Working Notes: On trust at work, income inequality, and the fate of U.S. democracy

Dear readers, here are three studies worthy of our attention:

1. APA Work and Well-Being Survey

The American Psychological Association’s 2014 Work and Well-Being Survey reveals that a lot of American workers distrust their employers. Here’s a brief summary from Good Company, the newsletter of the APA’s Center for Organizational Excellence:

Despite the rebound in the U.S. economy and an improving job market, nearly one in four workers say they don’t trust their employer and only about half believe their employer is open and upfront with them, according to the American Psychological Association’s 2014 Work and Well-Being Survey released today.

While almost two-thirds (64 percent) of employed adults feel their organization treats them fairly, one in three reported that their employer is not always honest and truthful with them. “This lack of trust should serve as a wake-up call for employers,” says David W. Ballard, PsyD, MBA, head of APA’s Center for Organizational Excellence. “Trust plays an important role in the workplace and affects employees’ well-being and job performance.”

2. Thomas Piketty’s Capital

It’s not every day that a tome on economics is rising to the top of the bestseller charts, but French economist Thomas Piketty’s Capital in the Twenty-First Century (2014), an exhaustive study of income inequality in some 20 nations (including the U.S.), is doing just that. Using over a century’s worth of income and tax return data, Piketty provides a thorough, data-driven assessment of how unbridled capitalism has led to huge concentrations of wealth benefiting the super rich.

Piketty’s call for more progressive wealth tax and income tax rates to reverse these deep inequalities may play better in Europe than in the U.S. However, as Jennifer Schuessler reports for the New York Times, he is not calling for the end of capitalism:

…Mr. Piketty, who writes in the book that the collapse of Communism in 1989 left him “vaccinated for life” against the “lazy rhetoric of anticapitalism,” is no Marxian revolutionary. “I believe in private property,” he said in the interview. “But capitalism and markets should be the slave of democracy and not the opposite.”

The book is becoming a sensation within economic and policy circles, with many hailing it as a seminal work toward understanding modern economics. For an extended review essay of Capital by Paul Krugman in the New York Review of Books, go here.

3. Gilens & Page on American Oligarchy

Political scientists Martin Gilens and Benjamin Page have conducted an extensive empirical study confirming what so many have believed through observation of, and participation in, our political system: America is becoming an oligarchy ruled by the wealthy, rather than a democracy in which political power is shared. The BBC did a quick summary:

The US is dominated by a rich and powerful elite.

So concludes a recent study by Princeton University Prof Martin Gilens and Northwestern University Prof Benjamin I Page.

This is not news, you say.

Perhaps, but the two professors have conducted exhaustive research to try to present data-driven support for this conclusion. Here’s how they explain it:

Multivariate analysis indicates that economic elites and organised groups representing business interests have substantial independent impacts on US government policy, while average citizens and mass-based interest groups have little or no independent influence.

In English: the wealthy few move policy, while the average American has little power.

The study (go here for pdf) will be published this fall in Perspectives on Politics.

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Hmm, we’ve got widespread worker distrust of employers, widespread wealth inequality, and widespread differences in political power between the wealthy and everyone else. It doesn’t take much to connect the dots, does it?

Worth watching: Robert Reich’s “Inequality for All”

How much inequality can we tolerate and still have an economy that’s working for everyone and still have a democracy that’s functioning? Of all developed nations today, the United States has the most unequal distribution of income and wealth by far, and we’re surging toward even greater inequality.

-Robert Reich, from “Inequality for All”

If you’re looking for an informative, insightful, and lively take on the challenging question of how the American economy threw the middle class under the bus, Robert Reich’s 90-minute documentary, “Inequality for All,” fits the bill.

Reich is now at UC-Berkeley, teaching courses in economics and public affairs, after many years at Harvard’s Kennedy School and a term as Secretary of Labor under Bill Clinton. A prodigious author, he turns to the documentary form to deftly blend economic data, income trends, political changes, tax policy, and personal stories & interviews. It’s not pure wonkishness; the film also tells us something of Reich’s interesting life story, too, and several segments exhibit his sharp wit and self-deprecating sense of humor.

As is the skill of a gifted lecturer, Reich packs a lot into the documentary in a way that doesn’t overwhelm. You’ll learn about the impact of globalization and technology on American jobs, how lower tax rates on the wealthy have had a negative correlation with overall economic health, and how the U.S. economy in 1928 (the year before the stock market crash that led to the Great Depression) looked eerily similar to that in 2007 (the year before the Great Recession). You’ll also hear a wealthy CEO talk about the destructive aspects of extreme wealth concentration, and you’ll listen to stories of people trying desperately to stay in the nation’s middle class.

I have a few quarrels with the film. For example, I think Reich was a little soft on the reasons behind the virulent anti-union tactics of some American companies during the past few decades. I also believe that he needed to spell out the fuller implications of globalization for workers everywhere.  But I recognize that choices must be made to keep a documentary within a watchable length, and overall it makes very good use of our time.

“Inequality for All” opened in theaters last year, and it is now widely available in various DVD, on demand, and streaming formats. I just watched it this week, and I am happy to recommend it.

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One of the extras in the DVD is deleted footage about Reich’s 2002 campaign for Governor of Massachusetts, in which he made it onto the Democratic primary ballot but did not win the nomination. Reich uses a chunk of the segment to explain how personally difficult it was for him to spend so much of his time chasing down people for campaign contributions.

I volunteered for Reich’s campaign the day I read an announcement of his candidacy, and I served as a Reich delegate at the Democratic state nominating convention. The deleted documentary segment doesn’t fully convey the way in which he attracted a lot of supporters who had felt alienated from party politics in Massachusetts, not to mention the fact that he ran a very respectable campaign despite getting in the race late and operating with a shoestring budget.

The dignity of a living wage

Across America, labor activists and other progressives are calling for a higher federal minimum wage, often citing the personal financial challenges that confront low-paid retail and fast food workers. The current minimum wage is $7.25/hour, though some states have adopted a slightly higher one. Advocates are calling for a new minimum wage ranging from $10.00 to $15.00 an hour.

Whenever a minimum wage hike is proposed or debated, opponents claim that doing so will reduce jobs. At the far end of that spectrum, virulent opponents of any minimum wage law claim that such government mandates are “job killers.”

Yes, I suppose if you got rid of the princely $7.25/hour minimum wage, you could take the same hourly rate and pay three people $2.00/hour and still have a $1.25/hour as a bonus for the CEO. But that’s not “job creation,” it’s exploitation. Take away the minimum wage and you get a labor situation like that in Bangladesh, where wealthy corporations pay factory workers a pittance and subject them to dangerous working conditions. (After all, American factory jobs moved overseas to avoid paying workers good wages and benefits!)

Current minimum wage and low-wage earners often find themselves having to access public benefits such as food stamps to get by. The low minimum wage means, in effect, that American taxpayers are indirectly subsidizing corporations such as Walmart and McDonald’s and their shareholders by supporting living expenses for workers who can’t afford to live on their paltry paychecks alone.

Above all, we need to frame this debate in terms of human dignity. Okay, so maybe that high school senior from an upper middle class family who works part-time to earn spare cash can get by on $7.25/hour. But for those supporting themselves and others, a full-time job at least should pay for the basics. In fact, let’s remember that Congress’s intent behind enacting the federal minimum wage law during the heart of the Great Depression of the 1930s was to provide a living wage. It’s a shame that we have to invoke the hardship of our last systemic economic meltdown to remind ourselves of that.

How about more shout-outs to the labor movement from the White House?

Earlier this week, Vice President Joseph Biden told participants at an annual conference of the United Auto Workers that union members “are the only guys keeping the barbarians at the gate.” Here’s more, courtesy of David Shepardson of the Detroit News:

Vice President Joe Biden defended the role of organized labor, saying opponents are mounting a long-term war to attack unions.

“These guys on the right — they know without you there — they call every shot,” Biden told more than 1,000 UAW members and retirees on the final day [of] its four-day annual political conference here. “You guys are the only guys keeping the barbarians at the gate.”

I’m sure that members of the Obama Administration have offered similar remarks at other labor conferences, but this is one of their few full-throated endorsements of the labor movement to reach outside the union hall. Perhaps media coverage has something to do with that, but the bigger problem is the Administration itself.

It starts with the President. In 2007, candidate Obama told a gathering of labor activists that he would walk the picket line with them if collective bargaining rights were threatened. By contrast, President Obama’s public support for the labor movement has been much more muted. And he hasn’t been seen walking any picket lines, either.

I’ve said this before on this blog, but it bears repeating: Labor unions may run the gamut from super duper to pretty bad, but on the whole they are the best, most effective mechanisms for providing everyday working people with basic safeguards and decent wages at work and a strong voice in the houses of our legislatures. It is no coincidence that sharply rising income inequality and the decline of union membership levels have occurred together.

As many political and public affairs commentators have observed, the Administration’s policymaking options may be limited in view of an extremely polarized and dysfunctional Congress. Nevertheless, the Oval Office offers a powerful pulpit for raising public awareness and for building public support on issues of the day. I’d love to hear more endorsements of the labor movement from the Administration during its remaining three years.

Making human dignity the centerpiece of American employment law and policy

The cover story of the March/April 2008 issue of Foreign Policy was an article by New York University economist Nouriel Roubini, warning that growing American economic instability was primed to trigger a devastating financial crisis that would reverberate around the world. Of course, Roubini was spot-on in predicting what would happen. Roughly six months later, the economy went into meltdown mode, and we have been living with the terrible consequences since then.

In the fall of that year, I was working on a law review article of much more modest ambition, attempting to pull together an argument for why human dignity should become the framing concept for American employment law. In the article (“Human Dignity and American Employment Law,” University of Richmond Law Review, 2009), I posited that human dignity should supplant the prevailing “markets and management” framework that embraces unregulated markets and unbridled management control of the workplace.

Over the weekend, I thought about how we are now in Year Six of the “new normal,” as defined by high unemployment and flattened paychecks that confront so many Americans — not to mention the millions of others around the world who have suffered from our hurtful system of trickle-down economics. I pulled up my 2009 article and turned to the conclusion, where I had offered some points on how to shift our workplace laws in the direction of valuing human dignity:

First, we must remain steadfast and unapologetic in calling for dignity in the workplace, even at the risk of being labeled foolish or naive. . . . In the face of likely criticism and even ridicule, we must make the case, without embarrassment, that workers should not have to check their dignity at the office or factory door.

Second, it is important to understand how we got to this place. The markets and management framework did not achieve dominance overnight or by accident. Its current, enduring incarnation has been the result of careful, patient, and intelligent intellectual spadework and political organizing. . . .

Third, just as the emergence of the markets and management framework was part of a broader political, social, and economic movement, the call for dignity at work cannot be made in a vacuum. . . . [D]enials of dignity occur throughout society, and therefore call for connected rather than atomized responses.

Finally, we must work on crafting messages that persuade the general public and stakeholders in employment relations. . . . [W]e need to translate these ideas into messages that reach people in legislatures, courts, administrative agencies, union halls, board rooms, and the media. This will not be easy, but at stake is nothing less than the well-being of millions of people who work for a living and those who depend on them.

Some five years after publication, I don’t think I’d change many of the words or points in that article. If anything, they are more compelling today, as the ravages of the Great Recession continue and worker power remains at a low ebb. Government measures undertaken in the immediate aftermath of the stock market crash helped to stave off complete disaster, but they fell well short of the needed paradigm shift for our economy, jobs, and workplaces.

To be sure, we still have our work cut out for us.

Thanksgiving, giving thanks, and giving back

 

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Today I’m hopping on a train to New York City (hence the Amtrak Acela poster from my office!), the travel piece of what has become an annual Thanksgiving get together with my cousins and friends. What began over a decade ago as an impromptu turkey day gathering is now a full-fledged tradition, and I look forward to it every year.

In classic New York style, we don’t start until the late afternoon. We’re all pretty hungry by the time the feast is served — and when I say feast, I mean it! The evening finishes up with many choices of desserts amidst singing and playing music.

Over the years, not much has changed about this gathering, the most noticeable difference being the kids now joining the grown ups at the main table. We repeat ourselves a lot from year to year, including well-deserved compliments to the chef and updates on how we’re all doing. That suits me fine. It is a source of continuity and connection, and a blessed reminder of how friends become family, and vice versa.

But for various reasons, I find myself a little down this year. I tend not to be the biggest holiday enthusiast to begin with, but I am particularly mindful right now of how many people are in need and how many are struggling with life’s challenges.

I started this blog five years ago, just as the Great Recession was going into full gear. Today, here in one of the world’s richest nations, we have millions who can’t find decent jobs, even more who are dealing with hunger on a daily basis, and a wealth gap that grows ever wider.

Beyond our shores and borders, the situation worsens, often by leaps and bounds. Recently I met a man around my age who is from Guinea in West Africa. He has been working in the U.S. for over 20 years. He lives on very little so he can send most of his earnings back to his family and village neighbors, who are in dire need of the most basic staples and provisions.

For those of us who are in a position to be thankful for life’s bounty, the best way to show our gratitude is to give back. Whether by way of money, service, advocacy, or some combination, we have opportunities to make a difference. As the saying goes, and inspired by multiple faith traditions, from those to whom much is given, much is expected, yes?

Life in an unequal, plutocratic society

We are living in an unequal, plutocratic society, and it is feeding an emotional dimension characterized by a dismissive lack of caring by many of the super rich and an angry, dog-eat-dog worldview for everyone else. So many of the employment policy issues I write about on this blog must be viewed against this broader, ugly canvass.

First, let’s establish the factual baseline: America’s wealth gap has reached extreme proportions. As Connie Stewart reports for the Los Angeles Times:

If you feel you’re falling behind in the income race, it’s not just your imagination. The wealth gap between the top 1% and the bottom 99% in the U.S. is as wide as it’s been in nearly 100 years, a new study finds.

For starters, between 1993 and 2012, the real incomes of the 1% grew 86.1%, while those of the 99% grew 6.6%, according to the study, based on Internal Revenue Service statistics examined by economists at UC Berkeley, the Paris School of Economics and Oxford University.

You can download the full study, led by Emmanuel Saez (UC-Berkeley), here.

Second, let’s define terms. Plutocracy, after all, is not a word used in ordinary conversation. Dictionary.com defines plutocracy in three ways:

  • “the rule or power of wealth or of the wealthy”
  • “a government or state in which the wealthy class rules”
  • “a class or group ruling, or exercising power or influence, by virtue of its wealth”

Sound familiar?

“A petty, narcissistic, pridefully ignorant politics”

Bill Moyers has become one of the most articulate and insightful commentators on the American plutocracy. Earlier this year, he did an excellent video essay on our out-of-control wealth inequality. Go here for a preview:

The unprecedented level of economic inequality in America is undeniable. In an extended essay, Bill shares examples of the striking extremes of wealth and poverty across the country, including a video report on California’s Silicon Valley. There, Facebook, Google, and Apple are minting millionaires, while the area’s homeless — who’ve grown 20 percent in the last two years — are living in tent cities at their virtual doorsteps.

“A petty, narcissistic, pridefully ignorant politics has come to dominate and paralyze our government,” says Bill, “while millions of people keep falling through the gaping hole that has turned us into the United States of Inequality.”

The worldviews of the ultra-wealthy

One of Moyers’s associates, Joshua Holland, reports on recent studies that confirm the attitudes and status of many of the ultra-wealthy. For example:

Two studies released last week confirmed what most of us already knew: the ultra-wealthy tend to be narcissistic and have a greater sense of entitlement than the rest of us, and Congress only pays attention to their interests. Both studies are consistent with earlier research.

We’re seeing the figurative creation of gated communities everywhere in our society. Even if the physical gates are not before us, excessive disparities in wealth and power are constructing barriers that isolate the most fortunate from everyone else, psychologically, politically, and financially.

The “cult of the selfish”

How does an unequal, plutocratic society experience everyday life and community (or lack thereof)? Leo Gerard, president of the United Steelworkers International Union, writes in a piece for In These Times that America is being overcome by “the cult of the selfish”:

A cult of the selfish relentlessly assails the value of American community. And now, the cult’s cruel campaign of civic meanness is achieving tragic victories. Just last week, for example, it succeeded in getting a bill passed in the U.S. House of Representatives that would slash funding for food stamps by $40 billion . . . . Also, it secured passage of a bill in the House that would de-fund the Affordable Care Act, thus denying health care—and in some cases life itself—to millions of uninsured Americans.

Denying food to the hungry, chemo to the cancer-stricken? That is not American. . . .

It is, however, exactly what the cult of the selfish is seeking. It wants an America without community, where everyone is out for himself. Alone. Self-seeking. Self-dealing.

“American Bile”

Public policy professor and former U.S. Secretary of Labor Robert Reich, who has just released a new documentary titled “Inequality For All” (trailer here) observes that he’s never seen the kind of civic hostility that we’re witnessing in this country today:

I’m 67 and have lived through some angry times: Joseph R. McCarthy’s witch hunts of the 1950s, the struggle for civil rights and the Vietnam protests in the 1960s, Watergate and its aftermath in the 1970s. But I don’t recall the degree of generalized bile that seems to have gripped the nation in recent years.

After considering all contributing factors to high anger quotient in today’s America, he concludes that ultimately “we need to look at the economy.”

Put simply, most people are on a downward escalator. Although jobs are slowly returning, pay is not. Most jobs created since the start of the recovery, in 2009, pay less than the jobs that were lost during the Great Recession. This means many people are working harder than ever, but still getting nowhere. They’re increasingly pessimistic about their chances of ever doing better.

As their wages and benefits shrink, though, they see corporate executives and Wall Street bankers doing far better than ever before. And they are keenly aware of bailouts and special subsidies for agribusinesses, pharma, oil and gas, military contractors, finance and every other well-connected industry.

The shutdown: “Workplace Bullying Gone Wild”

Cindy Waitt, director of the Waitt Institute for Violence Prevention and an important supporter of the Workplace Bullying Institute, writes for the Huffington Post that the current government shutdown is the result of classic workplace bullying tactics:

. . . Some of the members of  the 113th Congress are acting probably more irrationally than any we’ve seen in decades. But, from what I see and what I’ve learned over the years, I’d say they aren’t acting just like “nutcases,” they’re acting like what they are…workplace bullies.

. . . We currently face a government shutdown and the tactics being used by the “shutdown” gang are textbook bully tactics.

Community vs. confrontation

It adds up to an ugly, angry, confrontational culture, with the have-nots and the have-less being turned against each other. We can understand these dynamics, take on these huge disparities, and create a kinder, more just world, or we can increasingly be at each other’s throats. We have choices.

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