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Republicans Criticize Government Spending Unless It Lowers Our Wages

Friday, 05 April 2013 10:14 By Dave Johnson, Campaign for America's Future | News Analysis

Republicans criticize government spending when it is about making our lives better. Of course, by definition all government spending is done to make our lives better. (In a democracy government spending is We, the People deciding how and where to spend the money. Would we decide to spend money to make our lives worse?) In a plutocracy, though, it’s a very different story.

If you live in Wisconsin, for example, your tax dollars are used to help drive down your wages – and everybody else’s.

The Washington Post has the story: Wis. taxpayers spend close to $850,000 for lawyers to defend restrictions on public unions,

Wisconsin taxpayers have spent close to $850,000 defending lawsuits over Republican Gov. Scott Walker’s 2011 law that all but ended collective bargaining for most public workers.

 

And the lawsuits aren’t over yet.

Ending collective bargaining means ending the right of employees to band together so they have collective power. Instead of individuals coming to the boss and saying, “Please throw me a crumb if you feel like it,” with a union it’s all of the workers, together, saying “Let’s talk about how we can work together to grow this business for all of us.”

Who Benefits From Low Wages And Restrictions On Unions?

Ending collective bargaining and other restrictions on unions are about one thing and one thing only: driving down the wages and benefits that working people receive. And when you do that, see if you can guess what happens. From the post 40% Of Americans Now Make Less Than 1968 Minimum Wage,

The chart shows that wages used to go up as productivity went up, but in the 1970s they decoupled. Productivity kept going up but wages stagnated.

That is what happened when trade agreements broke the ability of unions to ask for a fair share of the proceeds. Businesses started moving jobs out of the country to low-wage, “business-friendly” non-democracies, and said to people who wanted raises “shut up or we’ll move your job out of the country, too.” This “decoupled” productivity increases from potential wage increases.

So the benefits of our economy started going to just a few people, instead of being spread around. The post, Is This Where The (Middle-Class) Money Went? tells that story:

Now, here’s another chart. This chart shows that financial-sector and non-financial-sector compensation used to rise together, but in the late 70′s / early 80′s they decoupled. Financial-sector compensation took off, while non-financial-sector compensation did not.

Race To Bottom

The problem isn’t just Wisconsin by any means. In Michigan Races To Bottom With Anti-Union Law I explained, (“lectured,” my wife says. “Shut up,” I mansplained.)

Pay attention to what is happening in Michigan, because it will add even more downward pressure to your wages and benefits, wherever you live and work. Republicans in the Michigan legislature have rammed through anti-union “right-to-work” laws making union dues voluntary even as unions a required by law to provide services to members and non-members. They say this will make Michigan more “business-friendly” by driving down wages and benefits, thereby stealing jobs from states where working people have rights. The actual intent is to get rid of the unions altogether, and their ability to fight for the 99% in theongoing class war with the 1%.

From this week’s post, Obama Shouldn’t Buy The Lower-Corporate-Taxes Line,

Downward Spiral

Imagine states A and B. State B cuts their tax rates and passes laws that restrict unions, keep minimum wages low and other wage-lowering measures to “attract businesses” and their jobs from state A. As successful as state B might be at getting companies to move there, what is the effect on the larger economy of all of the states? Obviously the overall wages in the larger economy will fall as the same jobs move to a state with lower pay. And even the jobs that remain in state A are under pressure to reduce their wages, with the employers threatening to move their companies to state B as well.

And the government of state A has less revenue to fund their schools and courts and infrastructure, while the government of state B sacrificed revenue to make their state more attractive. So the overall level of investment in public goods also drops.

By reducing standards State B is undercutting the ability of the people in state A to control the companies in state A. State B has enabled companies to extort lower wages and other advantages elsewhere. State B is undercutting State A’s ability to be an effective democracy.

This is what is happening around the world as these giant companies put the squeeze on governments, with the threat to just go somewhere else. This is what happens when corporate power is allowed to reach such a level that it challenges the power of governments to control them. Originally the corporations We the People enabled in order to accomplish things that are good for US have changed into a force with enough wealth and power that instead of providing good jobs and goods and services, they instead demand we pay them tribute.

So as the country converts from democracy (representative government for you nitpickers) to plutocracy, we should expect more of this. Or, alternatively, we can get corporate money back out of our politics, out of the think tanks, etc., and back into the corporations where it is only used to run the business. And then we can try to remember what a democracy is supposed to be like — where we do things to make our lives better.

This piece was reprinted by Truthout with permission or license. It may not be reproduced in any form without permission or license from the source.

Dave Johnson

Dave Johnson (Redwood City, CA) is a Fellow at Campaign for America's Future, writing about American manufacturing, trade and economic/industrial policy. He is also a Senior Fellow with Renew California.

Dave has more than 20 years of technology industry experience including positions as CEO and VP of marketing. His earlier career included technical positions, including video game design at Atari and Imagic. And he was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.


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Republicans Criticize Government Spending Unless It Lowers Our Wages

Friday, 05 April 2013 10:14 By Dave Johnson, Campaign for America's Future | News Analysis

Republicans criticize government spending when it is about making our lives better. Of course, by definition all government spending is done to make our lives better. (In a democracy government spending is We, the People deciding how and where to spend the money. Would we decide to spend money to make our lives worse?) In a plutocracy, though, it’s a very different story.

If you live in Wisconsin, for example, your tax dollars are used to help drive down your wages – and everybody else’s.

The Washington Post has the story: Wis. taxpayers spend close to $850,000 for lawyers to defend restrictions on public unions,

Wisconsin taxpayers have spent close to $850,000 defending lawsuits over Republican Gov. Scott Walker’s 2011 law that all but ended collective bargaining for most public workers.

 

And the lawsuits aren’t over yet.

Ending collective bargaining means ending the right of employees to band together so they have collective power. Instead of individuals coming to the boss and saying, “Please throw me a crumb if you feel like it,” with a union it’s all of the workers, together, saying “Let’s talk about how we can work together to grow this business for all of us.”

Who Benefits From Low Wages And Restrictions On Unions?

Ending collective bargaining and other restrictions on unions are about one thing and one thing only: driving down the wages and benefits that working people receive. And when you do that, see if you can guess what happens. From the post 40% Of Americans Now Make Less Than 1968 Minimum Wage,

The chart shows that wages used to go up as productivity went up, but in the 1970s they decoupled. Productivity kept going up but wages stagnated.

That is what happened when trade agreements broke the ability of unions to ask for a fair share of the proceeds. Businesses started moving jobs out of the country to low-wage, “business-friendly” non-democracies, and said to people who wanted raises “shut up or we’ll move your job out of the country, too.” This “decoupled” productivity increases from potential wage increases.

So the benefits of our economy started going to just a few people, instead of being spread around. The post, Is This Where The (Middle-Class) Money Went? tells that story:

Now, here’s another chart. This chart shows that financial-sector and non-financial-sector compensation used to rise together, but in the late 70′s / early 80′s they decoupled. Financial-sector compensation took off, while non-financial-sector compensation did not.

Race To Bottom

The problem isn’t just Wisconsin by any means. In Michigan Races To Bottom With Anti-Union Law I explained, (“lectured,” my wife says. “Shut up,” I mansplained.)

Pay attention to what is happening in Michigan, because it will add even more downward pressure to your wages and benefits, wherever you live and work. Republicans in the Michigan legislature have rammed through anti-union “right-to-work” laws making union dues voluntary even as unions a required by law to provide services to members and non-members. They say this will make Michigan more “business-friendly” by driving down wages and benefits, thereby stealing jobs from states where working people have rights. The actual intent is to get rid of the unions altogether, and their ability to fight for the 99% in theongoing class war with the 1%.

From this week’s post, Obama Shouldn’t Buy The Lower-Corporate-Taxes Line,

Downward Spiral

Imagine states A and B. State B cuts their tax rates and passes laws that restrict unions, keep minimum wages low and other wage-lowering measures to “attract businesses” and their jobs from state A. As successful as state B might be at getting companies to move there, what is the effect on the larger economy of all of the states? Obviously the overall wages in the larger economy will fall as the same jobs move to a state with lower pay. And even the jobs that remain in state A are under pressure to reduce their wages, with the employers threatening to move their companies to state B as well.

And the government of state A has less revenue to fund their schools and courts and infrastructure, while the government of state B sacrificed revenue to make their state more attractive. So the overall level of investment in public goods also drops.

By reducing standards State B is undercutting the ability of the people in state A to control the companies in state A. State B has enabled companies to extort lower wages and other advantages elsewhere. State B is undercutting State A’s ability to be an effective democracy.

This is what is happening around the world as these giant companies put the squeeze on governments, with the threat to just go somewhere else. This is what happens when corporate power is allowed to reach such a level that it challenges the power of governments to control them. Originally the corporations We the People enabled in order to accomplish things that are good for US have changed into a force with enough wealth and power that instead of providing good jobs and goods and services, they instead demand we pay them tribute.

So as the country converts from democracy (representative government for you nitpickers) to plutocracy, we should expect more of this. Or, alternatively, we can get corporate money back out of our politics, out of the think tanks, etc., and back into the corporations where it is only used to run the business. And then we can try to remember what a democracy is supposed to be like — where we do things to make our lives better.

This piece was reprinted by Truthout with permission or license. It may not be reproduced in any form without permission or license from the source.

Dave Johnson

Dave Johnson (Redwood City, CA) is a Fellow at Campaign for America's Future, writing about American manufacturing, trade and economic/industrial policy. He is also a Senior Fellow with Renew California.

Dave has more than 20 years of technology industry experience including positions as CEO and VP of marketing. His earlier career included technical positions, including video game design at Atari and Imagic. And he was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.


Hide Comments

blog comments powered by Disqus