you’re looking for evidence of just how confident, militant, and insufferably arrogant companies have become in recent years, look no further than the phenomenon of the lockout. A lockout is where a company closes its doors, refusing to allow its union employees to return to work until they accede to company demands—demands that typically call for staggering cuts in wages and benefits.

Unlike strikes—which, as the ultimate manifestation of employee dissatisfaction with management, are a universally recognized form of protest—lockouts are a form of extortion. A lockout represents an unambiguous threat, an ultimatum. Management figuratively places a gun to the employees’ heads and says, Take it or leave it.

There was a time not long ago when strikes were a regular part of the American economic landscape, and when, conversely, lockouts were about as scarce as hen’s teeth. In fact, lockouts were practically unheard of. But given that the business world has been recalibrated—and given the availability of replacement workers, part-timers and temps, coupled with the weakening of state and federal labor laws—strikes are now relatively uncommon, and, in a reversal, lockouts have become management’s new weapon of choice.

One of the uglier incidents occurred recently at Caterpillars’ London, Ontario, facility. After the membership refused company demands that they accept a whopping 55-percent wage cut, plus the elimination of the pension plan (along with other take-aways), the plant’s 465 production workers were abruptly locked out. No further negotiating, no compromises, no mediation; the company went directly to lockout mode. Then, after a 6-week lockout, Caterpillar announced it was shutting the plant down for good, and that everyone had lost their jobs. That’s what we politely meant by businesses “recalibrating.”

Strikes have always had a distinctly schizoid nature, being both dreaded and embraced, glorified and vilified Traditionally, when workers in a viable facility (i.e., one making a healthy profit) reached the point in contract negotiations where the company refused to budge, they hit the bricks. They shut the place down, walked off the job, thereby depriving the company of the ability to make a profit, and, very importantly, sacrificing their own economic well-being by no longer earning a wage or receiving benefits.

Because the stakes are so high, strikes have always been rightly regarded as spooky, monumental undertakings. While some strikes have been successful, many—perhaps most—have not. But successful or not, strikes need to be recognized as labor’s only real weapon. Depriving management of the opportunity to make money is the only bullet in the chamber; everything else is theatrics. Other than striking, what’s a union going to do to get the management’s attention—threaten to stand on the front lawn and scream insults through a megaphone?

Here’s a true story. In 1983 I was part of a union negotiating team that called a strike against a major manufacturing company, an action that put more than 700 men and women out on the street. It was a chaotic scene. Even though we got a 96-percent strike authorization vote prior to the shutdown, once the real thing happened, and the hammer dropped, people were understandably frightened and anxious. The strike lasted 57 days.

Looking to nip any problems in the bud, we immediately contacted the company’s HR rep and made clear our views regarding people crossing the picket line. Although we were a tight local, and didn’t anticipate scabs, you never know what people will do in a crisis. We told the company that if they allowed scabs to cross, we would be forced to retaliate by taking out full-page ads in local newspapers, exposing the company’s greed and stubbornness, and calling them bad names.

They didn’t take our peremptory salvo well. The strike was barely four hours old, and tensions were already running high. They told us to shut up, mind our own business, and not presume to lecture them on how to run their operation. But they also informed us that they had no intention of allowing people to cross over, believing that allowing people to cross would create more problems than it solved. We believed them.

But within a week or two, a handful of our guys tried to do just that. They approached at night (it was a 24-hour operation) hoping they wouldn’t be observed, and asked to be put to work. When the company refused, it occurred to them that being denied entry might very well constitute a “lockout.” While it was a known fact that strikers weren’t entitled to unemployment benefits, wouldn’t “locked-out” employees be eligible?

They went down to the unemployment office and made their case. They told the duty officer that even though their union had called a strike, they themselves wished to continue working, but the company wouldn’t let them. “Doesn’t that mean that this is a lockout and not a strike?” they asked eagerly. The duty officer seemed puzzled. She thought about it a moment and answered: “What’s a lockout?”

US Congress Seeks to Cut Food Stamp Program

Thursday, November 24, 2011 by Al Jazeera English

Problems for poor to intensify if food-stamps program that assists 45 million people gets reduced.

Advocates for the poor and often hungry in the US say that problems for the nation's needy could intensify if the agriculture department bows to pressure from congress to reduce food-assistance schemes.

Politicians are looking at ways to stimulate the economy and balance the federal budget with a proposed $4.2bn cut in its food-stamps program that currently assists 45 million people.

According to a recent US government report, some 15% of Americans are relying on food stamps. That is a 50 per cent jump from last year at a cost of $65bn per year.

Al Jazeera's Kristen Saloomey reports from New York.

Young Jobseekers Told to Work Without Pay or Lose Unemployment Benefits

(They'll do the same thing here soon enough.--jef)

Wednesday, November 16, 2011 by The Guardian/UK
People taking up work experience places – providing up to 30 hours a week of unpaid labour – face losing benefits if they quit

by Shiv Malik 

 

Britain's young unemployed are being sent to work for supermarkets and budget stores for up to two months for no pay and no guarantee of a job, the Guardian can reveal.

Under the government's work experience programme young jobseekers are exempted from national minimum wage laws for up to eight weeks and are being offered placements in Tesco, Poundland, Argos, Sainsbury's and a multitude of other big name businesses.

The Department for Work and Pensions says that if jobseekers "express an interest" in an offer of work experience they must continue to work without pay, after a one-week cooling-off period, or face having their benefits docked.

Young people have told the Guardian that they are doing up to 30 hours a week of unpaid labour and have to be available from 9am to 10pm.

In three such cases jobseekers also claim they were not told about the week's cooling-off period, and that once they showed a willingness to take part in the scheme they were told by their case manager they would be stripped of their £53 a week jobseekers allowance (JSA) if they backed out.

Twenty-two-year-old Cait Reilly is currently completing three weeks at Poundland, working five hours a day.

Last week, Reilly, who graduated last year with a BSc in geology from Birmingham University, found herself with five other JSA claimants stacking and cleaning shelves at Poundland in south Birmingham.

Reilly says there are around 15 other staff at the store but unlike them she will receive no remuneration for her work.

"It seems we're being used as some free labour especially in the runup to Christmas," she said.

Reilly says she told her local jobcentre in King's Heath, Birmingham, that she did not need the experience in the store as she had done plenty of prior retail work.

Despite DWP rules, Reilly says she was told by the jobcentre she would lose her benefits if she didn't take the Poundland placement. The DWP says jobseekers should be told about the cooling-off period but was unable to comment on individual cases without being given personal details.

"I was told [the work experience placement] was mandatory after I'd attended the [retail] open day," said Reilly.

She said she felt she had to do it because, "without my JSA, I would literally have nothing".

The work experience programme, which is separate from a multitude of other programmes designed to get people back into work, was advertised in January as voluntary after the time spent volunteering was increased from two to eight weeks.

However, the DWP has clarified that there is a clause which allows jobcentre case workers around the country to force the unemployed into placements.

The DWP say that once people "express an interest" including verbal consent, in doing work experience they will lose their JSA if they pull out after the first week.

One big superstore told the Guardian it thought the entire scheme was voluntary and that people could pull out whenever they wanted without fear of penalty.

Under the scheme, there is no guarantee of a job, only an interview. Multiple jobseekers can work in one store at the same time, cleaning or stacking shelves and competing against each other for a potential paid work on offer.

The DWP has no overall figure for the numbers involved in the scheme so it is not known how many hundreds or thousands of young people are working without pay for months.

But including similar schemes such as "mandatory work activity", sector-based work academies and the work programme, which is mainly run by private companies, the government expect hundreds of thousands of young people to do weeks of unpaid, and forced work experience for big companies.

Figures released on Wednesday reveal that youth unemployment stands at 1.016 million.
As part of her placement Reilly has been given training at another company, which will gives her a City and Guilds qualification in retail.

The DWP says Reilly is likely not to be on the work experience scheme but on another placement called a sector-based work academy, which was announced this October.

The scheme is different from straight work experience in that it has a defined training element, but Reilly says that it was only ever told that she was doing work experience and that her work at King's Heath branch of Poundland has been very unstructured.

"No one really knew what we were supposed to be doing. We were just put on the shop floor and told to tidy shelves," she said.James Rayburn has just spent seven weeks working for Tesco doing, he says, the same work as other paid employees.

He said he had gone to the jobcentre to help him find employment, and the manager there told him that Tesco was looking for staff. "I thought, that's quite handy because I knew a friend who used to work there and it sounds like quiet good fun."

Like Reilly, 21-year-old Rayburn said that he had little instruction from the store in Warfield, Berkshire.

"I didn't actually have much support …They were getting on with their own jobs … they left me to it," he said. "They said, 'Good work today, Joe'. That was it, everyday."

Rayburn, who was also told by his jobcentre he would lose his benefits if he did not work without pay, said he spent almost two months stacking and cleaning shelves and doing night shifts on occasion.

"They said [my JSA] would be cut off if I didn't do it."

Asked if he thought he should have been paid he said: "I reckon they should have paid me … I was basically doing what a normal member of staff does for Tesco. I had the uniform and I was in the staff canteen. I obviously got access to the food and drinks in the staff canteen … that's what they let you do … but I got nothing else apart from that.

"I was there doing it as if I walked into the store and said, 'Look I'll help.'"

In April, Tesco filed pre-tax profits of £3.5bn.

Like Reilly, Rayburn was not told that he had a week to refuse the placement, and was working in Tesco with two other young unemployed people who did get a job at the end of their placement.

Other large stores including Sainsbury's, Argos and Asda have been confirmed as taking on work experience placements.

Tesco said that in the last two months 150 people had carried out placements at their store. However, Tesco told the Guardian it was under the impression that work experience placements were totally voluntary.

It said they would not be taking on placements during Christmas adding: "These placements are not a substitute for full-time employees."

Poundland also confirmed the practice but said it didn't have exact numbers.

Sainsbury's said: "Following an approach from their local Jobcentre Plus and in the belief that they were doing the right thing, a small number of stores have recruited colleagues under this new initiative.

"We have since reminded our stores that they must continue our normal work placement policy, which means they will take on candidates only when there is a chance of a permanent role at the end of the placement."

Employment minister Chris Grayling has defended the scheme, saying: "Our work experience scheme is proving to be a big success with over half of young people leaving benefits after they have completed their placement. It is not mandatory but once someone agrees to take part we expect them to turn up or they will have their benefits stopped.

"Work experience will give young people a real taste of the work environment and act as a stepping stone into a career. And it's working.

"Jobcentre Plus is working with major multinationals and smaller businesses to offer thousands of opportunities for young people so that they can start to get on the job experience whilst enabling them to keep their benefits."

How Far We’ve Fallen

The Deadly Two-Tier Matrix

by DAVID MACARAY

 

How many stockbrokers, lawyers, bankers, accountants, aluminum siding salesmen, rodeo clowns, etc, would turn down a big, fat pay raise if it came with strings attached?  What if accepting that pay raise was contingent upon all future new-hires being denied the opportunity to earn those same wages?  Would they make a personal sacrifice for these future employees—reject a pay raise as a matter of principle—or would they take the money and never give it a second thought?  My guess is that most would accept the money.

And yet we hear the pejorative term “sell-out” applied to union negotiators who agree to two-tier structures.  Under a two-tier wage/benefit schedule, new-hires can never receive the same compensation as those employees already on the payroll.  We hear “sell-out” applied to the UAW.  And, unfortunately, we hear it applied with little or no understanding of how ferociously the union resisted it, or how forcefully the two-tier configuration was crammed down their throats.

Look at the record.  First of all, no one but organized labor categorically opposes the two-tier system.  That’s because no one but organized labor has the ideological and institutional solidarity to generate that opposition.  Second, the record will show that many union locals have risked their own economic well-being by designating the two-tier as a “strike issue.”  And third, even a cursory look at the history of collective bargaining will show that those unions who’ve accepted two-tier arrangements have been dragged to that decision, pissing and moaning, kicking and screaming.

I’ve sat at the bargaining table when the two-tier was broached.  It’s an insidious negotiating device.  To begin with, the company comes at you with a steamroller.  They paint a dreadful economic picture, one colored with dire scenarios of massive takeaways, lay-offs, even plant closures.  In the case of the UAW, the companies’ woes were already public knowledge.  Everyone knew Detroit was getting creamed by Japan, and that the UAW had lost over a million members, reducing it to a shell of its former self.

Management tells you that they’re sinking, that they need help, that they need a lifeline.  It’s terrible news.  The picture is dark; prospects are dark; the meeting room itself seems to grow palpably darker.  Then, suddenly, a ray of light….when they announce that there’s a way out of this mess, a way that won’t require paycuts, or furloughs, or layoffs, or increased medical premiums.

If the union will allow the company to low-ball all future employees, the company will promise not to penalize any existing employees.  Simple as that.  Everyone not only gets to keep all the goodies they currently have, but there might even be a modest pay raise in the piece.  All they have to do is allow the company to change the way they compensate new-hires.  But the company also somberly warns the union:  If we reject this two-tier proposal, those necessary cost savings will have to come out of our own hide.

When we present our standard objections—that these draconian steps aren’t necessary, that they aren’t fair, that they’re un-American, that they’ll be resented and despised, etc.—the company reminds us that no one presently on the payroll, not one single person, will be affected by this arrangement, that it only applies to hypothetical workers, to fictional workers, to workers who don’t technically even “exist.”

They make it sound eminently reasonable.  For example, if any potential new-hire examines the contract and doesn’t like what he sees in the two-tier arrangement, he’s free to walk away and find work elsewhere.  No one’s going to be forced to do anything that doesn’t make absolute sense to them.  In other words, it’s your classic win-win situation.

But make no mistake.  By acknowledging that the beleaguered UAW had its back against the wall, we’re not suggesting the two-tier is defensible, because it’s not.  Indeed, it’s unfair, it’s extortionate, it kills morale, it erodes solidarity, and, ultimately, it betrays you, because even after you agree to it (against your better judgment), the company continues to chip away at your wages and benefits—as if you never agreed to anything.

The two-tier is an abomination.  The problem isn’t how to identify it;  the problem is how to stop it from finding its way into a union contract.

The job declension that exists today resembles something like this (listed in declining order):

Full-time, fully paid and fully benefited workers
Two-tier workers (lesser pay, lesser benefits)
Perma-temps (sufficient hours, no benefits)
Temps (spotty work, no benefits)
Undocumented workers (less than federal min. wage, no benefits, victimization)
Part-time workers (supplemental income, no bennies)
Day-laborers (low pay, no bennies, no guaranteed work)
Panhandlers

Clearly, those who have it best are the men and women employed in full-time jobs at decent pay with good benefits (e.g., union workers in a big-time manufacturing plant).  Correspondingly, those who have it the worst are the guys, usually Spanish-speakers, who hang out at Home Depot looking for pick-up jobs.

That top category, where people make decent wages and enjoyed good benefits, used to be considered standard procedure in America.  No one really felt it was that big a deal.  After all, good jobs were what this country was supposed to be all about.  Today those “regular” jobs are considered a luxury.  That’s how far we’ve fallen.

What You Don't Get About the Job Search: Voices of the Jobless

(Thanks to Adam, from whom I swiped this link.--jef)

By Derek Thompson - The Atlantic

Aug 22 2011

 

Last week, the Atlantic asked readers to share with us the one thing people didn't understand or appreciate about looking for work. This weekend, we published the first batch of responses in two pieces: The Unemployed Speak and Advice from Employers. This third post is our longest yet, culled from more than a hundred entries through comment sections and email in just the last few days.

We know their numbers. Roughly 25 million Americans, equal to the entire population of Texas, are unemployed, forced to work part-time, or have dropped out of the labor force entirely. But we don't all know their stories.

If you have something to add, you should leave your response in the comment section below or send a note to our private email account aboutmyjob1@gmail.com. Thank you all for sharing your stories. And keep reading and sharing.

 

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"For those of us prone to depression, the job search can amount to a heroic effort"

The worst part will depend on your temperament and Myers-Briggs profile, but for an introvert (probably the majority of the unemployed), the worst part is the personal uncertainty: the virus of self-doubt triggered by job rejections, the effort to second-guess your personal dynamic with the hiring contact, the lack of a reality check as to why you didn't get even a rejection letter, the willingness to overlook any illegalities, the effort to convince yourself to get back out there and do better next time. The loneliness and social isolation, if your workplace even partly filled that need, if you have no family for moral support. For those of us prone to depression, the job search can amount to a heroic effort, even without dependent family members asking you the wrong questions.

"Your friends and family are going to wonder what is *wrong* with you."

As your job search drags on, even your friends and family are going to wonder what is "wrong" with you. Of course this is mostly motivated by sheer terror that they are going to be in the same position, despite their assurances that they are too smart or good at their job to be in your position. They may be right in some instances, but the upshot is that no one has real job security anymore, and it is devastating to many people to find out that they are totally disposable in a game they thought they could win. At least the currently unemployed know there is no winning anymore, just damage control.

"Don't use my name. I can't let Google search reveal I have an unlisted graduate degree."

Being long term unemployed, the most difficult and surprising problem is the uncertainty. Many routine decisions are complicated by the unknown. Contemplating relocation seems to rule out new romantic relationship possibilities. Can my car last five more years? Spend some money on home projects to get self productive and occupied OR save every dime? Take on acquiring a new professional skill even recognizing that payoff is relatively far off? Eliminate best credential from resume to remove "overqualified" from rejection reasons? All crucial questions with unclear answers. Don't use my name. I can't let Google search reveal I have an unlisted graduate degree.

"Yes, I've got a Masters, but I'll be a kick-ass assistant."

Maybe I'm overqualified, and yes, I understand that they're scared of hiring someone and training them and seeing them leave after six months; and that that process costs them money. 

But particularly in this economy, do they not think that someone who's overqualified is applying for  job because they NEED and WANT it?  That they'll work that much harder because they're grateful for the job and the income, and that if they're overqualified, odds are they're smarter and harder working and more professional than the slackers you usually get applying to crappy jobs?  Yes, I've got a Masters, but I'll be a kick-ass assistant.  Because to get that Masters, I had to work my butt off and be organized and know how to manage time effectively.

"In one interview the questions were so few I found myself giving mini-monologues. In another, the interviewer could not stop talking."

Recently I had to deal with a couple of interviewers who asked none of the typical interview questions.  In fact they didn't ask many questions at all. In one interview the questions were so few that I found myself giving mini-monologues to make sure she got a good picture of who I am. In another, the interviewer could not stop talking so I had to get in my story whenever she paused for more than 5 seconds. GAH! I couldn't wait to get out of there. She kept saying the same stuff over and over AND I swear to God at one point I thought I fell asleep. 

I hate gimmicky interviews. Never been to one but I see them in the ads. I've seen ads asking you to come in and audition or they ask you to answer silly questions. They weren't even for creative positions.  Recently saw one ad asking the applicant to answer why they are passionate about shipping and packing? Who the hell is passionate about shipping and packing.

Another thing that ticks me off are employers who demand you commit to them long term for 1 or 2 years yet they can fire you at anytime. No way.

"I want to work. I won't apply for a job I'm not serious about."  

Employers never seemed to understand that if I was applying for a job, I wanted it. I can't tell you how many jobs I applied to where I was told, in my own follow-up from a non-response or rejection, "You were overqualified." "Or, we didn't think you were serious, given your education." I understand they don't want to lose me in three or six months, but I've got to eat and pay rent in the meantime. Not to mention I'm a darn good assistant and barista. Frankly, I probably would have stayed on in a part-time capacity in many "below-me" jobs if at all possible just for the extra help paying back student loans. I like to work. I want to work. And I won't apply for a job I'm not serious about.

***

"Possibly the worst thing about being unemployed is having to suffer through the pundit and the politician classes gassing on interminably about what it's like to be unemployed, what kind of people are unemployed and how they think and act, when none of them knows or understands one damn thing about it, nor do they even want to. Get down here on the ground, and try to go a year on $350 a week with no hope in sight, and then tell us why the lazy unemployed just need a good swift kick to get the country moving again." 

***

"The most difficult part of the job search is waiting for permission to give up"

The most difficult part of the job search is:

1. that I don't live near a factory or outsource outlet in China, India, or Malaysia.

2. trying not to appear desperate for a job when I am, in fact, quite desperate for a job.

3. that I am subject to everyone's advice on how to get a job, but no real job leads.

4. that I am reminded that having a good job is not an entitlement.

5. that when I become depressed from my job search, I'm told told to cheer up or else give a bad vibe to prospective employers ... yet when I become happy through non-search related activities, I am reminded that I should be looking for work

7. that when I confide to friends and family that I have "given up" to pursue more fruitful interests,  it elicits a crushing look of disbelief, disappointment, and disgust

8. waiting for permission to give up.

If looking for a job is a full-time job, then are you "fired" when you never (after many resumes, networking events, and workshops) find a job?

"The worst thing is the impact on my kids."

I am over the bruises to my ego; I just ignore my mother-in-law completely now. The worst thing though is the impact on my kids. We were making $120K plus two years ago. Now, about $35K. Lost the house. Thankfully still in the same school. That said, the kids went from being respectably comfortable in their cohort to being comfortable if tattered (used clothes, battered rental, same old car, no summer trips, etc.). Thank God they are still young (just started third grade) but we're not having any sleepovers here no matter how much they ask. I am afraid for the social impact on them. They are so upbeat, so enthusiastic. They don't know we're in a ditch. It would break my heart if they figured that out.

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"I think the most difficult part for many is going to be the fact that so many companies will not hire someone who doesn't currently have a job!"

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"I graduated with a Ph.D. in Education from Purdue University. After a first month and a half, I was moonlighting as a janitor."

I graduated with a Ph.D. in Education from Purdue University in May and moved back to my home state of Colorado. I was fortunate enough to stay with friends who live in a large house in a well-to-do suburb of Denver. Every day, I spent hours looking for jobs and painstakingly tailoring my cover letters and resumes to jobs. After the first month passed, I was embarrassed that I could not find a job and that I looked like a mooch. Even worse, when I did have phone interviews I failed them spectacularly because I was so nervous because I knew the stakes were high. Not to mention I have a terrible phone voice. As the days passed, I kept looking at my phone willing it to ring with an offer for an interview. The phone was blank.

What people don't realize is that it costs us precious money to put together mini portfolios for interviews, or to print and mail certain documentation (such as transcripts). There are a lot of financial sacrifices related to job searching that are being made that on the surface appear trivial, but do impact a budget.

The worse thing about phone interviews is that they focus so much on behavioral questions and interpersonal work place scenarios. They never point blank ask what your story is or why you want the job. Being labeled "unemployed" is humiliating because it conjures up imagery that is far from reality.

I learned to be prudent with gas and did not drive my car unless it was absolutely necessary. I clipped coupons like mad and shopped at the dollar store. The worst part about living in a well-to-do neighborhood is that you begin to wonder what you did wrong and what others did so well. Did I spend too much time in graduate school? Will I ever be able to pay my student loans off? How long can I keep my car running? But you also gain more empathy for people who are in similar situations. It also opened my eyes to gave me another lens from which to view society's problems. I wasn't reading or researching about it, I was living it.

After the first month and a half, I landed a retail job part time and moonlighted as a janitor in the evenings (my co-worker has an MFA in Creative Writing, so we joked that we were the mostly highly educated janitors in Denver). I was proud to finally have work but the self-doubt increased. I was finally offered a job last week. I am excited and relieved, but I am still keeping my retail job on the weekends to pay off my student loans.

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"Unemployment doesn't mean you have "free time". It's a FT job looking for work. And even when you aren't, you're occupied with other things in your house (especially if you have kids)."

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"Even the employed (who have taken a job to be employed in this economy) are not having a swell time of it."

I was unemployed for 7 months (5 months to find a job in my pay range that turned out to be "false advertising" so I left to look for other employment which took an additional 2 months and a 90 mile move [had to sell one house and buy another]).

The employer that I worked for in 2009 laid off 30% of its workforce only to advertise for those positions using "Company Confidential" ads (and the dumbasses had a "mail forward" on the @yahoo.com email account that returned the true employer's identification on my "read receipt").  The job I took is so different from my previous and I have been expected to be a mind reader. The "personality" fit is so wrong for me, so I continue to look. That being said, as companies are trying to find ways to cut their budgets, they are offering previously "cut" positions with such ridiculous wages that it is hard to find employment in the "pre-crisis" pay range where the "personality" and skill requirements make for that perfect employment "marriage."  A lot of firms are now posting want ads with "Company Confidential" status, which potential employees are sure to avoid due to the "unknown" employer seeking applicants (i.e., are you applying for your previous job or are you applying to your current employer?).  As you can tell - I'm sending "blind applications" to "blind employers."  Even the employed (who have taken a job to be employed in this economy) are not having a swell time of it.

***

"Unemployment dehumanizes the real person. They lose the essence of their identity and value. To become a number, a label, a resume, a failure, a defect, unproductive, desperate, wishful, delusional, depressed, poor and separated from respectful society.  Being unemployed is to be silently disrespected. On a par with being homeless, mentally ill or addicted."

***

"Getting a graduate degree is the worst decision I've ever made."

I've read many articles similar to this one and have never responded to any of them but today I felt the need to respond, so here's my story: 

I'm an African American woman in my late 20s.  I worked my way through my undergraduate degree and finally received it just as the recession started.  As a result, few people were hiring then.  So, after spending nearly 2 years volunteering and helping out my family in whatever ways I could I headed to graduate school (a decision that I now consider to be the worst decision I've ever made).  I'm nearly finished with that degree and after a year of being a graduate teaching assistant in my program, personal reasons dictated that I relocate closer to my family.  As a result I've spent the last year unemployed.  I recently began working part-time at a big box store--on the sales floor making what I made at my last retail job 5 years ago--and I'm probably the most educated person in the store.  I can't get a management position because I don't have enough experience in retail--so I've been told on several interviews.  Apparently, teaching adult students--both in the classroom and as a volunteer tutor--are not skills easily transferred to the training of adult workers in a retail store. 

I'm starting to feel like something is wrong with me internally.  I know that I've made some poor decisions in my life (getting a graduate degree in women's studies is the biggest among them), but I'm still out here trying.  I've applied to literally hundreds of jobs, and for all of those hundreds of jobs I've had maybe four interviews.  Only one of those jobs paid a human wage.  I'm not asking for much.  I would just like to make $30,000 a year.  At least that way I could afford to sleep on a bed again.  Did I mention that I haven't slept on a real bed in over a year?  I go out of my way to help people, not because I want something from them, but because I've always been this way, and when I need something (and I don't usually ask for help), no one is ever there to help me.  

It's sad to know that if I didn't have to work my way through school and take extra time, I'd probably have a job now. It was that extra year that put my entry-level job search in the recession's beginning.  I look at my peers who are getting married and having children and generally living life and it's depressing.  They've got jobs, health insurance, relationships, homes; I don't even have a real bed to sleep on.  

So people can criticize the educational choices that I've made. I've criticized myself more severely than anyone else can.  I know my graduate degree was an awful, awful idea. Especially since my research ideas didn't get much traction in the department.  People can say that I should have become a nurse, or an engineer or whatever else, but when I started college and the economy was still good young people were sold the idea that they should 'follow their passions'.  The jobs were supposed to come.  I didn't take out a mortgage for a property I couldn't afford; I didn't participate in credit default swaps or create a Ponzi scheme.  I went to college and educated myself.  I've spent countless hours at libraries educating myself.  I've taken care of sick relatives and taught immigrants how to read and write in English--with no pay.  But I'm not responsible enough to run a retail store. I could have spent those hours drinking or partying or whatever else, but I've spent them trying to 'improve' myself in different ways because I seriously feel like I'm damaged goods.  Why else can't I pin down a full-time job with some benefits?  

I hope someone can find something of value in my words.

"It's an employer's market, so they can make unreasonable demands."

One ad stated, "60 day trial at minimum wage to see how it works out."  So you can fire that individual and find some other poor schmuck to take a go at it?  Would I state in my cover letter that I'd like to work 60 days at minimum effort to see if the job is fun enough to stay?

Or the laundry list of tasks is 25 items long, but the hours are 10-2 every day.  So you really can't find a second job unless you'd like to wait tables at night.  I worked for an organization that fit that description and yet, they'd call me at 4:30 in the afternoon and expect me to have info from the company computer spreadsheets for them.  I also brought in my own office supplies because they never got around to giving me any, or any training.  After 3 weeks I was let go; being told they thought I was more qualified for the position than I turned out to be.

And finally: "Here is your salary and the hours are 9-5."  OK!  Second week: "I meant to say 9-6."  OK.  3rd week: "do you think you can come in at 8am until we finish this project?"  Uhhh? OK.... "Maybe when it's too hot out anyway (Arizona) you might feel like working a few hours on the weekend?"  Not really. "Oh, I need someone who is a team player.  You are fired."

And the worst part is, how do you explain this on your resume without looking like a malcontent?

***

"It used to be that older, mature and seasoned workers had a closer connection to what the experience of being unemployed was like. But the more we've moved away from the "emotions" of the depression and have instead "intellectualized" this "recession" then the harder it is for working people to be able to "identify" with the unemployed. The empathy is non-existent."

***

"I'm in my mid-40s. Ageism is a HUGE problem in this economy where employers want young, inexpensive hires."

To be blunt, the hardest part about looking for a job is that human resources departments, filled with unnamed people hiding behind the internet, have completely taken over the process. I'm in my mid-40s, a writer (I know, good luck, right?) and when I was younger, you always had a name of an editor to actually send your materials to, and to call a week or so after you'd sent your clips and resume. Now, those folks don't want to hear from you. Bottom line - if you don't have a connection to the organization you're applying to, sending your materials to HR is like sending them into a black hole. In every case during my job hunt, I only got an interview or a polite rejection letter if I found a real live human being OUTSIDE of HR who had at least a mild interest in my talents. 

Problem number two: not being in late 20s or early 30s. Ageism is a HUGE problem in this economy where employers want young, inexpensive hires.

"I would gladly pay higher taxes for universal health care, if I could only have a job that would allow me to pay those taxes."

I was laid off in 2009 at age sixty. I don't think it was just coincidence, that most of the two hundred people laid off with me were over fifty, with health problems.

After ten months, I was able to find a temp job at much lower pay, with no benefits. I worked that job, until I qualified for Social Security, and retired.

There was no way that I wanted to go through the job hunting process again, at age sixty two, when the temp job ended.

I lay the blame for all the elderly layoffs squarely on the shoulders of our government, that saddles businesses with the burden of providing health care access to their employees.

We are the only developed nation that does this, and it's the primary cause of our jobs being shipped overseas.

I would gladly pay higher taxes for universal health care, if I could only have a job that would allow me to pay those taxes.

"I have been looking for a job for six months and no one wants to hire a 50-year old woman."

I am really sick and tired of this myth you have helped to create about the unemployed having terrible resumes and not being "positive" or "energetic" or whatever else is on your list. I am a very positive person, I have excellent qualifications, and take my work very seriously. But I had my hours cut through no fault of my own, along with others.

I have been looking for a job for 6 months and no one wants to hire a 50 year old woman. I graduated with honors (and I did not graduate in the seventies, I graduated in 1999) and I have excellent computer skills using a plethora of programs, which has done nothing for my prospects. Not to mention the laundry list of duties employers are looking for, barely paying above minimum wage.

Face it, this economy has changed everything, and workers have no rights and are powerless, too bad it's not easy to just fire someone, thank god for that paper trail. I have seen people fired after over 20 years of service, when my employer showed up drunk and decided to get rid of a fellow worker, because they" needed" to get rid of one of the higher paid people to save money. But we just aren't" positive" enough. Think about it, in this environment, when you can lose your career on someone's whim, workers are frightened and working as fast as they can.

Fox host back from maternity leave with ‘post-partum compassion’

vidlink

The Truth about the US Economy

Tuesday, May 31, 2011 by RobertReich.org

by Robert Reich

 

 

The U.S. economy continues to stagnate. It’s growing at the rate of 1.8 percent, which is barely growing at all. Consumer spending is down. Home prices are down. Jobs and wages are going nowhere.

It’s vital that we understand the truth about the American economy.

How did we go from the Great Depression to 30 years of Great Prosperity? And from there, to 30 years of stagnant incomes and widening inequality, culminating in the Great Recession? And from the Great Recession into such an anemic recovery?

The Great Prosperity
During three decades from 1947 to 1977, the nation implemented what might be called a basic bargain with American workers. Employers paid them enough to buy what they produced. Mass production and mass consumption proved perfect complements. Almost everyone who wanted a job could find one with good wages, or at least wages that were trending upward.

During these three decades everyone’s wages grew — not just those at or near the top.
Government enforced the basic bargain in several ways. It used Keynesian policy to achieve nearly full employment. It gave ordinary workers more bargaining power. It provided social insurance. And it expanded public investment. Consequently, the portion of total income that went to the middle class grew while the portion going to the top declined. But this was no zero-sum game. As the economy grew almost everyone came out ahead, including those at the top.

The pay of workers in the bottom fifth grew 116 percent over these years — faster than the pay of those in the top fifth (which rose 99 percent), and in the top 5 percent (86 percent).

Productivity also grew quickly. Labor productivity — average output per hour worked — doubled. So did median incomes. Expressed in 2007 dollars, the typical family’s income rose from about $25,000 to $55,000. The basic bargain was cinched.

The middle class had the means to buy, and their buying created new jobs. As the economy grew, the national debt shrank as a percentage of it.

The Great Prosperity also marked the culmination of a reorganization of work that had begun during the Depression. Employers were required by law to provide extra pay — time-and-a-half — for work stretching beyond 40 hours a week. This created an incentive for employers to hire additional workers when demand picked up. Employers also were required to pay a minimum wage, which improved the pay of workers near the bottom as demand picked up.

When workers were laid off, usually during an economic downturn, government provided them with unemployment benefits, usually lasting until the economy recovered and they were rehired. Not only did this tide families over but it kept them buying goods and services — an “automatic stabilizer” for the economy in downturns.

Perhaps most significantly, government increased the bargaining leverage of ordinary workers. They were guaranteed the right to join labor unions, with which employers had to bargain in good faith. By the mid-1950s more than a third of all America workers in the private sector were unionized. And the unions demanded and received a fair slice of the American pie. Non-unionized companies, fearing their workers would otherwise want a union, offered similar deals.

Americans also enjoyed economic security against the risks of economic life — not only unemployment benefits but also, through Social Security, insurance against disability, loss of a major breadwinner, workplace injury and inability to save enough for retirement. In 1965 came health insurance for the elderly and the poor (Medicare and Medicaid). Economic security proved the handmaiden of prosperity. In requiring Americans to share the costs of adversity it enabled them to share the benefits of peace of mind. And by offering peace of mind, it freed them to consume the fruits of their labors.

The government sponsored the dreams of American families to own their own home by providing low-cost mortgages and interest deductions on mortgage payments. In many sections of the country, government subsidized electricity and water to make such homes habitable. And it built the roads and freeways that connected the homes with major commercial centers.

Government also widened access to higher education. The GI Bill paid college costs for those who returned from war. The expansion of public universities made higher education affordable to the American middle class.

Government paid for all of this with tax revenues from an expanding middle class with rising incomes. Revenues were also boosted by those at the top of the income ladder whose marginal taxes were far higher. The top marginal income tax rate during World War II was over 68 percent. In the 1950s, under Dwight Eisenhower, whom few would call a radical, it rose to 91 percent. In the 1960s and 1970s the highest marginal rate was around 70 percent. Even after exploiting all possible deductions and credits, the typical high-income taxpayer paid a marginal federal tax of over 50 percent. But contrary to what conservative commentators had predicted, the high tax rates did not reduce economic growth. To the contrary, they enabled the nation to expand middle-class prosperity and fuel growth.

The Middle-Class Squeeze, 1977-2007
During the Great Prosperity of 1947-1977, the basic bargain had ensured that the pay of American workers coincided with their output. In effect, the vast middle class received an increasing share of the benefits of economic growth. But after that point, the two lines began to diverge: Output per hour — a measure of productivity — continued to rise. But real hourly compensation was left in the dust.

Globalism and Technological advances have played key roles. Offshoring jobs has contributed to the high levels of long-term unemployment. Factories remaining in the United States have shed workers as they automated. So has the service sector.

But trade and technology have not by themselves reduced the overall number of American jobs. Their more profound effect has been on pay. Rather than be out of work, many Americans have quietly settled for lower real wages, or wages that have risen more slowly than the overall growth of the economy per person. Unemployment following the Great Recession remains high, and in order to get a job, many workers have to accept lower pay than before.

Starting more than three decades ago, trade and technology began driving a wedge between the earnings of people at the top and everyone else. The pay of well-connected graduates of prestigious colleges and MBA programs has soared. But the pay and benefits of most other workers has either flattened or dropped. And the ensuing division has also made most middle-class American families less economically secure.

Government could have enforced the basic bargain. But it did the opposite. It slashed public goods and investments — whacking school budgets, increasing the cost of public higher education, reducing job training, cutting public transportation and allowing bridges, ports and highways to corrode.

It shredded safety nets — reducing aid to jobless families with children, tightening eligibility for food stamps, and cutting unemployment insurance so much that by 2007 only 40 percent of the unemployed were covered. It halved the top income tax rate from the range of 70 to 90 percent that prevailed during the Great Prosperity to 28 to 35 percent; allowed many of the nation’s rich to treat their income as capital gains subject to no more than 15 percent tax; and shrunk inheritance taxes that affected only the top-most 1.5 percent of earners. Yet at the same time, America boosted sales and payroll taxes, both of which took a bigger chunk out of the pay the middle class and the poor than of the well off.

How America Kept Buying: Three Coping Mechanisms
Coping mechanism No. 1: Women move into paid work. Starting in the late 1970s, and escalating in the 1980s and 1990s, women went into paid work in greater and greater numbers. For the relatively small sliver of women with four-year college degrees, this was the natural consequence of wider educational opportunities and new laws against gender discrimination that opened professions to well-educated women. But the vast majority of women who migrated into paid work did so in order to prop up family incomes as households were hit by the stagnant or declining wages of male workers.

This transition of women into paid work has been one of the most important social and economic changes to occur over the last four decades. In 1966, 20 percent of mothers with young children worked outside the home. By the late 1990s, the proportion had risen to 60 percent. For married women with children under the age of 6, the transformation has been even more dramatic — from 12 percent in the 1960s to 55 percent by the late 1990s.

Coping mechanism No. 2: Everyone works longer hours. By the mid 2000s it was not uncommon for men to work more than 60 hours a week and women to work more than 50. A growing number of people took on two or three jobs. All told, by the 2000s, the typical American worker worked more than 2,200 hours a year — 350 hours more than the average European worked, more hours even than the typically industrious Japanese put in. It was many more hours than the typical American middle-class family had worked in 1979 — 500 hours longer, a full 12 weeks more.

Coping mechanism No. 3: Draw down savings and borrow to the hilt. After exhausting the first two coping mechanisms, the only way Americans could keep consuming as before was to save less and go deeper into debt. During the Great Prosperity the American middle class saved about 9 percent of their after-tax incomes each year. By the late 1980s and early 1990s, that portion had been whittled down to about 7 percent. The savings rate then dropped to 6 percent in 1994, and on down to 3 percent in 1999. By 2008, Americans saved nothing. Meanwhile, household debt exploded. By 2007, the typical American owed 138 percent of their after-tax income.

The Challenge for the Future
All three coping mechanisms have been exhausted. The fundamental economic challenge ahead is to restore the vast American middle class.

That requires resurrecting the basic bargain linking wages to overall gains, and providing the middle class a share of economic gains sufficient to allow them to purchase more of what the economy can produce. As we should have learned from the Great Prosperity — the 30 years after World War II when America grew because most Americans shared in the nation’s prosperity — we cannot have a growing and vibrant economy without a growing and vibrant middle class.

Wisconsin Gov. Walker Threatens To Deploy National Guard As ‘Intimidation Force’ Against Workers’ Unions

Paul Breer | ThinkProgress.org | Feb. 14, 2011

Last month, Ohio Gov. John Kasich (R) said that if employees strike, “they should be fired,” and former Minnesota Gov. Tim Pawlenty (R) wrote in an op-ed that the moral case for unions “does not apply to public employment.” Now, facing a $137 million budget deficit, Wisconsin Gov. Scott Walker has proposed a “budget repair bill” that would severely limit collective bargaining, eliminate the right of unions to negotiate pensions, retirement and benefits.


Walker is facing fierce criticism for this all-out assault against state workers, especially after he insisted that the “National Guard” will be used against a walkout:

When asked by a reporter what will happen if workers resist, Walker replied that he would call out the National Guard. He said that the National Guard is “prepared…for whatever the governor, their commander-in-chief, might call for. … I am fully prepared for whatever may happen.”

Traditionally, the National Guard is called to assist Americans in times of crisis; so Walker’s attempt to use the National Guard as a tool to suppress dissent is particularly deplorable. In the aftermath of the 9/11 attacks, more than 50,000 Guard members were called to help, and following Hurricane Katrina in 2005, more than 50,000 Guards were deployed. Veterans have strongly objected to Walker’s recent intent to use the National Guard as a vessel to intimidate state workers. VoteVet released a statement today that says Walker shouldn’t use the National Guard as an “intimidation force“:

“Maybe the new governor doesn’t understand yet – but the National Guard is not his own personal intimidation force to be mobilized to quash political dissent,” said Robin Eckstein, a former Wisconsin National Guard member, Iraq War Veteran from Appleton, WI, and member of VoteVets.org. “The Guard is to be used in case of true emergencies and disasters, to help the people of Wisconsin, not to bully political opponents. Considering many veterans and Guard members are union members, it’s even more inappropriate to use the Guard in this way. This is a very dangerous line the Governor is about to cross.”

Wisconsin state employee unions already made $100 million in concessions last December. Now, under Walker’s new proposal, state workers would have to make further sacrifices by doubling their contributions to health insurance premiums and increasing allocations to their pensions. Walker’s bill would effectively take away the right of state employees to collectively bargain for everything from vacation, sick hours, and even the hours they work. But, smacking of political favoritism for the unions that supported Walker’s campaign, the State Patrol, local police, and fire departments would stay absolutely unchanged.

In response to Walker’s assault, the Wisconsin State AFL-CIO launched a major advertising campaign, in which they say Walker and other politicians plan to “take away rights of thousands of nurses, teachers and other trusted public employees” with almost no public debate.

A pattern is emerging, where Republican dominated governments across the country are shaping up to strip workers’ rights. In addition to Walker’s new proposal, last week, Ohio Gov. Kasich said that if lawmakers don’t pass a collective bargaining bill that he approves, Kasich will impose his own changes in the Ohio budget next month. Following in lockstep, Indiana, Idaho, and Tennessee all have legislation in the works to strip teachers’ ability to collectively bargain.

State Budget Cuts

Starting at the Top

Dean Baker | Monday 07 February 2011

The corporate elite media are on yet another jihad. They are determined to cut the pay and benefits of public-sector workers who can still enjoy a middle-class lifestyle.

The idea that a schoolteacher or highway worker can retire with a pension of $2,000-$3,000 a month is directly at odds with their view of government. They believe that government exists to redistribute income from everyone else to those who already are rich and powerful. To these people, the money that is going to pay the wages and pensions of ordinary workers is money that could be in the pockets of the rich.

The economic crisis caused by the collapse of the housing bubble has created a great opportunity. State and local tax revenues plummeted as employment fell. Lower property values also meant lower property taxes. This meant that governments across the country suddenly faced severe budget shortfalls. This provided the opportunity to attack the pay and pension packages of public-sector workers.

It is difficult not to admire the brilliance of this attack. The country's wealthy elite, with the Wall Street high rollers at the forefront, wrecked the economy through a combination of incompetence, greed and outright fraud.

As tens of millions of workers are still struggling with unemployment, underemployment and underwater mortgages, this gang now turns around and starts demanding that middle-income workers take pay cuts and give up part of their pensions. This is like a child setting fire to his parents' house and then complaining because dinner isn't ready on time. But this is the way America now works, with the spoiled children on Wall Street calling the shots.

While there can be no doubt that many states face a serious budget squeeze as a result of the economic crisis, that doesn't mean that we have to join their attack on teachers, firefighters, and other public workers. Instead, we can go right to the top.

Most public-sector workers get paid no more than their private-sector counterparts, but there are, nonetheless, a small number of very well-paid public employees. The Boston Globe recent reported on the 6,400 state employees in Massachusetts who earn more than $100,000 a year. Topping the list was a professor at the University of Massachusetts Medical School who earned almost $800,000 in 2009.

According to the Chronicle of Higher Education, there were 11 presidents of public universities who earned more than $700,000 in the 2008-2009 academic year. The top earner on this list was the president of Ohio States University who pulled down more than $1.5 million. That's a lot of pension years for custodians or schoolteachers who are supposed to take big cuts to help state budgets.

There are many very high earners in the public sector if we look in the right places. Before we make a schoolteacher sacrifice part of the $25,000 pension that she worked for, maybe the president of Ohio State University should have his pay cut to less than $1 million.

We already know the counterargument: these people will go somewhere else if they didn't get their huge salaries. For the most part, this is probably not true, but in the cases where it is, there will be little loss to the state. After all, there are plenty of extremely bright, hardworking people who still consider $200,000 a good salary. Besides, aren't the budget cutters demanding that government will have to change; what better way to start than getting rid of some overpaid prima donnas?

This is not the only place to look for budget savings at the top. One reason that state pension funds have less money than they should is that they often overpay the people who manage their funds. This is not always an accident.

Wall Street honcho and former Obama adviser Steve Rattner agreed to pay $10 million to settle charges that he had made payoffs to public officials to get control of a portion of New York State's pension fund assets. It is likely that public officials outside of New York have also been willing to sell off control of pension fund assets.

It doesn't take many sleazy deals like this to add to real money. Suppose that corruption added an average of 0.5 percent to the management fees of public pension funds. If this is the case, then excessive Wall Street fees are costing public pension funds almost $15 billion a year.

States could prevent this sort of corruption by putting tight restrictions on management fees, requiring that they match the lowest cost in the industry. (Vanguard will manage index fund for around 0.15 percent of the value of the assets.) Perhaps, they should also require that all contacts between pension fund agents and bank representatives be videotaped and posted on the web so that everyone can know what sort of arrangements were made. Preventing Wall Street rip-offs could go a long way toward making up pension shortfalls, while bringing greater efficiency to the country's financial sector.

We should never forget that the bulk of states' budget problems are the result of the economic crisis brought on by Wall Street greed and incredibly bad economic policy. As much as possible, we should be trying to make the people at top pay for the damage they have caused. It makes no sense to beat up on schoolteachers, firefighters, and other public-sector employees, who have to work for a living.