Breaking News: American Dream is a Myth

American Dream? (Image from Flickr, by OakleyOriginals)

Nobel Prize-winning economist Joseph Stiglitz was recently on The Daily Show to promote his new book The Price of Inequality. In the interview, he told Jon Stewart that the life opportunities for an American youth are "more dependent on the income and education of his parents" than in any other wealthy country.

According to Good Education, Stiglitz’s observation is an indication that the American Dream “has become a myth.”

Good Education is wrong in a significant way: The American Dream has always been a myth. Sure, some people have transcended the backgrounds of their parents, moving into the middle class from humble working class or immigrant backgrounds. However, extremely few have ever gone on to become wealthy members of the ruling elite.

It is also true that middle class wealth has been shrinking dramatically since the economic meltdown a few years ago, making it much more difficult to enter into and remain in the middle class. However, wages and living standards for the middle and working classes have been sliding steadily since the 1970s and would likely be continuing to do so even without the economic crisis as a result of the capitalist class’ long-running assault on wages, union power and New Deal and Great Society entitlements.

Good asks why we accept an “institutionally driven system that lets people who have wealth play by and create a different set of rules.” Implicit in this question are the assumptions that the system could be otherwise and that it is acceptable for there to be a wealthy class in the first place.

The problem is that as long as there are class distinctions in society, especially ones as dramatic as those in wealthy capitalist countries, those with the wealth will necessarily have a monopoly on political and social power. In other words, it is not possible for the rest of us to have equal political or social power so long as a wealthy class persists. Indeed, both the political and economic systems exist precisely to facilitate their acquisition of wealth—hence different rules for them and us.

If the dream is to simply own one’s own home, eat at restaurants and take an annual vacation to Palm Beach, then the dream is still alive. One should remember, though, that this dream has always depended on the good will of the bosses to provide a job, a dependency that makes us all vulnerable and at risk of suddenly becoming poor—a rather unpleasant dream, when you really think about it. It forces us to make disagreeable compromises and sacrifices in order to keep those jobs and keep our bosses happy so they won’t lay us off or, if they do, so they will still write us nice letters of recommendation.

Furthermore, by accepting these jobs we also tacitly accept and promote capitalist class hegemony since our labor is the source of their wealth. Even those with “good jobs” are in this bind. Consider professional athletes (and the overwhelming public disgust they garner when they go on strike). Despite the millions that the highest paid athletes earn, they are still employees and, like us, potentially only an injury away from the unemployment line. Thus, they, too, are dependent on the good graces of their bosses.

The American Dream is (and always was) a clever piece of propaganda that promoted hard work and obedience in the present, by tantalizing workers with the hope of reaching easy street in the future.

The Impending Demise of Unions

In honor of the one-year anniversary of Modern School I am reposting some of my favorite articles from the past year. While some of the details in the following article are evolving (e.g., the specific attacks on workers and the ever changing rogue's gallery of pundits and politicians), the basic premise still holds: that unions are facilitating their own demise through ineffectual and collaborationist strategies and tactics.

The Impending Demise of Unions

Huck/Konopacki Labor Cartoons

 With virtually every state facing large budget deficits (and governors pledging not to raise taxes or do anything that might harm the interests of business), programs must be cut and workers must be further squeezed. The problem for state governors is that their workers, the ones whom they must squeeze in order to shrink their deficits, are organized into unions that could make things messy if they were to suddenly strike or take some other form of mass action, especially if they unite with private sector workers.

To prevent this from happening, public sector workers are being set up as straw men. They are portrayed as overpaid, greedy brats who are responsible for the deficits and everyone else’s stagnating standard of living. Both Republican and Democratic politicians are jumping on the bandwagon. Below are just a few examples:

• Arizona, Nevada, North Carolina: These are among the many states that do not allow collective bargaining by public sector workers
• California: Governor Jerry Brown plans to make deep cuts to public worker benefits and pensions
• Illinois: Lawmakers are considering legislation to ban teacher strikes. Mayor Daley supports the ban.
• Indiana: Governor Mitch Daniels ended collective bargaining for state workers with an executive order. At the same time, legislators also want to ban private sector unions from requiring dues from their members.
• Michigan: Governor Rick Snyder received a request from the city of Hamtramck to file for bankruptcy so they can shred union contracts and impose wage and pension cuts. Other cities are reportedly planning to follow suit if Hamtramck succeeds.
• Missouri: Governor Matt Blunt issued an executive order banning collective bargaining by state workers. Rep. Loanne Ridgeway said, “No workers should be forced to join unions. Workers should not be held hostage by unions.” Like in Indiana, legislators also want to ban private sector unions from requiring dues from their members.
• New York: Governor Andrew Cuomo is planning to impose a one-year freeze on public sector wages. He also will allow the layoff of 900 state workers ordered by his predecessor David Paterson and he has refused to extend the millionaire’s tax
• New Jersey: Governor Chris Christie wants teachers to accept a 1-year wage freeze and to pay 1.5% of their salaries toward health care costs. “I want to believe the teachers unions when they put on all those commercials saying it’s all about the kids. When you’re getting everything you want, it’s easy to say it’s all about the kids.” State Senate President Steve Sweeney, (who moonlights as an organizer for the International Association of Ironworkers), has been pushing for pay and benefits cuts for state workers and blames them for the 40% unemployment rate of Jersey ironworkers.
• Ohio: Legislators want to ban teacher strikes and block homecare workers from organizing. Ohio Governor John Kasich has said, “Binding arbitration is unacceptable. . .If they want to strike, they should be fired. . . They've got good jobs, they've got high pay, they get good benefits, a great retirement. What are they striking for?"
• Pennsylvania: An organization called Stop Teacher Strikes in Pennsylvania is soliciting signatures for two House Bills (1369 and 2092) that would constitutionally ban teacher strikes in that state. State Rep. Paul Clymer is a co-sponsor of the legislation.
• Wisconsin Governor Scott Walker wants to strip the right of public workers to form unions and collectively bargain.

Why the Increasing Attacks On Public Sector Workers?

Republicans are claiming that unions have become too powerful and must be reigned in, which is simply not true. Labor has grown significantly weaker over the past fifty years, with union membership in steady decline since the 1950s, when over 30% of American workers were unionized. Today only 12% are unionized, the majority in the public sector. Furthermore, they begin with the asinine assumption that unions lower wages, job availability and living standards. If this were true, unions would wither away on their own, without help from the bosses. To see the absurdity of this assumption, one need only compare average wages in heavily unionized states with those in “right to work” states.

Likewise, the claim that public sector workers have it too good, that their benefits are too generous and a rip-off to the poor taxpayers, is just a diversion to distract us from the real causes of the economic meltdown and growing deficit: corporate greed, protracted wars, Wall Street bailouts, extended tax cuts for the wealthy, and nominal corporate taxes.

Some have argued that the crackdown on unions is punishment for the millions of dollars unions spent to defeat Republican candidates. If so, then why are Democrats like Jerry Brown and Andrew Cuomo, who owe their electoral victories to the vast amounts of money spent by unions on their behalf, also attacking unions?

Silly Assumptions Yield Absurd Conclusions

The left also base their arguments on some silly assumptions, like the idea that everyone should have the right to organize or strike or that we can vote into office representatives who will protect our interests. These assumptions ignore the fact that the state exists to serve the interests of capital, not labor. Voting simply gives workers the opportunity to choose who will exercise state power over them. Some politicians try to portray themselves as the more benign and beneficent of the choices. Hence, Jerry Brown, with a violent anti-labor background (as Oakland Mayor, he called in the cops to brutally suppress an ILWU protest) was transformed into an acceptable “pro-labor” choice for governor (compared to the vitriolic and unabashedly anti-labor candidate, Meg Whitman). Labor chose Brown and the union bureaucrats will bend over backwards to help Brown impose austerity on their members.

Huck/Konopacki Labor Cartoons

The ruling class depends on our labor and our cooperation to keep their businesses profitable. The state assists them in this by ensuring that things run smoothly and with minimal disruption, sometimes with laws that seem counter to their interests (e.g., child labor, minimum wage, and overtime laws). If we as workers place our trust in the state to protect us with such measures, then we will continue to accept the lesser evil each election cycle, which means we will continue to vote for our class enemies, rulers who will always place the interests of our bosses over our own. Hence, teachers who supported Obama were rewarded with Race To The Top. And their support for Jerry Brown will be rewarded with multi-billion dollars cuts to the education budget in California and subsequent lay-offs, furloughs and pay and benefits cuts, facilitated by the pinstriped bosses of the NEA and AFT.

Likewise, it is not in the interests of the ruling elite to have unions or strikes and, for much of U.S. history, they made sure that unions did not have the right to strike or to collectively bargain. It should be pointed out that strikes still occurred. In fact, these rights were granted in 1934, with the National Labor Relations Act (NLRA), in response to protracted militant (and illegal) strikes, including several general strikes that effectively shut down the cities of San Francisco and Minneapolis. The right to strike was granted (along with strict rules governing how and when strikes could be conducted) as a means to control workers and minimize labor unrest so as to minimize the impact on business. This right was not a god-given inalienable right, nor was it one that workers won through the vote. It was a stopgap measure imposed by the state, on behalf of the ruling elite, so as to keep the economy running smoothly, a bone that was thrown to labor to get them to quiet down and behave. What the state giveth, the state can taketh away, as so many states are now trying to do. And what workers lose legislatively can be won back by misbehaving (i.e., illegal strikes and job actions).

The Impending Demise of Unions

Of course, the real reason for the growing attacks on public employee unions is that the ruling elite want no restraints whatsoever to their ability to make profits. Their greed and misbehavior created the biggest economic crisis in generations and they were punished with a multi-trillion dollar gift from the federal government. As a result, they have grown cockier than ever. There has been no New Deal. No significant new regulations or limits to their business practices. They want it all, they want it now, and they have no reason believe they won’t get it.

To this end, they would love nothing more than to destroy all vestiges of organized labor and they see public workers as the biggest impediment to this goal. When the wages and benefits of public sector workers are lowered, those of private sector workers follow suit. When one group of workers loses union protections, it weakens all workers by limiting their ability to take job actions in solidarity with each other.

Meanwhile, how are the few remaining unions dealing with the escalating class war? Most have relinquished their most important role of organizing, educating and mobilizing workers, so they can play the election game:

• Choose the lesser evil
• Sell him or her to their members
• Accept the impending job, wage and benefits cuts
• And then try to spin it as a victory by claiming that the alternative would have been much worse

The consequences of this game are that wages, benefits and living standards continue to decline for the vast majority of us, while the wealthy continue to grow wealthier. Concessions given by workers are almost never given back, not without a fight. So why give the concessions in the first place, especially without a fight? 

Unless unions start to acknowledge that bosses and workers have nothing in common, that politicians are not our allies, and start to prioritize organizing and mobilizing their members, they will facilitate their own demise.

Permanent War, Permanent Recession

The British economy grew by only 0.5% in the first quarter of 2011 and contracted by 0.5% the quarter prior, the WSWS reported today, causing many to concede that Britain is teetering on the edge of a “double dip recession.” The situation in the U.S. was not much better, with anemic first quarter growth of only 1.8%, following a decline of 3.1% the previous quarter.

If these numbers don’t sound worrisome enough, consider that the average time an American worker stays unemployed is now 39 weeks—the longest period on record. This has been especially hard on youth (ages 16-24), whose jobless rate was 18.4% last year—also a record high. Or consider this: Real earnings in the UK have contracted in each of the past four years, something the British haven’t seen since the 1870s, with household incomes predicted to decline another 2% this year.

Despite record corporate profits, U.S. business has refused to increase hiring. Business investment last year was 15% lower than before the financial crisis began, according to the WSWS. The profits have come from downsizing, speed-ups and wage cuts, not from expanding markets. The Fed’s solution has been to keep interests rates close to zero and loan billions of dollars to U.S. businesses, creating turmoil in international financial markets. The WSWS says that this turmoil has led to warnings by international finance capitalists that there is no prospect of pre-crisis conditions returning, and has increased their demands for further austerity for the working class. In other words, the current financial “crisis” is not just a cyclical downturn, but the beginning of a deliberate large-scale restructuring of socioeconomic relations set at returning working and middle class living standards to pre-Great Depression levels.

Meanwhile, the U.S. and its allies are engaged in numerous wars that may truly be endless. While these wars are costing the U.S. trillions of dollars (Joseph Stiglitz believes the Iraq war, alone, will cost the U.S. over $3 trillion by 2017) at a time when the government is crying poverty and threatening to slash social spending, the true costs of these wars in terms of civilian injuries and deaths, environmental contamination, loss of income, stress, PTSD and overall human suffering are immeasurable (and seemingly unimportant to most Americans). Immediately ending the wars in Iraq and Afghanistan (not to mention those in Pakistan, Libya and elsewhere) is the necessary first step toward alleviating all of this misery (and the U.S. federal deficit). However, this is unlikely to ever occur, as there is no President who wants to be known as the quitter who “lost” Suchandsuchastan. News footage of angry mobs torching the U.S. embassy, as U.S. troops flee into waiting helicopters to be airlifted to safety, is sure to turn voters against the president who gives those orders, as well as his entire party.

This is good news for business as it means continued taxpayer subsidies for private military contractors and arms dealers and protection for petroleum producers. It also means the government can continue crying poverty, making it much easier to justify austerity for working people and to transfer wealth to the rich.

Unions, What Are They Good For?

Huck/Konopacki Labor Cartoons

The WSWS reports that the big three automakers, after slashing 250,000 jobs and receiving billions of dollars in taxpayer bailout money, scored record profits in 2010 of $11 billion, due primarily to declining wages, factory speedups and downsizing. The big three are now planning to hire 35,000 new workers. With the full complicity of the United Auto Workers (UAW) who negotiated a sell-out contract, new hires will be paid less than $15 per hour, less than half the traditional wages of auto workers and many will be hired as temporary workers who can be fired at will.  The two-tiered contract also slashed existing employees’ wages.

A Union Loved By Bosses Is A Useless Union

The big three weakened the UAW (and increased profits) by shipping thousands of jobs overseas, resulting in high unemployment and declining wages in Michigan. Now, with a large army of unemployed workers desperate for a steady income, the big three can start hiring locally again, but this time at low wages, and still remain competitive with foreign auto producers. The U.S. has so decimated its labor movement that its labor force has become attractive to European companies seeking to increase their profits. Fiat, for example, is planning on shifting production of several models to North America in order to lower production costs, with a resulting loss of 16% to its domestic workforce in Italy. Fiat/Chrysler CEO Sergio Marchionne said, “It’s a pleasure to negotiate with U.S. trade unions,” indicating that the UAW has served the interests of capital well, not labor.

A strong union should be feared and despised by the bosses, not loved or enjoyed, and it should help drive up wages and working conditions locally and abroad, not lower them. Consider that the Mirafiori Fiat plant near Turin forced its employees to accept dramatic rollbacks by threatening to ship even more production to the U.S., where labor is cheap (see Reuters, “Fiat’s Italian Investment Rests on Union Vote”). The new Mirafiori contract forbids workers from striking, forces 10-hour work shifts and triples mandatory overtime.

Stockholm Syndrome: Union Leaders Who Love Bosses

UAW President Bob King said “Relationships with Marchionne are extremely positive, we believe in him a lot,” reports the WSWS. Of course, union bosses and capitalist bosses have a symbiotic relationship not shared by workers. The union bosses want to maintain their jobs and their six-figure salaries and their opportunities to hob nob with politicians, philanthropists and wealthy liberals. This can only happen if their unions continue to exist and continue to funnel members’ dues into their coffers. Capitalists like Marchionne are only too willing to allow this so long as the union leaders serve as their bulldogs and enforce their demands on the workers.

This can be seen in a resolution passed last month by the UAW bargaining convention (quoted in the WSWS) which said “In order to promote the success of our employers, the UAW is committed to innovation, flexibility, lean manufacturing, world best quality and continuous cost improvement… We are moving on a path that no longer presumes an adversarial work environment with strict work rules, narrow job classifications or complicated contract rules.” In other words, the union agrees to enforce factory speedups, increased productivity, downsizing and anything else that will increase profits, regardless of how that affects working conditions and wages.

Of course it is not really a Stockholm Syndrome. The union bosses are not being held captive by the capitalist bosses. They are birds of a feather. Consider that the UAW has assets of $1.13 billion, according to the WSWS, paying out $3.4 million to its top 24 officers, who earned an average of $142,000 last year, plus another $80 million salaries and perks for 1,000 staff members who also averaged more than $100,000 each.

The relationship between the UAW and other mainstream unions with their members is a dysfunctional codependent relationship that is detrimental to the interests of workers. In the name of “saving jobs” or “collective bargaining” the unions continue to keep their members dependent on them, while whittling away at wages and working conditions for the benefit of the bosses. The unions, thus, are complicit in the downward spiral of living conditions that has plagued the majority of Americans for the past forty years (e.g., the minimum wage in 1968 had 25% more buying power than it does today, while the purchasing power of the average 1972 wages was higher than today’s average wages).

Many argue that unions continue to provide a few important services, like fighting for members’ due process rights. However, when we look at the bigger picture, it is clear that many unions have actually become workers’ class enemy, as they give away more and more wage and benefits concessions and contribute to workers’ pauperization. What use are rights when one cannot afford rent, mortgage, healthcare or nutritious food? What use is due process if it just keeps one in a job that is dangerous and abusive and that barely (or doesn’t even) pays bills? Why fight for collective bargaining if it is only used to win contracts with declining pay and benefits?

Class War: Tax Breaks for The Wealthy Vs. Service Cuts for the Poor

From Center for American Progress

Michigan: Crush the Unions and the Unemployed!

Michigan Worker? (Image by AlexStaubo)

Michigan has become the first state in the U.S. to cut unemployment benefits below the 26-week standard set by the federal government. Starting in January, 2012, unemployed workers will only be able to collect benefits for 20 weeks, according to the WSWS. With 44% of unemployed workers out of work for more than six months, and the average unemployed worker requiring nine months to find a new job, this move is a vicious attack on working people.

Michigan has had an unemployment rate of more than 10% for over two years now and the situation is not likely to improve any time soon. Consequently, they will likely see dramatic increases in homelessness and hunger. Many unemployed workers will be forced to accept dangerous, mind numbing, or abusive working conditions for low wages just to be able to stay in their homes. Those lucky enough to have union jobs will start to feel increasing pressure to accept more cuts to their pay and benefits or risk losing their jobs to the increasingly desperate long-term unemployed. Those who choose to go on strike will find a ready army of scab strike breakers willing to cross the picket line for a chance to earn some money.

Yet again, the unions, by their refusal to take a militant stance, are contributing to their own demise.