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The plight of labor: American Dream becomes a nightmare Comment on this post ↓
September 3rd, 2013 by Warren Swil

Campaign finance ‘bribery’

at root of wealth inequality

Thomas E. Perez, just over a month on the job as Secretary of Labor. He was sworn in on July 23. Click image to enlarge.

WITH MONDAY BEING Labor Day in the U.S., our thoughts – and those of op-ed columnists ­– naturally have turned to the plight of American workers.
The timing of the nationwide strikes against fast food outlets last week was probably no accident. Fast-food eatery workers toil, in many cases, for the federal minimum wage of $7.25 per hour; an annual income, assuming a 40-hour workweek of $15,080.
According to the U.S. Census Bureau this is a grand total of $120 per year above the poverty threshold for a two-person household.
The minimum wage has not been adjusted since 2009, according to the Department of Labor.
As the purchasing power of the minimum wage has declined over time, the American Dream of rising prosperity for everyone is falling further and further out of reach for millions.

ACCORDING TO A study of the inflation adjusted minimum wage at Oregon State University the 2012 minimum wage was equal to the wage paid 52 years ago, in 1960.
Indeed many states  do have higher minimum wages than the federal minimum. Washington’s minimum wage is highest, at $9.19, and Oregon’s is second at $8.95.

Minimum wage rates are all over the map, as this one from the U.S. Department of Labor shows. Click image to enlarge.

But a map depicting variations by state at the Department of Labor shows the wide disparities.
Four states have minimums lower than the federal one, and five have no minimum wage at all.
Reporting on the strike last week in Fast food strike takes over 60 cities Tarini Parti at Politico wrote:
“Thousands of fast-food workers nationwide are taking the fight for higher wages directly to their corporate employers after seeing little hope in Congress for increasing minimum wage.
“Workers at fast-food chains such as McDonald’s, Burger King, Wendy’s and KFC in at least 60 different cities began their strike Thursday, which has been dubbed “National Strike Against Low Pay Day.”
Well, it should come as no surprise that these workers are asking for a raise. They want $15 per hour.
We have written several times in this space how income and wealth inequality is destroying the American dream, most recently on Aug. 4 in Inequality makes U.S. look like a third-world country
What is often overlooked is that the minimum wage and income inequality in general is a political – rather than economic – issue. It is the result of less political clout for workers now than at any time in almost a century.
 This was barely hinted at in the Politico story
“Several members of Congress, who support increasing the minimum wage but realize they don’t have enough support to pass reform, will be joining the workers in different cities.”
President Obama has proposed raising the federal minimum on several occasions; his most recent goal is $9 per hour.

The Politico article on last week’s fast food worker strike that hit some 60 cities across the U.S. Click image to enlarge.

BUT, THE REAL SOLUTION lies elsewhere – in restoring the political power of workers. We saw the potential of this briefly in the uprisings of the summer and fall in 2011 with the Occupy (Everything) movement, but the energy it so promisingly generated in cities large and small has dissipated.
A novel idea was floated Monday by Harvard Law Professor Benjamin I. Sachs, in his op-ed A New Kind of Union in The New York Times.
His first observation is astute and appalling.
“[T]he poor and middle class are in an equally serious, if less well recognized, political predicament: the government has become almost entirely unresponsive to them,” Sachs writes.
“This [is] a profound political failure. A democracy in which government policy responds to the rich and not to the poor or the middle class is a democracy unworthy of the name.”
He is absolutely right. And the reason government is unresponsive (there’s little hope of Congressional action on a minimum wage increase in the foreseeable future) to the poor and middle class is one that I have said before is at the root off “all evil:” the legalized system of bribery known as campaign finance.
In proposing that workers be allowed, at the workplace, to form strictly political unions, Sachs then notes:
“Campaign-finance reform has failed because it does nothing to address the underlying disparities in wealth distribution that produce political inequality in the first place. Legal reforms that enable political organizing are fundamentally different because organization, like wealth, is its own source of political power.
“Allowing workers to organize for politics, even when they decide not to organize for collective bargaining, would help restore balance to a democracy that wealth has so badly skewed.”
This is an exceptionally good idea, with one exception. Who is it that can – or could – do the “allowing”?
Well, we’re back at square one, again.
It is only Congress that could pass such legislation allowing for the formation of strictly political “unions” that are voluntary and not involved in collective bargaining at all.
Don’t hold your breath.
Those 535 individuals are such captives of the special interests this concept is DOA. Alas.

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3 Responses  
  • Jack van Dijk writes:
    September 3rd, 2013

    In this case, I suggest to Google the “Rhineland method of corporate government”. It described the “Industrial Associations” as they are required to be in each German and Dutch company in the form of an association of employees, representing the employees and giving the employees a seat on the Board of Directors. By law, in both countries, a company has to ask for and get advice from the employees through the Industrial Association Board. The employees can veto a sale of a company.
    Look at it this way: a company, any company, is a three-legged stool, investors, management and employees form the stool. Why should one leg have all the power?
    However, it is like the problem with America’s infrastructure, it needs repair badly and that would also get us new jobs, but not immediately, you have to first makes designs. So it is put of, and put off, and put off, and put off…. Then years from now we will still have a badly corroded infrastructure and CEO’s making 500 times the income of the average worker.
    Then 20 years from now we will have this discussion again, only on different computers.
    (Care to inspect the infrastructure of Germany and the Netherlands?)

    • warren writes:
      September 3rd, 2013

      Jack, the neglect of US infrastructure is criminal!
      Every time somebody mentions “investment” in Congress, the deficit hawks scream as if they were pigs!
      They are pigs!
      If ever the time was right to borrow money in the bond markets and invest it in infrastructure – which in my view includes education – the time is now. Interest rates on T bills and bonds will never be this low again in our lifetimes.

      • Jack van Dijk writes:
        September 3rd, 2013

        Warren, things are never resolved in the US government. Only by the grace of a very small population in a very large prosperous (as in having lots of resources in the soil and in the banks) makes the US money, but only for a small group of people. Read “Why nations fail” and then immediately “Capitalism in crisis”. I am getting so old that I am only thinking “will it collapse within thirty years?” and I hope that my grand-children will have good thoughts about me when have to scratch something to find something to eat.


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