by Sid Plotkin and Bill Scheuerman
To Tea Partiers and supporters of the Far Right, Madison, Wisconsin has become the latest "Shining City Upon a Hill," where one of their courageous leaders, Wisconsin Governor Scott Walker, is waging a heroic battle to tame big government and balance the state's budget. American Exceptionalism has always defined liberty as keeping government off our backs while providing a system of order that protects and expands the rights of private property owners. Free of government interference, a possessive, entrepreneurial individual will create wealth and prosperity for the betterment of all. This of course is a myth: property and all its accoutrements are social institutions -- they always have been. But now Walker and his Tea Party colleagues, many of whom question the very existence of "society" and all but deny the legitimacy of taxation, have given the myth a new twist. They are flagrantly using the very government powers they claim to oppose in order to strip away the rights of Americans and lower the standard of living for most of us.
Walker cleverly got a "twofer" with his first public action. Playing off voter anger over the lingering Great Recession and citing a large budget deficit, he immediately threatened to lay off large numbers of state workers and go after their collective bargaining rights. State workers, he charged, are better off than most taxpayers. They are overpaid, have Cadillac health plans, and extravagant pensions. Claiming that Wisconsin's taxpayers just can't afford to pay for big wasteful government anymore, Walker demanded that state workers contribute five percent more to their pensions and another twelve percent more toward their health care costs. His ostensible objective in wielding the budget axe against public workers was to trim the size of government, save money, and cut the tax load. Not surprisingly, after the unions acquiesced to Walker's give-back demands, he didn't relent, going after their right to bargain collectively, eventually limiting their bargaining power to wages only, providing any wage hikes did not exceed the cost of living. Walker and his Tea Party colleagues justified their union-busting efforts as a way to bring more balance to the bargaining table. After all, their argument goes, when unions don't get what they want through collective bargaining, they get it from legislators who are in their back pockets thanks to labor's enormous campaign contributions. The exploited taxpayer always ends up footing the bill.
Just look at the crude and brutal simplicity of Walker's argument: Public workers have more than you and, worse yet, you're paying for it. So lets take it away from them so they can be as poor as you. If workers use collective bargaining to obtain a livable wage, we'll take away that right too! This race to the bottom is not only a race to slash wages, benefits, and the overall standard of living for working people; it's also part of a larger ideological agenda aimed at stripping workers of those rights that might actually give them some bargaining power with their employers. So much for the old liberal dream of countervailing power.
Not surprisingly, the Tea Party doesn't let mere facts get in the way of its lies. An Economic Policy Institute study, for instance, found that Wisconsin's public workers earn about 5 percent less than private workers at similar jobs. This gap widens for public workers with college degrees who earn 25 percent less than similarly situated workers in the private sector.1 The negative salary differential of Wisconsin's public workers is not unique. Study after study indicates that public workers earn less than their counterparts in the private sector. And, according to the Center for State and Local Government Excellence, even after accounting for public workers' benefits and pension plans, the earnings gap between public and private sector workers has widened in favor of private workers over the past fifteen years, and private wages have themselves been more or less stagnant for years.2 Blaming public workers for state deficits is not only a gross and flagrant lie; it greases the race to the bottom and distracts attention from the real problem facing workers across the United States: real wages for all American workers have been lagging for decades. An EPI study by Larry Mishel and Heidi Shierholz, for example, found that between 1979 and 2009 productivity grew by 80 percent but the hourly wage of the median worker only increased by about 10 percent. Corporate profits are now 22 percent above their pre-recession level, while corporate sector workers now earn 3 percent less.3 Somebody is getting that "surplus value," and it is not labor, organized or unorganized, public or private. There is no mystery to why the rich are getting richer. Though neo-classical economists advise ordinary people to ignore the social relations of production, capitalists never do. They understand who butters their bread.
Thus the chasm between productivity and wages is expressed in the highest levels of income and wealth disparity in U.S. history. The EPI reports that, during the recent economic expansion from 2000 to 2007, the richest 10 percent of Americans raked in 100 percent of the average income growth. Between 1989 and 2009, for instance, the wealthiest top 1 percent of Americans grabbed 56 percent of all income growth while the bottom 90 percent fought for the crumbs -- just 16 percent. When it comes to wealth, the numbers are just as revealing. According to data provided by the Survey of Consumer Finances, the wealthiest 5 percent of U.S. households held 63.5 percent of the nation's total wealth while the vast majority -- the bottom 60 percent -- has a mere 4 percent.4
Walker's claim that unionized public workers control legislative bodies with campaign contributions is equally misleading, indeed it is spurious. Of course, public unions make campaign contributions (though perhaps the Right will find a way to attack that right, too, soon enough). But the corporate sector does too. In fact, for every dollar unions make in campaign contributions corporations make fifteen. This is not quite the market equilibrium suggested by the going canons of respectable economic thought, but it does the job. And that was before the U.S. Supreme Court decision in Citizens United further undercut workers' power by removing legal restraints on corporate campaign giving. In the 2010 elections, corporate contributions far surpassed unions'.5 In Wisconsin, Big Energy in the name of the Koch brothers now owns the Republican legislature. Tea Partiers everywhere are in office thanks to big corporate bucks. Union busting will not only lower the costs of labor but break the back of the last vestige of organized political resistance against corporate hegemony in the U.S.
We can begin to understand the ongoing assault on public workers and their unions by going back to the 1980s when President Ronald Reagan taught us how to believe in the magic of markets: cut taxes and deficits disappear. Unfortunately, when this didn't happen and deficits grew even larger, shrewd conservatives discovered an ideological Trojan Horse in exploding deficits. Reaganomics proved to be a fiscal disaster. But it had the rich rhetorical benefit of demonstrating the utter folly of government economic policy -- not Reagan's policy mind you, but gov-mint policy. As deficits exploded, the message was clear and simple: the Feds were exploiting the people's credit card. The only way to get a handle on crisis-level deficits was to de-fund the state: balance the budget with tax cuts, budget cuts, and make it as hard as possible to raise any new taxes. Government doesn't need high taxes to do its job effectively. Taxes are the golden goose of spendthrift politicians who must never be trusted with the people's money or with the people's credit card. Society does not need much government anyway; private enterprise will take care of all our needs -- sure it will - for a price that happens to be whatever the traffic will bear. Back in the 1990s, we coined the term "balanced budget conservatism" to describe this pernicious charade of crackpot budgetary realism. Now, "Freddie" has returned. The same futile message is back: slash taxes, cut spending, shred regulations, "trim the fat," and, oh yes, liberate the very markets -- i.e., investment banks and corporations -- that took the country to the edge of economic catastrophe in the first place. It's no surprise that balanced budget conservatives stubbornly cling to this myth of competitive capitalism. It strengthens their grip on power while imposing the heaviest burdens on those least able to bear or resist these costs. Public sector workers -- not Wall Street bonus babies -- are public enemy number one. And what follows is as predictable as it is dismal: private sector workers pitted against public sector workers, the working class fractured into many weakened pieces, while the investor class rides a new wave of financial make-believe to make money hand over fist.
Unlike the federal government, states and cities can't run deficits -- they lack the ability to print money; and the neo-liberal politics of balanced budget conservatism fuel a popular hatred for anything smacking of taxes. Forget about raising the needed revenues from the folks with the highest concentration of wealth in U.S. history. With mainstream politicians from both parties in thrall to the crackpot conservatism of Tea Party rhetoric, the only solution they're willing to consider to raise revenues is to attract new business to their states, as often as not at the expense of other states. The result is a race to the bottom. The ostensibly sovereign states compete in a Darwinian struggle to see who can make business happiest. The problem, of course, is that, by luring business with the promise of lower taxes, governors, state legislatures, or city councils have to tax other people to pay for the whole litany of free-lunch capitalist tools they gave to these carpetbagger businesses. Not surprisingly, right after the recent tax increase in Illinois, governors in other states such as New Jersey's Governor Chris Christie announced they were heading to Illinois to bring overtaxed businesses back to their states. Scott Walker of Wisconsin summed it all up by saying "Escape to Wisconsin."
The states are courting global corporations that will take their money and put it in the most profit-generating investments, which are generally non-union, low-wage overseas enterprises. What the balanced budget conservative governors fail to acknowledge is that big business is always trolling for the most profitable environment and that all the business incentives and tax breaks in the world won't stop the globalization and offshoring of jobs that are hollowing out our state economies. Where will this end? When our standard of living is so driven down that we're competing with slave labor?
What state has the power to stop corporate outsourcing of jobs to low-paid workers overseas? Offshoring continues to grow, jumping to more than 400,000 U.S. jobs lost per year in 2004. Plunkett's Outsourcing & Offshoring Industry Almanac 2010 notes that outsourcing became a $500 billion dollar industry in 2009. For instance, slick online ads boast of the advantages of exporting jobs to India, where companies can pay full-time highly skilled workers between $895 and $1495 per month without the cost of benefits or the hassle of dealing with a union. No wonder, according to a Hacket Group survey, U.S.-based corporations plan to eliminate another 3.5 million jobs by 2014.
What Will This Right-wing Utopia Look Like?
Labor unions, at least as we know them, minimum wage laws, and legislated worker health and safety protections would become the stuff of history books. The economic textbooks now rule: the market will determine what workers earn and how they're treated. The fact that there are many more sellers of labor power than buyers is just too bad for wage earners. It's a case of the corporate elephant crying out "everyman for himself," as he danced among the chickens. In short, without union or legislative protections, individual workers will stand naked before the power of capital, as they did in Marx's day. A century and a half of labor's halting progress toward social justice will be gone.
Indeed, when people think of unions, due process isn't the first thing that usually comes to mind, but securing due process for workers is one of the most important things unions do. If you don't think so, go back to pre-union days when supervisors arbitrarily fired workers for any reason. The concept of job security is the antithesis of what the far Right views as a decent work environment. And all the little benefits that accompany job security would disappear too. Arbitrary and capricious behavior would once again define the power of bosses over workers. Consider, for instance, something as basic as break time, which we take for granted. Holding back bathroom breaks was an easy way for bosses to punish workers they didn't like. You gotta go? Fine, go and never come back. How about the old pre-union practice of bosses exercising what they viewed as their seigniorial rights over subordinates? There's a long history in the United States of workers being pressured to send a wife, sister, or girlfriend to the boss for a "date" in exchange for keeping his job.
If you think Walmart workers have it tough now, you're right, but the brave new workplace Utopia the Right wants to bring back embraces sweatshop conditions that would make Walmart look like a great place to work. Workers would have low salaries, no benefits, and no pensions. In the Right-wing Utopia we might expect even more wage theft than we have now, in which employees work long hours for next to nothing and are forced to work "off the clock, or are simply told they're not being paid. Health and safety protections? Limits on the number of hours a person can work? Forget about it. The mythological free market is capital's only legitimate guide. Stripping workers of their rights and essential health and safety protections is already becoming commonplace again now that union membership is declining. The far Right just wants to finish the job, and the ideological veil of balanced budget conservatism is helping them do just that.
The myth of balanced budget conservatism, wrapped in the rhetoric of American Exceptionalism and sold to a willing population by the Tea Party, is playing a crucial role in an ongoing redistribution of wealth and power in the United States. The populist movement, high-jacked by balanced budget conservatives, has brought record levels of disparities in wealth and income. The rich are getting richer, everyone else is getting poorer, and now the attack on working people has taken the added dimension of flagrantly stripping them of their basic rights, including the right to organize and bargain collectively, and, in some states, even the right to vote. All of this is justified by the premise that government is somehow an illegitimate force while the corporate sector will surely save us, even though the Wizards of Wall Street and their corporate partners are the very same people who gave us the Great Recession and would have destroyed our economy but for government intervention. We are witnessing a capitalism that has gone amuck and is now free to do almost anything it can in its insatiable quest to maximize surplus extraction and turn huge profits. This is only the beginning. But even a weakened labor movement still stands in the way. It's no secret that unions have been taking it on the chin in the private sector for decades, and now the public sector is under the gun. If we don't draw a line in the sand and stop the assault on workers and their unions, our future is grim, to say the least.
Whatever hopes we may have for a sane, socially conscious, environmentally sound economy depend first on protecting the historical progress already made, and that includes securing the rights of labor to organize collectively and to bargain. It is testimony to how bad things have gotten that such a point needs even to be made.
1 Jeffrey H. Keefe, "Are Wisconsin Public Employees Over-Compensated?" Economic Policy Institute briefing Paper, February 10, 2011. See also Andrea Orr, "Scapegoating Public Sector Workers," Economic Policy Institute, March 8, 2011.
2 "Out of Balance? Comparing Public and Private Sector Compensation Over 20 Years," A report commissioned by the Center for State and Local Government Excellence and the National Institute on Retirement Security (NIRS), April 2010.
5 See Kim Moody, U.S. Labor in Trouble and Transition: The Failure of Reform from Above, the Promise of Revival from Below (London and New York: verso, 2007), pp. 143-168; Lynn Rhinehart, "Unions Are Losers in Court Decision," Wall Street Journal, March 10, 2010.
Sid Plotkin is Professor of Political Science at Vassar College. Bill Scheuerman is Retired President of the National Labor College.