The Attack on the Middleclass

The Middleclass, the engine of economic growth, the explosion of invention, and the progress of our societies, both materially and morally, has been under direct attack by neoliberals and neoconservatives for decades who have managed to achieve unprecedented economic growth and wealth while incomes stagnated for the majority that produced it.

Without the Middleclass there can be no social mobility. You are either poor or rich, with the illusion of mobility created by lotteries and celebrity. The chosen and lucky few get to live in the heavens while the rest suffer in hell to support them. It is a lie as old as humans.

The larger the middleclass is, the less the social inequality and fewer the mental and social problems that stem from it.

There will always be some portion of society that does better and some that does worse. The goal is to make sure that even those at the bottom can survive and that as many as possible can do better.

Social class doesn’t determine moral quality, choice and action do.

The rich blaming the poor for poverty is simply blaming the victims, the typical method of evil to distract from its own culpability.

Unions were created by the workers to give their needs expression against the powerful voices of corporations and governments. They have sacrificed and even died to earn the rights and protections that provide a living wage, in as safe an environment as possible for the job. Unions had to fight for the basic respect we all deserve. No one gave it to us and tyrants will take it back if we allow them. 

Our country is a union. All democracies are. Our taxes are our dues for benefits, and every citizen is an equal member.

 

The following is a re-posting of an article from the Toronto Star, about how the attack on unions is an attack on us all.

Is decline of unions leading to decline of middle class?

Published on Friday August 31, 2012

Barry Philip/Toronto Star A Toronto Labour Day parade in 1967, a time when unions were strong. In the U.S., 28 per cent of workers belonged to a union in 1968; by 2010 the number had dropped to 12 per cent.

 

By Antonia Zerbisias Feature Writer 

If the grand ballroom at this Toronto hotel were a barn, it would have burned to the ground last month during the Canadian Auto Workers convention. 

That’s because CAW president Ken Lewenza was so full of fire and brimstone that, at one time, he actually gasped, “Is there a nurse in the house?”

It was a joke. Sort of. Up there on the big screen, his face was turning an alarming shade of red.

Down on the convention floor, the 500 assembled delegates were stomping their feet with approval, raising their fists in solidarity.

“Why are workers fighting the fights of the 1930s again?” he roared, rattling off grievance after grievance against the Harper government, corporate media and big business. 

Closed-door meetings with CEOs, back-to-work legislation, cuts to public service, the raising of the retirement age, allowing in more foreign workers, talk of U.S.-style “right-to-work” legislation, which weakens unions, few labour voices in the news media. . 

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“Every day I wake up on the wrong side of capitalism,” Lewenza declares. “And every day I wake up knowing there are more people with me. Enough of us are waking up to fight back.”

The country’s largest private-sector union is ready to go to war to restore the hard-won labour rights it says are being stolen from working people. Lewenza’s battle cry will be echoed on shop floors and at bargaining tables.

Organized labour is getting organized again.

The evidence is just about bulletproof: When union membership thrives, so does the middle class.

Over the past 18 month, studies by Harvard University, the non-partisan Center for American Progress (CAP), the union-backed Economic Policy Institute (EPI) in Washington, D.C., and the Pew Research Center, also in Washington, have shown an incontrovertible correlation between the rate of unionization and the percentage of the nation’s total wealth held by the middle class.

As unions picked up members through the first 70 years of the last century, the gap between rich and poor narrowed. As unions were weakened by free-trade agreements, globalization and anti-labour legislation since the 1980s, the gap goes off the charts. 

“It’s been documented over and over,” insists EPI president Lawrence Mishel. “There are a lot of people who didn’t used to appreciate the importance of unions who now do.”

In the U.S., the drop in the well-being of the middle class — usually defined as the middle 60 per cent of households in terms of income — has been precipitous.

In 1968, when 28 per cent of workers were unionized, the middle class claimed 53.2 per cent on the nation’s income, according to the CAP. In 2010, union membership had plummeted to 12 per cent, while the middle-class share of income dropped to 46.6 per cent.

Meanwhile, the proverbial “1%” saw its share more than double, from 9 per cent in 1974 to 23 per cent in 2007.

Last month, Pew reported the middle class is struggling to maintain its standard of living.

Meanwhile, CEO salaries are skyrocketing, states the Washington-based Institute for Policy Studies (IPS). Last year, 25 of the top 100 U.S. corporate leaders received more in their paycheques — $20.6 million on average — than their companies paid in taxes, and that includes companies that got government bailouts.

As for the top 50 “layoff leaders” — those companies that fired the most workers — their CEOs averaged almost $12 million a year in salary.

In Canada, the disparity is not nearly so dramatic: “Union density” has dropped to 31.5 per cent in 2010 from 37.6 per cent in 1981, with most of that fall-off in the private sector.

But it’s not all good news for workers.

During that time period, “a rising share of the gains from economic growth went to higher corporate profits and elite pay-packages,” says the Canadian Centre for Policy Alternatives. 

“In fact, the richest 1 per cent of Canadians took a stunning one-third of all income gains between 1997 and 2007. That compares to 8 per cent in the 1960s.

“Today, CEO pay packages swell by double-digit increases every year — in good times and bad — even while Canada’s bosses put downward pressure on wages, pensions and benefits.”

In July, the Organization for Economic Cooperation and Development (OECD) released its employment outlook, which revealed that Canadian labour’s share of national income has dropped by almost 10 per cent since 1990, while corporations have been stockpiling profits. 

As Bank of Canada Governor Mark Carney told last month’s CAW convention in a controversial speech, that’s more than half a trillion in “dead money,” almost enough to wipe out Canada’s $602-billion debt.

“Governments have given all this money to corporations on the assumption that they would invest it but it’s just added to this stockpile of corporate cash,” remarks United Steelworkers union economist Erin Weir, president of the Progressive Economics Forum.

“It would be better for the economy if the government retained some of that money and invested it or if unions were able to negotiate better pay increases and get some of that money in consumers’ pockets.”

It was Henry Ford who built an empire based on his realization that, if you pay workers decent wages, not only do they stay and reduce training costs while improving productivity, they have the money to buy the cars they assemble. 

So, at the CAW convention last month, the Canadian Labour Congress (CLC) put a dollar figure on the “union advantage” that higher wages give the economy. 

On average, Canada’s 4.5 million organized workers earn $5.11 more per hour than non-union workers, it said, adding up to about $793 million per week. All of this, insists the CLC, goes right back into the Canadian economy. In Toronto, that translates to $4.59 per hour more for unionized workers, about $91 million more per week.

“Globalization has taken (Ford’s) mantra away,” says Ken Georgetti, president of the 3.3-million member CLC. “We have a much higher disparity in wealth coming. The people who are benefiting from that are making themselves filthy rich and the rest of us are actually getting poorer.”

“Nothing can be further from the truth,” says Niels Veldhius, president of the conservative Fraser Institute. “In fact, the rich are getting poorer and the poor are getting richer. That’s the story. 

“Inequality completely ignores mobility. The reality is, we have a substantial amount of mobility. Almost nobody who is now in the bottom 20 per cent today will be there 10 years from now. And the same thing with the top 20 per cent. A significant portion of those people in the top 20 per cent won’t be there 10 years from now.”

In the United States, so-called “right-to-work” legislation in 23 states has been blamed for much of the weakening of the union movement.

Such laws prevent collective-agreement clauses that require every worker in a company to pay union due, even if that worker enjoys the benefits of collective bargaining. Critics say the legislation keeps unions from getting the necessary funding to hire economists, lawyers, pension analysts and other experts needed to negotiate better wages and benefits. It results in companies being able to dictate salaries and terms of employment, they charge.

Based on the University of New Mexico’s Bureau of Business and Economic Research statistics, 21 of the 23 right-to-work states have per capita incomes below the 2011 U.S. average of $41,600 per year.

Coincidentally or not, Indiana became a right-to-work state the day before the Caterpillar plant in London, Ont., shut down and moved to Muncie.

In Canada, workers in unionized environments aren’t allowed to opt out of dues-paying, even if they hate organized labour. But pro-business factions here are starting to rumble in favour of right-to-work laws.

“Income growth is higher in right-to-work states; investment is higher in right-to-work states,” explains Veldhuis. “If these laws are so terrible, why would people be voting with their feet for states that have implemented these right-to-work laws?

“Businesses want to invest in jurisdictions where policies are conducive to business investment,” he continues. “That’s why people want to move where there are jobs, where there’s actually business investment occurring and where income is going up. That’s why you want to have balanced labour laws.”

York University’s David Doorey, a professor of labour law, dismisses that argument: “The right-to-work debate is a political one, not economic. It’s about trying to weaken the labour movement by making it more difficult for unions to collect their revenues so they are less effective in advocating for workers and voicing political dissent. For every study that suggests right-to-work laws create jobs, there’s another finding the exact opposite. Politicians just cherry-pick those that fit their political agenda.”

And picking they are, as Ontario citizens saw in June with the introduction of “workers’ choice” legislation by Ontario PC labour critic Randy Hillier. The Defending Employee’s Rights Act (Collective Bargaining and Financial Disclosure by Trade Unions) aims not only to remove union membership requirements but also to force unions to fully disclose how and where all the dues get spent.

“Over 300,000 manufacturing jobs have left Ontario, many for more choice-friendly jurisdictions,” Hillier said at the time. “Alberta, Saskatchewan, Texas, North Carolina and Indiana are growing, their GDP and employment rates are growing. We aren’t.”

“That’s why Ontario is losing business investment,” posits Veldhuis. “Ontario has all these negative shocks, external shocks. The high dollar. The general decline in manufacturing. But (Ontario’s) government has done nothing to mitigate that. They’ve done everything to exacerbate it. Bad labour policy. Bad fiscal policy. Bad tax policy. Bad trade policy. Bad energy policy. One policy after another that prevents companies from wanting to invest in Ontario. That’s why you’re seeing skilled and educated workers coming out West. Labour policy is one part of getting the right framework.”

“The idea that there are loads of businesses that would rush to Canada if only they didn’t have to collect dues on behalf of unions is silly,” says Doorey. “We need only look at Walmart and Target, two of the world’s most anti-union companies, both flocking to Canada, without concern for our labour laws. They know what Tim Hudak is pretending not to: that it’s virtually impossible under our existing labour laws for private-sector workers in Ontario today to unionize and bargain decent collective agreements.”

Unions are not only under attack from conservative politicians and corporate chiefs. Even middle-class workers are turning on each other. This despite how unions float the proverbial boat for everybody.

There are calls for the privatization of government services, grumbles about historical gains made by collective bargaining, complaints about “union bosses,” “jobs-for-life” and “gold-plated pensions,” all amplified through the media.

“I think that times of persistent high unemployment just get ugly,” says Mishel, from his Washington office. “It becomes easier to turn worker against worker.”

“One of the amazing things to come out of the financial crisis was how quickly the blame was shifted away from the financial sector that was actually responsible on to public-sector unions, which really had nothing to do with causing the crisis,” agrees Weir.

Georgetti laments how unions have lost control of the message in a survivor-dominated, backstabbing, everybody-for-themselves climate.

“Although our incidence of labour disputes is really low, our opponents suggest that the public thinks it’s really high,” he says. “Our productivity is much higher in unionized workplaces than in non-unionized workplaces. But I don’t think the public would buy that. We are being framed in a way that makes people resent us. It’s continuous in the media. So the public only gets one view.

“We are going to have a lot of work on how we present ourselves to the public so that they understand what we do rather than buy the frame that others are putting on us.”