Posts Tagged ‘The Big Squeeze’

Tough times: the social contract

September 11, 2010

I count myself lucky to have lived and worked in what, in retrospect, was a golden age for the United States.  When I came of age in the 1950s, I took it for granted that each decade would be better than the more before – that progress toward higher wages and more leisure was a law of nature.  There was an implied “social contract” – that if I was loyal to my employer, and did a good job, my employer would do his best to keep me employed at a decent wage.

I didn’t need to read Steven Greenhouse’s 2008 book, The Big Squeeze: Tough Times for the American Worker, to understand that this belief was an illusion.  Automatic progress is like getting something for nothing.  Things don’t get better unless people are doing things to make them better.

The golden age rested partly on the unique position that the United States enjoyed in the quarter century following World War Two, as the world’s only intact industry economy.  In college, we were taught about the problem of the world “dollar shortage.”  The problem was that the U.S. economy was so rich and productive that the rest of the world had almost nothing to sell that we Americans wanted to buy, and therefore had no dollars with which to buy products of American industry.  In this age of globalization, that seems like another world.

The United States in the earlier era was not only a wealthy nation, but the wealth was spread around.  It was said in wonderment by visiting Europeans that you couldn’t tell an American’s social class by looking at him or her.  Prosperity was spread so widely that working people were well-fed and well-dressed.  This, too, was not a law of nature.  It rested on a balance of power between big business, organized labor and the government.

 

Industrial labor unions, whose right to bargain collectively was guaranteed by the government, negotiated improvements in pay, benefits and hours with big manufacturing companies.  Because of their position in the marketplace, they could afford to raise prices to pass along the costs.  The union wage tended to push wages up generally.  Few of us newspaper reporters were represented by strong unions, but it would have looked bad if our pay had been much below the members of the International Typographers Union.  Because of high wages, Americans could afford to buy the products of American industry.  It was a benign spiral upward, not a vicious spiral downward.

All this started to come apart in the 1970s.  That was when foreign cars and other products started making inroads into the U.S. market.  It was also when American business decided to once again treat labor unions as the enemy rather than as a combination of junior partner and loyal opposition.  President Ronald Reagan, by breaking the air traffic controllers’ strike, became the first anti-union President since before President Franklin Roosevelt.  All this is described very well in Thomas B. Edsall’s The New Politics of Inequality – a book written more than 25 years ago, but still worth reading because the trends Edsall described are still in motion.

In my experience, American working people, including union leaders, are much less class conscious than business executives.  Labor leaders always act as if they need to justify and explain themselves.  Business executives are confident that they rule by divine right, and they don’t want to share their authority with either their employees or the government.

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Tough times: wage theft and other crimes

September 11, 2010

I first learned the term “time theft” when I read Barbara Ehrenreich’s Nickel and Dimed: On (Not) Getting By in America, a first-hand account of low-wage work.  Her last job was working for Wal-Mart, and she was told that any time she spent speaking to a co-worker, or going to the bathroom, or just caching her breath was “time theft” from her employer.

Reading  Steven Greenhouse’s 2008 book, The Big Squeeze: Tough Times for the American Worker, I learned another term – “wage theft” –  which is about how employers coerce employees into working unpaid overtime or falsify their records so as not to pay for all hours worked.

I knew that undocumented workers – illegal immigrants – constituted an underclass outside the protection of U.S. law that could be exploited at will.  I knew that salaried “professionals” – programmers, college instructors, journalists, lawyers – often worked 60 hours or more a week, sometimes voluntarily but often not.  And I knew that companies found ways to redefine employees as managers or independent contractors to avoid having to obey labor laws.

The shocking thing about Greenhouse’s book is how many companies simply violate the law.  This is not just fly-by-night employers, but some of the best-known U.S. companies – Wal-Mart, Taco Bell, Family Dollar, Pep Boys, Toys “R” Us and others.  Sometimes they require employees to work after they’ve clocked out, or before they’ve clocked in.  Sometimes employees are given workloads that a normal human being can’t complete in the hours allotted, and have no choice but to work through their breaks and lunch hours. Sometimes managers simply alter the computer records.

The risk of getting caught, according to Greenhouse, is exceedingly small, because governments have cut back on enforcement of labor laws, and the penalty for getting caught is seldom enough to be a deterrent.  One of his main proposals for reform is simply the enforcement of existing law.

Not all companies do this, as Greenhouse noted.  McDonald’s, for one, has an excellent record of compliance with wage and hours laws.

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Tough times for the American worker

September 7, 2010

Over Labor Day weekend I read Steven Greenhouse’s The Big Squeeze: Tough Times for the American Worker. It was published in 2008, so it doesn’t deal with the results of the current Great Recession.  Rather it covers the condition of the working class of the United States in supposedly good times – the alleged prosperity we’re trying to get back to.

I knew the story in broad outline – the erosion of the U.S. manufacturing base, wage stagnation, the loss of job security, rising debt – but Greenhouse’s reporting, with many poignant individual stories and backed up by statistics, brought home to me just how bad things are.

Samuel Gompers, the founder of the American Federation of Labor, famously said that what American workers want is “more.” What they are getting is more stress, more hours of work, more unpaid overtime, more insecurity, more debt, more years to work until retirement, but not more pay or benefits.

I was surprised, which may show my naivete, at the amount of lawbreaking by employers.  Greenhouse tells story after story of workers being forced to work overtime and through their lunch hours without pay, of workers being dismissed on trumped-up charges because they were injured on the job and became financial liabilities, of workers being locked in to their workplaces like the women who died in the infamous Triangle Shirtwaist Fire

There are two aspects to the story.  There is what I call the Adam Smith story, which is about the need to adapt to a highly competitive global economy, and the Karl Marx story, which is about class warfare and redistribution of income upward.

You can’t ignore either aspect.  American industry did grow complacent after World War Two.  The United States had the world’s only intact industrial base, and, for about 30 years, our industries had no serious competitors. There used to be an urban legend about the city of “Usa, Japan” which existed for the purpose of being able to stamp products “Made in USA.”  Corporate management grew complacent, as did government and organized labor.  The U.S. government, instead of trying to strengthen international competitors such as Eastman Kodak Co., Xerox Corp. and IBM Corp., broke up their market power through anti-trust suits.  Organized labor, all too often, resisted new technology and clung to outmoded job classifications and work rules.

But in fact the U.S. economy is not doing all that badly.  It is just the human beings in the economy who are struggling.   Corporate profits, national output and productivity continued to grow in the 2000s, as do the incomes of Americans in the highest brackets.  But wages were flat, benefits were eroding and the majority of workers were under increased pressure to work harder and longer, even in a time of economic expansion.

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