More diversity, less equality: why the tradeoff?

During the past 30 or 40 years ago, the United States has come closer than ever before to equal opportunity, not only for African-Americans and women, but also GLBT folks and the physically handicapped.

At the same time a huge gap has developed between a tiny elite, who gather a greater share of American wealth and income year by year, and the vast majority of Americans, who are either falling behind or struggling as hard as they can to keep even.

Samuel Goldman, writing in The American Conservative recently, said this is no paradox.  He wrote that the tradeoff between diversity and equality is a result of a tacit grand bargain between the New Left of the 1960s and 1970s and corporate America.

… The stories of greater social equality and economic inequality are far from “unrelated”.  Rather, social inclusion has been used to legitimize economic inequality by means of familiar arguments about meritocracy.   According to this view, it’s fine that the road from Harvard Yard to Wall Street is paved with gold, so long a few representatives of every religion, color, and sexual permutation manage to complete the journey.  Superficial diversity at the top thus provides an moral alibi for the gap between the one percent and the rest.

via The Spiritual Crisis of the Bourgeois Bohemians.

Rod Dreher, also writing in The American Conservative, put it this way.

From a contemporary progressivist point of view, non-rich social conservatives who vote Republican do so out of false consciousness, or mindless bigotry.  But how many liberals would vote for a politician who proposed to stick it to the banks and the oligarchs, and who endorsed a broadly progressive economic agenda, but who openly opposed gay marriage and abortion, and endorsed religious piety?  (Basically, your pre-1970s Catholic Democrat).  Very few, I would imagine.

The culture war is in some ways class war by another name. Whenever you see some middle or upper class person gabbing on about the importance of diversity, you shouldn’t expect that they mean actual diversity — because then they would be eager to include, say, white working-class Republican Pentecostals — but rather diversity as what Goldman calls a “moral alibi,” which entails one’s ability to conceal one’s own real motivations from oneself.

via Culture (War) Is Everything.

I think there is a lot of truth in this, and it explains a lot.

It explains how Silicon Valley billionaires can avoid taxes, export jobs to some low-wage Third World country and shrug off the problems of middle-class and working-class Americans, and still be considered liberals and good friends of President Obama.

And it explains how President Obama can still be considered a liberal as he tries to undermine Social Security, attack teachers unions and negotiate trade treaties that lock in the corporate agenda.

When I worked for Gannett, CEO Al Neuharth ostentatiously promoted the advancement of African-Americans, women and gay people, which made him bullet-proof against criticism for offering sub-standard pay and benefits and crushing labor unions.

Our “diversity training” sessions always seemed to me to be part of a policy of divide-and-rule. I remember that at one session, a gay white man got up and said that gays, African-Americans and women in the newsroom should unite against the straight white men—not a view that would improve morale or teamwork.   He was not rebuked, and was later promoted.

The tipoff as to management’s aims was in the fact that they refused to agree to a clause in the union contract calling for non-discrimination based on sexual orientation.  The company wanted GLBT people, as well as African-Americans and women, to look to management, not to fellow workers, for their rights.

Of course acceptance of diversity is a good thing, not a bad thing.  It is a good thing that Ursula Burns, a black woman, can become CEO of Xerox, but not everybody can be a CEO or wants to be one.   Some people are content with an honest day’s pay for an honest day’s work, and what’s wrong with that?

Nor is there any logical reason why diversity and equality should be tradeoffs.  The U.S. labor union movement has long ceased to be a movement primarily of native-born white men.   Trade unions recognize that they can’t win unless they stand together, regardless of race, gender, sexual orientation or anything else.

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[AFTERTHOUGHT 5/25/13]

As I see it, one link between social liberalism and economic inequality is a widespread meme that sees society as an arena of competition and social justice as a guarantee of fair rules and a level playing field.

If you see society in this way, rather than as a means for people to co-operate for mutual benefit, then justice demands that you do your best to assure equal opportunity for everyone, regardless of race, ethnicity, gender, sexual orientation, immigration status, physical handicap or anything else that isn’t under control of the individual.   But these meme does not give the wealthy any obligation toward the non-wealthy.  It would be like demanding that the winner of a high-stakes poker game return some of his winnings to the loser.

 

Why good people can’t find jobs

The U.S. Bureau of Labor Statistics finds in its surveys that there are about 10 people looking for work for every three jobs that are open—more than twice the proportion of job-seekers before the recession.  Yet many employers say there is a labor shortage.  They say they have jobs that they can’t find people to fill.

Peter Cappelli, director of the University of Pennsylvania’s Wharton Center for Human Resources, says that the problem is not unqualified job-seekers.  The problem is bad  hiring practices.

First, he says, when employers advertise for employees, they cast too wide a net.  They get a tidal wave of applications, more than anyone can possibly consider, and so they have to look for reasons to thin out the applications.

Some throw out all applications that use certain buzzwords, or omit certain buzzwords.   Some throw out all applications which indicate that the person is older than a certain cutoff point (even though this is illegal) or that are worded so as not to reveal the person’s age.   Many throw out all applications from people who don’t have the exact skills required, and many throw out all applications from people not currently employed.

Double click to enlarge.

So if the only person you are willing to hire is someone already doing that exact same job for some other employer, and you don’t want to pay that person a premium wage to lure them away, then, yes, you are going to have trouble filling that post.   I’m exaggerating to make a point, but what I hear from my friends who are looking for work confirms what Cappelli says.  Many employers have arbitrary filtering systems that reject job applications from good people.

Another problem, as Cappelli sees it, is that employers don’t want to hire people they would have to train.  They don’t want to spend the money to train people because they’re not confident that the trainee will stay with them long enough for them to get their investment back.  In fact, the better trained someone is, the better chance the person has of getting a better job elsewhere.

Job-seekers these days spend their own money trying to acquire qualifications they think employers want, but often those qualifications are a mismatch.

According to the theory of how a free-market economy is supposed to work, this isn’t supposed to happen.  According to economic theory, if there is a shortage of workers to fill a certain type of job, then wages for that job will rise until supply equals demand.  The fact that this isn’t happening suggests that theory doesn’t always apply to the real world.

Part of the reason employers are so slow to fill job openings is that the reason they advertise for new workers is merely to appease their over-worked existing staffs.  As long as they are going through the motions, they can tell their exhausted existing workers that they are doing the best they can.

Cappelli has ideas for making things better, including the following:

• Have employers work with community colleges and vocational high schools to provide training to qualify employees to do specific jobs.  Most American cities and counties want to attract industry and jobs.  This would be a better way to do it than offering tax abatements and other special privileges.
• Promote from within.   An employer’s best workers are more likely to stay with a company if they have hope of a future within that company.  Taleo Corp., a “talent management” company, reported that, in recent years, two-thirds of all job openings, even in large companies, were filled by hiring from without.  A generation ago, all but 10 percent of openings were filled by promotion or transfer from within.

Cappelli also suggests giving new hires a learner’s wage while they receive on-the-job training.  This could be good, but it offers possibilities for abuse.   Unscrupulous employers could hire cycle after cycle of learners and never give them full pay.  In this age of widespread wage theft, this is a realistic concern.

Click on Why Companies Can’t Find the Employees They Need for an article by Cappelli in the Wall Street Journal.   In fairness to him, his tone is less strident than mine is.

Click on Why Good People Can’t Get Jobs—What You’re Up Against for a review of Cappelli’s book, Why Good People Can’t Get Jobs:  The Skills Gap and What Companies Can Do About It.  I haven’t read the book.

NYC fast food workers report wage theft

New York Attorney General Eric Scheiderman has begun an investigation into wage theft from fast-food workers in New York City.   The alleged crimes include paying less than minimum wage, failure to pay overtime, failure to reimburse employees for work-related expenses and falsifying payroll records.

These things are not just bad labor practices.  They are crimes, just as much as picking somebody’s pocket is a crime.  And the victims are hard-working people at the margins of economic survival.

There is every indication that these practices are widespread, not just the actions of a few bad apples.   And to my mind, franchisers—McDonald’s, Burger King, Domino’s and the rest—have just as much responsibility to set standards for obeying labor laws as they have for setting standards of cleanliness and customer service.

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Click on the following links for details.

State Said to Be Reviewing Pay for Fast-Food Workers in the New York Times.

New York City fast food restaurants find a lot of ways to steal from their workers on Daily Kos Labor.

When Your Boss Steals Your Wages: the Invisible Epidemic That’s Sweeping America by Lynn Stuart Parramore on AlterNet.

Workers fight closing of their factory by buying it

The videos above and below tell the story of how workers at Chicago Window and Door fought the closing of their factory by buying it, and starting a new business, the New Era Windows Cooperative.

I wish them good success, because such enterprises have to face a lot of skepticism and a lot of opposition.  People in the Mitt Romney class—the holders of financial assets—want us to believe that we need them to be job creators.  Their power is threatened if workers can be their own job creators.

What the New Era workers have going for them is that the enterprise can draw on the initiative and knowledge of all of them, versus the standard business enterprise in which you have a few decision-makers and the rest supposedly just following orders (although in fact no organization could function if employees did no more than follow orders)

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Click on New Era Windows Cooperative for the New Era home page.

One big problem that worker-owned businesses have is financing.  They can’t sell stock, except to each other, and most lenders have no experience with or interest in such businesses.  New Era got help from The Working World, a non-profit micro-credit organization, which provides small loans to worker cooperatives.  Click on The Working World for Working World’s home page.

The employees of Chicago Window and Door were members of the United Electrical Workers, a union noted for militancy and rank-and-file democracy.  The support of the UE surely must have helped.  Click on United Electrical Workers for the UE’s home page.

One in four US workers are “guard labor”

One fourth of the American work force is employed in “guard labor”, not producing anything themselves, but keeping the actual workers in line, according to a studies by economists Samuel Bowles of the Santa Fe Institute and Arjun Jayadev of the University of Massachusetts.    Comparing nations, they reported that the greater the amount of inequality in a society, the higher the percentage employed in guard labor.

The following is from an interview with Samuel Bowles in the Santa Fe Reporter.

Inequality leads to an excess of what Bowles calls “guard labor.”  In a 2007 paper on the subject, he and co-author Arjun Jayadev, an assistant professor at the University of Massachusetts, make an astonishing claim: Roughly 1 in 4 Americans is employed to keep fellow citizens in line and protect private wealth from would-be Robin Hoods.

The job descriptions of guard labor range from “imposing work discipline”—think of the corporate IT spies who keep desk jockeys from slacking off online—to enforcing laws, like the officers in the Santa Fe Police Department paddy wagon parked outside of Walmart.

The greater the inequalities in a society, the more guard labor it requires, Bowles finds. This holds true among US states, with relatively unequal states like New Mexico employing a greater share of guard labor than relatively egalitarian states like Wisconsin.

The problem, Bowles argues, is that too much guard labor sustains “illegitimate inequalities,” creating a drag on the economy.  All of the people in guard labor jobs could be doing something more productive with their time—perhaps starting their own businesses or helping to reduce the US trade deficit with China.

via Santa Fe Reporter.

The category of “guard labor” includes police, prison guards, court workers, military and civilian employees of the Department of Defense and private guards, as well as monitors and supervisors with the power to reward and punish.   They do not count employees of companies that make burglar alarms, video surveillance cameras and other security equipment.

They do count the unemployed and prisoners, which may seem like a stretch.  Bowles and Jayadev argue that if nobody was out of work and nobody was in jail, there wouldn’t be any way to keep the rest of the population in line.  This is in line with Karl Marx’s idea that employers need a “reserve army” of the unemployed to keep wages low.   But even excluding the unemployed, Bowles and Jayadev said that “guard labor” is about a fifth of the American work force.

The chart below shows the growth of guard labor in the United States.   By their count, the percentage of U.S. workers in guard labor nearly quadrupled in the 20th century, and increased more than 10 times if you don’t count the unemployed.

This is old information, but I don’t think the trend has reversed.  I see armed security guards and video monitors everywhere I go and, while I’m retired, my friends tell me that work conditions are getting more and more restrictive.

In the best of societies, there will be a need for a certain number of supervisors, monitors, police, courts, prison guards and military forces, and there will be a certain number of prison inmates and job-seekers.   But Bowles and Jayadev found that the percentage is much greater in nations with a high degree of economic inequality, such as the USA, which has more than double the percentage of guard labor of Sweden or Denmark.   Where there are no extremes of rich and poor, it is not necessary to devote so much effort to keeping people in line.

Click on Guard Labor PDF to read the 2006 paper by Samuel Bowels and Arjun Jayadev.

Click on Garrison America PDF to read the 2007 paper by Samuel Bowles and Arjun Jayadev.

Click on Crime and Punishment: Some Costs of Inequality for a report by Nancy Folbre in the New York Times.

Click on Born Poor?  Santa Fe Economist Samuel Bowles Says You’d Better Get Used to It for the full interview in the Santa Fe Reporter.

Click on Vested interests in mass incarceration for an earlier post of mine on a related subject.

Hat tip to Nina Paley for the Mimi and Eunice cartoon.

Foxconn: the face of world manufacturing

Foxconn, the giant Chinese manufacturing company, is expanding worldwide, not only into poorer regions of China but also into Brazil, India, Mexico, Malaysia, central Europe and, in the not-too-distant future, the United States.   With 1.4 million workers in China alone, it is the world’s second largest employer, behind Walmart.

Foxconn suicide nets (Bloomberg News)

The company, whose headquarters are in Taiwan and largest operations are in China, is famous for asking its stressed-out workers to sign pledges to not commit suicide and for putting up suicide nets to catch workers jump out of the windows of its tall dormitories.

Ross Perlin, writing in the current issue of Dissent magazine, says there are good reasons for this.   Work schedules of 12 hours a day and 50 hours a week are common, he said, with up to 100 hours a week during peak production.  He said that wages average $1 to $2 an hour.

Although the company continues to be plagued by wildcat strikes and suicide threats, working conditions have improved slightly, as a result of audits by Apple Computer, a major customer, and a tight labor market in China, Perlin wrote.

But there is a limit to possible improvement.  He quoted an analysis that said only 1.8 percent of the price of an iPhone goes to manufacturers in China, while Apple gets 58.5 percent and the rest goes to manufacturers of high-end components.  He didn’t quote the source of these figures, and I suspect they are exaggerated, but I agree with his overall point.  Profit margins of companies such as Foxconn and other Chinese suppliers are razor-thin, and they can succeed only by operating on a huge scale while keeping costs, including wages, to a minimum.

Perlin said that Foxconn and Apple symbolize the long-standing relationship between the United States and the economies of eastern Asia, including Japan and South Korea as well as China.

[It is based on] a series of dyads: American consumption and Asian labor, American innovation and Asian manufacturing, American debt and Asian savings, American power and Asian acquiescence. In its latest form—the co-evolution of Silicon Valley and China’s Special Economic Zones, particularly in information technology and alternative energy—it can be summed up in the words, engraved on nearly every Apple product: “Designed by Apple in California, Assembled in China.”

via Dissent Magazine.

This economic relationship has existed for a long time, but it can’t go on forever.  It depends on us Americans being relatively rich, and over time it makes us relatively poorer.

There are at least two ways it can come to an end.  One is that the United States government stands up for U.S. workers and does what the Japanese, South Korean, Chinese and many other governments do, which is to allow access to the nation’s market only on condition that the company make a positive contribution to the nation’s productivity.  Currently the U.S. government is on the opposite course.   From Reagan through Clinton to Obama, successive administrations have sought to lock the United States into international trade treaties precisely intended to prevent member governments from asserting national interests against global corporations.

The most likely ending is that we Americans eventually cease to be able to earn enough or borrow enough to be a worthwhile market for Chinese goods.  If and when that happens, the question becomes whether the USA will take down the economies of eastern Asia with us.  Maybe by that time they will have developed a middle class large enough to be a market for their own goods, after having moved their manufacturing operations to Africa or some other poorer part of the world.   Or maybe they or we will have found a better path, in a way I can’t presently imagine.

Click on Chinese Workers Foxconned for Ross Perlin’s full article in Dissent Magazine, which has other articles on China in the Spring 2013 issue.

Why are waiters and waitresses treated so badly?

I lead a good life, and that life is made possible by the hard work of many people—many of whom earn less than I do.  As I get older, I eat more meals in restaurants, and it makes a difference to me whether the waiters and waitresses know their business (they usually do) or not.  They’re on their feet almost all the time, they have to keep track of orders and notice when customers need their attention, and they maintain a cheerful, friendly appearance, even at the end of a long day when they may not feel like it.

Nearly one in 10 American workers, a total of 13.1 million people, are employed in the restaurant industry, and they’re among the worst-treated of American workers.  According to an article by Matt Frassica for Salon:

• Restaurant employees receive the lowest wages of all employment categories tracked by the Bureau of Labor Statistics.  In 12 states, the minimum wage for workers who receive tips, such as waiters, waitresses and bartenders, is $2.13 an hour, the lowest allowed by minimum law.  Many other states (but not all) set a sub-standard minimum wage for tipped workers.
• One survey indicates that nearly 90  percent of restaurant workers are without paid sick days, vacation days or health insurance.
• Employers commonly violate federal and state labor laws, by engaging in wage theft (not paying for all hours worked) or requiring tip pooling.
• Only about 1 percent of restaurant workers belong to labor unions.  Most of those work for hotels and casinos in Nevada, which are able to earn a decent profit while paying decent wages.

Many people have the mistaken idea that waiters and waitresses earn federal minimum wage, and that a tip is something extra that a customer gives out of benevolence or as gratitude for extra-good service.  The fact is that tips are regarded as part of their base compensation, which is why laws so often allow sub-minimum wage pay.

I suppose the ultimate answer is a stronger labor union movement and better federal and state labor laws, but I’m not going to hold my breath until these come about.  The least I can do is to leave an adequate tip (20 percent) and treat waiters and waitresses with normal human courtesy.

Click on Restaurant horror show: How waitstaffs are mistreated for Matt Frassica’s full Salon article.

Click on BIG SHOT and read the post and comment thread for blow-by-blow descriptions of encounters between restaurant servers and obnoxious customers.  Servers sometimes have ways of striking back.

Is immigration a right?

Years ago, when I first learned there was a controversy in California over whether unauthorized immigrants could get driver’s licenses or send their children to public schools, I wondered how that could even be an issue.  If someone is in the United States who is known to be here illegally, why is the person not deported immediately?

After a little bit of reading and thinking, the answer became obvious:  Because it is to the benefit of employers to have an underclass of workers who are outside the protection of U.S. law.

David Bacon, a former union organizer and immigrant rights advocate and current photojournalist, spelled out in detail just how this works in his 2008 book, Illegal People: How Globalization Creates Migration and Criminalizes Immigrants.  He drew a picture of the authorized immigration situation by connecting a great many dots that usually are not connected.

He began the book by describing the labor struggles of Mexican immigrants at a luxury hotel in California and a meatpacking plant in North Carolina.  He showed how employers used immigration enforcement as a means to suppress workers who asserted their rights or tried to form union.  Then he went to the parts of Mexico where many of these workers came from, and described the conditions which forced them out of their homes.

Some came from Oxaca in southern Mexico, where imports of cheap mass-produced U.S. corn, and the cessation of Mexican government purchases of corn for government grocery stores, bankrupted many small farmers and turned them into migrant laborers, like the Okies and Arkies during the U.S. Great Depression.  Others came from Sonora, where copper miners in Cananea went on strike against wage and benefits cuts, and were blacklisted.

Historically the Mexican government provided some protection for small farmers and union workers, but, Bacon reported, these were withdrawn under pressure from the International Monetary Fund, World Trade Organization and administrators of the North American Free Trade Agreement.  They operated under the “neo-liberal” philosophy that says that benefits to farmers and working people are illegitimate because they interfere with free trade and the free market.  Unemployment in Mexico and Guatemala rose to 25 percent.  In order to survive, Mexicans and central Americans came to work in the United States without legal rights, at a time when U.S. workers were losing ground on wages and benefits.

Bacon described the political struggles of Mexican immigrant workers in the United States, and their sometimes successful efforts to form alliances with the African-American community and the U.S. labor movement.  Mexican immigrant workers, African American workers and white Anglo workers should recognize that they’re all workers, and not allow themselves to be pitted against each other, he wrote.

He ended the book by tracing the history of Filipino immigration and labor struggles in the United States, and a report on immigrant workers’ struggles in Germany and Britain, which are similar to the U.S. conflict.

He rejected sanctions against employers as a solution to unauthorized immigration, for the reason that sanctions have not been enforced.  In practice, they are used as a rationale for threatening Immigrant workers who stand up for their rights.

He said “guest worker” programs and the H-1B visa program for high-tech immigrant workers are another form of exploitation.  Both programs leave immigrants at the mercy of their employers, with no right to quit their jobs.  They are like the indentured laborers of colonial America, who were obligated to serve a particular employer on his terms for a specific period of time, such as seven years—the difference being that, after serving our their indentures, they were free to remain.

Do unauthorized immigrants have a right to remain in the United States in violation of U.S. law?  Bacon argued that if corporate executives have a right to shift capital freely from country to country in search of profit, surely people have the same right to go from country to country in search of work.

There is a legal doctrine which, I think, is called “adverse possession.”  If I allow my neighbors to use a footpath across my land for decades, and never close it off, at some point they gain a right to use it.  If migrants are brought into the United States, and the laws against their being here are winked at, do they not at some point gain a right to stay here?

A friend of mine knows a man who does work abroad as an architect and subcontractor for work on U.S. embassies and consulates.  He had just got back from doing work in Norway.  My friend said he told him that Norway deals with its immigration situation by strict enforcement of wages and hours laws.  Contractors could import workers from the Balkans or Turkey, but what would be the point if they had to pay the same wages and benefits as a Norwegian workers?

Bacon would say that is the real question.  If workers in all countries could earn sufficient wages to provide for themselves and their families, immigration would not be an issue.

Click on David Bacon News for his home page.

Click on How Mississippi’s Black / Brown Strategy Beat the South’s Anti-Immigrant Wave for an article by David Bacon in The Nation about a political alliance between Mexican immigrants and African-Americans defeated anti-immigration legislation in Mississippi.

America’s low-wage recovery

When and if employment in the United States gets back to what it was before the recession, American working people will still be worse off than before, because on average they’ll be working in lower-paying jobs.

The National Employment Law Project, a liberal think tank, reported that about three out of five of the new jobs gained during the current economic recovery were in low-wage occupations, with median pay less than $13.52 an hour, or $28,122 for someone working full-time, year-round.   But about four out of five of the jobs lost during the recession were in occupations with median wages above that level.

There is good growth in occupations such as retail clerk, kitchen worker, laborer, freight handler, waiter and waitress, home health aide, office clerk and customer service representative.  The low-wage occupations would provide $15,621 to $28,121 a year to someone working full-time year-round.

The moderate-wage jobs would pay $28,142 to $42,973 a year.  They’re mostly in construction, information industries and banking, insurance and real estate.

Median wages in the high-wage jobs would be $42,994 to $110,906 a year.  A relatively small number of these jobs were lost during the recession, but the loss hasn’t been made up.

The NELP researchers said the shift reflects a hollowing out of the middle level of the U.S. economy which has been going on for a long time, plus layoffs of government workers during the recession.

Back in April, the Economic Policy Institute, a labor-oriented think tank, issued a report predicting that 28 percent of American workers will be in low-paid jobs in 2020, about the same as in 2010.  The EPI defined a low-paid job as one insufficient to keep a family of four above the poverty line.  In 2011, that was $23,005, or $11.06 an hour for someone working full-time year-round.  In yet another report, NELP researchers estimated that one in four American workers currently has a job that pays less than $10 an hour.

What all this shows is that economic stimulus is not enough to bring about prosperity.  Unless we Americans are resigned to growing steadily poorer, we have to figure out not just how to restart, but how to rebuild, our economy.

Click on The Low-Wage Recovery and Growing Inequality PDF for the NELP report.

Click on Majority of New Jobs Pay Low Wages, Study Finds for a summary of the NELP report in the New York Times.

Click on The Future of Work: Trends and Challenges for Low-Wage Workers PDF for the EPI report.

Click on Welcome to Your Low-Wage, Temp Work Future for a summary of the EPI report in Forbes.

Click on Obama, Romney and the Low-Wage Future of America for an article by Dan Froomkin of Huffington Post on the failure of either President Obama or Governor Romney to address this issue.

Hat tip to Think Progress.

The Canadian roots of Labor Day

This is from the History Channel.