The Fight for Paid Family Leave and the Future of the Labor Movement
By Eileen Appelbaum and Ruth Milkman
Barack Obama may be the first U.S. president who genuinely understands working women’s issues, as the chapter on “Family” in his book, The Audacity of Hope, makes clear. Perhaps that’s among the reasons that women-especially women of color-voted for him in record numbers last November; Notwithstanding Sarah Palin’s presence on the Republican ticket, 56 percent of women (compared to 49 percent of men) voted for Obama, according to exit polls; In addition, women turned out to vote in greater numbers than men in 2008, making up 53 percent of all voters.
Their confidence was not misplaced. As president, Obama immediately signaled his commitment to improving the lives of working women, signing the Lilly Ledbetter Fair Pay Act- which provides redress for sex discrimination in pay-just days after taking office. His commitment to helping working families also became apparent early on. During his presidential campaign, Obama promised to make family and medical leave more accessible and more affordable, and to set a new minimum standard of paid sick days. During his first weeks in office, he established the White House Task Force on Middle-Class Families-which has improving work-life balance as one of its five goals-as well as the White House Council on Women and Girls; Michelle Obama’s First Lady's office and the White House Domestic Policy Office have also signaled a strong interest in women’s issues; In addition, Obama promised to reinvigorate the Department of Labor’s Women's Bureau.
Although working women have many unmet needs, including affordable child care and pay equity, the current policy agenda focuses on paid family leave and paid sick days; Polling data suggests that women today are more concerned about this than any other issue; In a November 2008 poll, for example, 35 percent of women indicated that Obama would best meet the needs of women if he addressed “family and work-life balance” issues, whereas only 22 percent chose the economy as their top concern, and 10 percent chose pay equity; Moreover, policy interventions on these issues enjoy broad public support among both women and men, and across party lines. Even workers who don’t have children themselves, some of whom may occasionally grouse about picking up the slack for co-workers who do, can get on board with paid family leave, especially if it addresses the growing need for leaves from work to care for aging parents and other seriously ill family members;
In addition, paid leave and paid sick days are essential to rebuilding the middle-class. Most families now rely on the paychecks of all available adults, and their economic security depends on maintaining those income streams during bouts of illness or when caring for a new child or an ill family member. Those covered by the 1993 federal Family and Medical Leave Act (FMLA) have access to unpaid leaves, but many workers are not covered at all, and those who are often cannot afford to take the unpaid leaves the act permits. Indeed, for working-class women, having a baby is strongly associated with poverty spells. Lack of access to family leave for caregivers also lengthens recovery periods for the elderly and forces many into expensive nursing homes, rather than allowing them to remain at home. Lack of access to paid time off to bond with a new child, recover from an illness, or look after a seriously ill family member is stressful for workers, who may have no option but to quit their jobs in order to care for their families in a crisis. Even routine illnesses-a cold or stomach virus-can create insurmountable problems for the two-fifths of U.S. workers whose employers provide no paid sick days.
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Taming High Finance: Why the Obama-Geithner Plan Won’t Work
By Gerald Epstein
Within a month of taking office and facing growing popular anger at the banks that precipitated the current financial crisis (and at the federal government that had spent billions bailing them out), President Obama held a dramatic public meeting of his economic team and legislators from both parties. From the Oval Office, he laid out his economic priorities, emphasizing the need to reform financial regulation. "Among other things," Mr. Obama said, "financial institutions that pose serious risks-systemic risks-to our markets should be subject to serious oversight by the government." Pointedly, Mr. Obama warned bankers: "Executives who violate the public trust must be held responsible."
Following up on Obama's declarations, Treasury Secretary Tim Geithner described an action plan for the financial sector. Laying out the massive problems created by inadequate financial regulation, Geither affirmed that “address[ing] this [problem] will require comprehensive reform. Not modest repairs at the margin, but new rules of the game."
et by May 2009, there was widespread fear that the Obama administration's re-regulation fervor had waned, and the push for strong re-regulation of finance had splintered and stalled. One key reason for the stalled reform is not hard to find: the financial lobby is fired up and its power is being felt across the political battlefront. It had prevented key housing legislation to allow bankruptcy court judges to alter mortgages to keep people in their homes; it had fashioned legislation on derivatives that would reduce restrictions; it had altered credit card holders' protection legislation; and it was waging a major battle to broadly fashion financial reform to suit its own interests.
Still, it would be a mistake to see only the outside banking forces as dictating Obama's financial policies. For the power of finance is also expressed by key insiders-notably Treasury Secretary Geithner and Chief Economist Lawrence Summers (to say nothing of "independent" Chairman of the Federal Reserve, Ben Bernanke)-who appear to be excessively tied to Wall Street. Summers pushed for crucial financial deregulation when he was in the Treasury Department during the Clinton administration, and earned more than $5 million in payments from a hedge fund before joining the Obama team. As president of the New York Fed, Geithner was associated with the initial problematic bailouts of Wall Street and did little to promote effective financial regulation in the build-up to the crisis. In making these appointments, Obama was evidently trying to win the confidence of Wall Street, a well-traveled path for Democratic presidents. But by taking an approach dedicated to winning back the confidence of Wall Street, Obama risks losing the confidence of the American people.
Obama's supporters had been led to expect something different: a president who would stand up to finance, rather than be bowled over by their representatives from both inside and outside the White House.
Supporters have been so disappointed by Obama's approach to finance that when, on June 17, 2009, the administration finally released its long-anticipated (and deeply flawed) blueprint for financial reform (Financial Regulatory Reform-A New Foundation: Rebuilding Financial Supervision and Regulation), the commentary was primarily one of muted outrage, but not surprise. While the blueprint contains some potentially important reforms-especially a new Consumer Financial Protection Agency-it is mostly inadequate to the task, and even the weaker reforms are likely targets of the financial lobby’s armies.
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Labor’s Love Lost: Is the Battle for EFCA a Quixotic Crusade?
By Max Fraser
After eight disastrous years of Republican rule, it was no wonder that union members voted for Barack Obama by a two-to-one margin last November. And during the first months of his presidency, Obama did much to repay organized labor for its impressive electoral support. He made compelling public statements about the role of unions in improving the lives of working people; issued a quick flurry of pro-labor executive orders on federal contracts; and, in the first major bill he signed into law after taking office, reversed a 2007 Supreme Court decision that imposed onerous restrictions on workers attempting to sue for pay discrimination. In his economic recovery plan and budget, Obama pushed for creating new jobs, extending social safety nets, and investing in a national public health care system. And with the appointments of Hilda Solis as labor secretary and Wilma Liebman as the new chair of the National Labor Relations Board (Liebman had been an outspoken critic of the Board during the Bush years), Obama sent a clear message about his intention to enforce labor laws on behalf of working people once again.
But the first one hundred days of the Obama administration brought labor no closer to reaching its most coveted goal-passage of the Employee Free Choice Act (EFCA), the signal piece of reform legislation that would make it easier for unions to organize new workers and secure first contracts, which has consumed much of the labor movement’s political attention in recent years. EFCA has become a lightning rod for powerful corporations and their conservative political allies, who see the bill as the crucial battle in the resurgence of the American labor movement. Despite a supportive White House and extensive mobilization by unions and allied groups, Democrats have struggled to secure the sixty votes that are necessary to move the bill through the Senate.
As the bill floundered in legislative purgatory by the spring of 2009, two key provisions emerged as the most contentious: one that would allow workers to form a union once a majority has signed authorization cards, and another that would mandate binding arbitration if contract negotiations break down or are unnecessarily delayed. In television ads, op-eds in national news publications, and position papers issued by right-wing think tanks, the opposition decried the bill for denying workers their right to “secret ballot elections,” and granting governmental mediators undue influence in setting contract terms and shaping business practices. In mid-July, this campaign succeeded in winning a major compromise when EFCA’s Democratic sponsors in the Senate agreed to drop the majority sign-up provision from the bill, to placate wavering moderates in their own party. The revised bill-which, as of this writing, Democrats hope to bring to a vote by the fall of 2009-will include procedures for shorter unionization campaigns and expedited elections instead.
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Sick on Arrival: Health Care Reform in the Age of Obama
By Marie Gottschalk
Despite all of the parallels drawn between President Obama and Franklin Roosevelt, the new administration initially responded to the health care crisis as though it were 1993, not 1933. Obama sought a minimalist health care reform solution, rather than seizing on the exceptional political moment to strike out in a bold new direction.
Held captive for so long by neoliberal ideas about how best to organize the U.S. economy and society, Obama and many other would-be reformers put competition and consumer choice at the center of their efforts to reform the U.S. health care system. Dozens of major organizations close to the Democratic Party, ranging from the AFL-CIO to MoveOn.org to the Children’s Defense Fund, mobilized over the last year or so on behalf of a breathtakingly modest solution: creation of a public health care plan—essentially a nonprofit insurance company—to compete with the commercial health care insurers. They largely abandoned the call for a single-payer health care system (modeled after Canada’s) around which many progressives have rallied since the demise of the Clinton administration’s Health Security Act. This faith in market-led solutions for health care remained largely unshaken in spite of the recent financial collapse.
Held captive for so long by neoliberal ideas about how best to organize the U.S. economy and society, Obama and many other would-be reformers put competition and consumer choice at the center of their efforts to reform the U.S. health care system. Dozens of major organizations close to the Democratic Party, ranging from the AFL-CIO to MoveOn.org to the Children’s Defense Fund, mobilized over the last year or so on behalf of a breathtakingly modest solution: creation of a public health care plan—essentially a nonprofit insurance company—to compete with the commercial health care insurers. They largely abandoned the call for a single-payer health care system (modeled after Canada’s) around which many progressives have rallied since the demise of the Clinton administration’s Health Security Act. This faith in market-led solutions for health care remained largely unshaken in spite of the recent financial collapse.
The Public Plan Panacea
The centerpiece of their efforts was the creation of a new government-sponsored health care plan for uninsured Americans under age sixty-five who lack employer-based health benefits and do not qualify for Medicaid. This group would be able to choose between a standard package of benefits offered by the public plan or a comparable one provided by private insurers.
Private insurers insisted that a public plan would not compete on a level playing field and would ultimately drive them out of business. Their contention subtly recast the debate over health care reform. The focus shifted to how to make the public plan a “fair” competitor and away from the enormous inequities of the under-regulated private insurance market that have contributed so significantly to the country’s health care crisis. In order to rally support for a public plan and neutralize charges of unfair advantage, some supporters of the public plan watered down the original proposal beyond recognition or bargained away (or shunned) key reforms needed to rein in insurers and providers.
Supporters of a new government-sponsored health care plan extolled the public sector for its reported superior ability to contain costs and pursue innovations that improve the quality of care. They heralded Medicare in particular for retaining wide access while containing expenditures on health care through cost-saving innovations like the prospective payment system introduced in 1983 and fee schedules for doctors introduced in the 1990s. Left out of the story is that, for many years, Medicare was largely an unregulated cash cow for providers. The quid pro quo to get physicians and hospitals to end their jihad against Medicare in the mid-1960s was an agreement to reimburse them on a fee-for-service basis and eschew imposing serious cost or budget controls.
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Shelter from the Storm: The Multi-Dimensional Housing Crisis
By Nandinee K. Kutty and Gregory D. Squires
As the foreclosure crisis continues to play out throughout the United States, the theme that is struck in almost every news story and commentary is the need to stabilize the nation’s financial system. The Obama administration, however, has begun to direct some of the policy attention, including significant resources, toward the families and communities that have been the hardest hit by spreading foreclosures and related economic challenges. It has recognized the importance of assisting the victims of foreclosure and reshaping the housing and broader economic policy arena that incubated the present crisis. More can and should be done. But in the first one hundred days, the Obama administration has initiated changes in economic policy generally and housing policy in particular that constitute important breaks not just from the past eight years, but from the past thirty years. Hopefully, future policies will build on the foundation that has been laid in the early days of the Obama presidency.
The housing policies of the new administration were most concretely expressed in the Making Home Affordable Plan, the federal budget, and the economic stimulus plan. In addition, the huge financial rescue plan (the Troubled Asset Relief Program, or TARP) and activities of the Federal Reserve are intended to improve the flow of consumer credit, including mortgage lending.
Below we briefly review the nature and magnitude of the housing crisis facing the nation, housing policies initiated in Obama’s first one hundred days, and steps for the future.
The Housing Crisis
The nation is currently in the midst of a serious housing crisis. Foreclosures are skyrocketing and many homeowners owe more on their mortgages than their homes are worth. These housing problems led to a global economic meltdown in which many multinational financial institutions went under, due to their exposure to mortgage-backed assets. Although the home mortgages underlying these assets began to fail in the early 2000s, the impact on financial institutions was not apparent until midway through 2007, and it has continued ever since. This is the housing crisis that has dominated newspaper headlines and policy efforts.
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Poor Relief: Does Obama Have a Poverty Policy?
By Frances Fox Piven
During the past four decades, the issue of poverty slipped off the big screen of American politics. This was not, of course, because poverty disappeared from American life. The United States has been the undisputed poverty leader among industrialized countries, despite the fact that we use a poverty measure that gravely understates any reasonable measure of actual need.
For most of this period, despite huge increases in economic productivity, the numbers of Americans living below the poverty line did not much change. Then, under the administration of George W. Bush, things got worse: poverty rates began to increase and the “deep poverty” numbers rose even faster.
But change may be afoot, a reflection of the combination of large-scale unemployment and hardship created by a dire economic crisis, and the electoral shifts that weakened and disoriented the Republicans and brought a new Democratic administration into power. Modest improvements in poverty policy have already been legislated as part of Obama’s stimulus package, the American Recovery and Reinvestment Act of 2009. As some critics have pointed out, given the size of the economy, the $787 billion stimulus plan is almost surely too little to restore economic growth. But it does mandate $501 billion in new spending (the remaining $286 billion consists of tax cuts) and, for the first time in decades, substantial funds will be directed toward programs for the poorest Americans, including an additional $20 billion for food assistance which will temporarily boost by 14 percent the benefits provided to thirty-one million people under the Supplemental Nutrition Assistance Program (formerly known as the federal Food Stamp Program). The legislation also lifts stringent time limits on food aid for childless unemployed adults, and increases funding for the Women, Infants, and Children (WIC) nutrition program, as well as for the Emergency Food Assistance and National School Lunch programs.
The stimulus bill allocates $87 billion to create a temporary new health care entitlement program which will allow those collecting unemployment insurance to receive Medicaid, and provides subsidies to help laid-off workers continue to receive health benefits from their former employers. The legislation also restricts the states from tightening Medicaid eligibility. And, very important because more than half of those laid-off are not now eligible for unemployment benefits, the Unemployment Insurance Program has been liberalized via financial incentives to induce the states to cover more low-wage workers and part-time workers. Child care funding is increased, and a raft of housing initiatives for poorer people has been funded, going a small part of the way to make up for the two-thirds reduction in funding for these programs since the 1980s.
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More Than Green Jobs: Time for a New Climate Policy for Labor
By Sean Sweeney
U.S. labor’s role in the fight against global warming is akin to MIT meteorologist Edward Lorenz’s "butterfly effect"—the concept that small events can have large, widespread consequences. The sometimes surgical interventions of key unions on Capitol Hill this past spring have helped shape and then pass—by a narrow margin—a major piece of clean energy and climate protection legislation. Adopted by the House in late June, the American Clean Energy Security Act (ACES) could decide how quickly and effectively the world responds to the threat of climate change. That unions were on the progressive side of this critically important vote is remarkable given their troubled history with the issue. But labor still has some serious obstacles to negotiate before it can arrive at a truly forward-looking and movement-building climate and energy policy, one that brings the economic and social needs of workers into full alignment with a science-based climate protection program. Firstly, labor must fully accept the idea that policy must actually be guided by science—and this is not negotiable. Secondly, unions need to reconsider their commitment to a future based on coal, because nothing is cooking the climate faster than coal use. Thirdly, more unions need to be fully engaged in the fight against global warming in order to develop and then mobilize around a bold approach that champions social justice both at home and internationally.
Politics vs. Science
The ACES bill was supported by a broad coalition of environmental groups, unions, and businesses. As of this writing, the bill is in the Senate. Unions have helped ensure that the fourteen-hundred-page House bill protects existing jobs, establishes prevailing wage provisions, and funds worker training while it establishes a pathway to cut greenhouse gas emissions substantially—a 17 percent reduction below 2005 levels by 2020, and 83 percent by 2050. However, Friends of the Earth and Greenpeace opposed the bill on the grounds that it will fail to stave off the worst effects of climate change. They regard the bill’s planned reductions in U.S. emissions to be inadequate; it rewards and emboldens fossil fuel industries, and will impede rather than help the global effort to reduce global warming pollution by encouraging other countries to soft-pedal their own reduction commitments. Environmental groups supporting ACES generally accept that it fails to do enough in the near to medium term—but given the political realities in Congress, they regard the bill as an important first step at a time when further delay could be catastrophic. ACES will reduce U.S. emissions by around 4 percent below 1990 levels by 2020—way short of the 25-40 percent reductions below 1990 levels the Intergovernmental Panel on Climate Change (IPCC) provided as a range industrialized nations would need to meet by 2020 in order to keep the earth’s temperature increase to within two degrees Celsius. Scientists say the two-degree target is essential to giving human society a fifty-fifty chance of avoiding the most dangerous effects of global warming.
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Organized Labor and the Civil Rights Movement: Lessons from a Troubled Past
By Steven A. Reich
The organizers of the convention that founded the National Association for the Advancement of Colored People (NAACP), which met in New York City in the late spring of 1909, recruited two black railroad firemen from Georgia to address the conference on a recent labor upheaval that threatened their lives and livelihoods. In mid-May of that year, white unionized firemen called a strike to force the Georgia Railroad Company to discharge its black firemen, replace them with whites, and exclude African-Americans from future employment. When the railroad refused to meet the strikers’ demands, whites who lived along the railroad lines came to the aid of the unionists by mobbing trains operated by black firemen, prompting President William Howard Taft to instruct the War Department to have federal troops prepared to intervene “on a half-hour’s notice.” The racist attacks on the “honest, industrious” black railroad workers of Georgia permeated the proceedings of the conference attended by some three hundred progressive white reformers and black intellectuals. Several of the featured speakers referenced the Georgia Race Strike to illustrate the depths of racial inequality and injustice in the United States. With “grave concern” that the strike exposed a national trend of using “violence and bloodshed” to not only deny African-Americans “the right to work” but to force “proven and efficient” workers “to surrender their long followed means of livelihood to white competitors,” the conferees adopted a resolution on industrial discrimination that demanded universal enforcement of the civil and political rights guaranteed in the Fourteenth and Fifteenth Amendments of the U.S. Constitution as “first and immediate steps” to remedy “these national wrongs.”
To recognize, on the NAACP’s one hundredth anniversary, that the Georgia Race Strike was on the mind of the association’s founders underscores a simple but often overlooked point: the nation’s oldest civil rights organization was never as unresponsive to the needs and demands of the black working-class as its critics, both contemporary and academic, have often charged. Moved by the railroad firemen’s tales of how racial violence, segregation, and disenfranchisement sustained the economic subordination of black workers, the founders adopted a resolution that understood political and economic injustice as inseparable. That resolution, however, offered no concrete plan of action. It said nothing about whether to recruit, let alone mobilize, black workers as members, what strategy or tactics to employ, how to even define what a right to work meant and how it would challenge the edifice of Jim Crow, or whether to consider unions as allies or obstacles. Labor rights—to organize, bargain collectively, and go on strike—did not necessarily mean the same thing as the right to work. The two could collide if the former empowered exclusionary unions, such as Georgia’s all-white railroad union, to deny black workers the latter. Although the NAACP’s reputation for political moderation, gradualism, and a commitment to litigation over mobilizing the masses has some merit, the founders’ invocation of a right to work that envisioned employment as central to its definition of citizenship nevertheless resonated with black workers.
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Raising the Floor: The Movement for a Living Wage in Asia
By Anannya Bhattacharjee, Sarita Gupta, and Stephanie Luce
A growing consensus believes that the neoliberal “free trade” model of development has failed to raise the standard of living for most of the world’s people. The current economic crisis has created an important opening to discuss alternative strategies for economic development and different rules for the game of international trade.
The Asia Floor Wage (AFW) Alliance argues for a new framework of growth for the global economy: one that is based on labor rights and prioritizes the demand for a living wage. Shifting to this new paradigm would not only benefit workers in the Global South, but those in the Global North as well. The idea for a global bargaining strategy emerged from discussions among unions and non-governmental organizations (NGOs) in Asia in 2005. After several years of organizing, the AFW Alliance—comprised of unions and organizations from eleven Asian countries, the U.S., the U.K., and Europe—was formed. It is now set to launch a region-wide campaign to raise wage standards in the garment industry, one of the most globalized sectors of production.
The Need for a Regional Wage Standard
International garment workers need an approach that takes them beyond one employer, and possibly even beyond one industry. This concept is not new. For example, U.S.-based unions established pattern bargaining in auto, rubber, steel, and garments—virtually every industry the CIO organized. The challenge is to take that approach to bargaining across borders, as some European trade union federations have tried to do in European Union countries. While capitalism has spawned international trade regimes that favor the rights of investors, workers have not managed to create many of their own cross-border campaigns. If garment workers in Asia can achieve industry-wide standards in the region—at least around a common wage demand—this will reduce capitalism’s effect of pitting workers against one another and will certainly bolster union organizing. This, in turn, could help workers achieve other gains.
There is no commonly accepted definition of the term “living wage.” In fact, this has been a major sticking point within the anti-sweatshop movement. Corporations and universities have refused to include living wage requirements in their codes of conduct, arguing that there is no good way to define it.
Not only would a living wage differ by family type and geography within a country, but any broad definition would have to consider currency exchange rates and purchasing power issues across countries. Some have argued that any common wage standard would be arbitrary—a formula imposed by U.S. and European activists with little meaning for workers in the Global South.
The AFW campaign recognizes the challenges of defining a living wage but strongly believes in the necessity of a common wage standard for the region. Over the past two years, the campaign has worked to compare criteria governing minimum wages and methodologies for defining and measuring poverty in Asia. After much discussion and debate, the group reached a consensus on the idea of a floor wage: a wage that is higher than the current minimum wage in most countries, and that brings workers within the parameters of a living wage.
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Systemic Breakdown: Why Labor Must Demand a Different Economy
By William K. Tabb
The present economic crisis is the culmination of decades of neoliberalism, corporate globalization, and financialization, which (between 1995 and 2007) reduced the share of income going to wages and increased the share going to profits in three-quarters of the world’s nations. In the United States, real incomes for workers had been stagnant in real terms (after adjusting for taxes and inflation) for three decades. As capital went global, labor’s bargaining power declined, transnational corporations and international finance grew more powerful, and the political system responded to this change in the balance of class forces.
In the United States, the trend line along which wages and productivity had once risen in tandem began to part, with the gains of growth overwhelmingly distributed to the corporate elite who invested the surplus abroad and into speculation. The accumulation strategy was based on the creation of huge amounts of debt. Permissive regulators permitted enormous leveraged borrowing which allowed the snowballing creation of asset bubbles. Thanks to the high level of borrowed funds, the return on capital from successful speculation could be enormous. As more players entered the game, assets were bid up and a bubble economy brought riches to the investment banks and hedge funds that took the greatest risks with other people’s money. Individuals bought homes on the assumption that prices would keep rising, and people took cash out of the presumed higher value of their homes to live beyond what their stagnant real incomes allowed. Mortgages were sold off in bundles as collateralized debt obligations (CDOs), and companies like AIG sold credit default swaps (CDSs) which presumed to offer insurance against contingent events thought unlikely by the CDS sellers. High stakes gambling eventually came to a bad end and we’re now living out the consequences.
At the time of this writing, “green shoots” are said to be evident, and recovery is just around the corner. One crisis appears to be solved, although a second one is worsening. A bank bailout policy, which spanned the Bush and Obama administrations, has apparently rescued the financial sector. In March 2009, Bloomberg News estimated that the Treasury Department, the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and other agencies had allocated $11.7 trillion to buying toxic assets, insuring others, and making funds available to the financial sector for low-cost guaranteed borrowing. Accounting rule changes have been approved to flatter bank balance sheets, allowing banks to use their own internal estimates of asset values. Stress tests have been graded on a generous curve and a host of other forbearances have allowed bank stocks to rebound, seemingly bringing Citigroup, Bank of America, and others back from the dead. Because financial sector institutions are confident that the government will save their bacon, markets have regained some confidence although this can change, given underlying weaknesses. What is not changing is the other crisis—the crisis that has affected working people’s lives and livelihoods.
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Reforming Global Capitalism: The Illusion of Change
By Walden Bello
The swift unraveling of the global economy, combined with the ascent to the U.S. presidency of an African-American liberal, has left millions anticipating that the world is on the threshold of a new era. Some of President Barack Obama's appointees—in particular former treasury secretary Larry Summers to lead the National Economic Council, New York Federal Reserve Board chief Tim Geithner to head the Treasury Department, and former Dallas mayor Ron Kirk to serve as trade representative—have certainly elicited some skepticism. But the sense that the old neoliberal formulas are thoroughly discredited has convinced many that the new Democratic leadership will break with the market fundamentalist policies that have reigned since the early 1980s.
One important question is how decisive and definitive the break with neoliberalism will be. Other questions, however, go to the heart of capitalism itself. Will government ownership, intervention, and control be exercised simply to stabilize capitalism, after which control will be given back to the corporate elites? Are we going to see a second round of Keynesian capitalism, where the state and corporate elites (along with labor) work out a partnership based on industrial policy, growth, and high wages—though with a green dimension this time around? Or will we witness the beginnings of fundamental shifts in the ownership and control of the economy in a more popular direction? There are limits to reform in the system of global capitalism, but at no other time in the last half century have those limits seemed more fluid.
President Nicolas Sarkozy of France has already staked out one position. Declaring that "laissez-faire capitalism is dead," he has created a strategic investment fund of €20 billion (US$27 billion) to promote technological innovation, keep advanced industries in French hands, and save jobs. “The day we don't build trains, airplanes, automobiles, and ships, what will be left of the French economy?" he recently asked. "Memories. I will not make France a simple tourist reserve." This kind of aggressive industrial policy, aimed partly at winning over the country's traditional white working-class, can go hand-in-hand with the exclusionary anti-immigrant policies with which the French president has been associated.
Global Social Democracy
A new national Keynesianism along Sarkozyan lines, however, is not the only alternative available to global elites. Given the need for global legitimacy to promote their interests in a world where the balance of power is shifting toward the south, Western elites might find more attractive an offshoot of European Social Democracy and New Deal liberalism that one might call Global Social Democracy (GSD).
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Economic Prospects
By Robert Pollin
Is the United States government facing “fiscal suicide”? Are U.S. Treasury bonds “heading for the dumpster”? Such claims have been published regularly in the mainstream media following the passage of the Obama economic stimulus program, which became law in February 2009 (these particular quotes were in the New York Times and Bloomberg News in May 2009). Of course, the Obama stimulus program was implemented to counteract the economic disaster that was already at hand in February 2009 and continues to the present.
In fact, the stimulus program is too small relative to the magnitude of the crisis and too loaded with corporate tax breaks. But it is still among the most progressive pieces of economic legislation since the 1960s. Of the $787 billion in new government spending being pumped into the economy over the next two years, major funds are flowing into clean energy and traditional infrastructure investments, health care, and education, as well as unemployment insurance, food stamps, and similar measures to support people who are suffering the most severely from the crisis. Overall, the stimulus program aims to generate about 3.5 million jobs over the next two years, to compensate at least in part for the nearly seven million jobs the economy has shed since January 2008.
Good intentions aside, the Obama program will obviously not succeed if it ends up wrecking the U.S. government’s financial credibility. This is why—like it or not—debates over the deficit cannot be left to technicians and Wall Street fulminators alone. Ordinary people, progressives in particular, need to maintain a basic grasp of the issues at hand.
In fact, government bonds are not really heading for the dumpster. We can see this over the short term by considering the government’s forthcoming interest payment obligations. Over the longer term, the most fair and effective ways to control government deficits will entail raising taxes on the wealthy, in particular Wall Street speculators, and cutting the gargantuan sums of money that now flow to both the health care industry and the military budget.
Low Interest Rates Mean Small Debt Payments
To pay for the Obama stimulus program, the U.S. fiscal deficit is projected to rise to $1.8 trillion in 2009 and $1.4 trillion in 2010. The 2009 deficit amounts to about 13 percent of projected GDP in 2009, with the 2010 deficit at 10 percent of GDP. Between 1942 and 1946, as the U.S. fought World War II, the federal deficit averaged 19.2 percent of GDP, peaking in 1943 at 30.3 percent. The 2010 deficit will be by far the largest since World War II. The closest we have come previously was in 1982, during the recession under Ronald Reagan, when the deficit reached 6 percent of GDP. For the full postwar period, the fiscal deficit averaged about 2 percent of GDP.
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Caught in the Web
By Kim Phillips-Fein
such as "Broke is the New Black" proliferate on the streets of New York, and fancy food stores advertise sales by calling them “New Deals.” The Internet, of course, is the perfect medium for cheeky self-reflection, and it is filled with websites chronicling life in these hard times. Among them is Recessionwire, which includes a “recession lexicon” (“brokavore” = an impoverished gourmand, “prayoff” = a layoff you long for from a job you hate) and a feature entitled “Screwed,” which tries to catalogue the number of layoffs every day. Wry, arch, and thoroughly apolitical, such websites make it seem as though the recession itself is having its fifteen minutes of fame. Were things like this in 1931? (To visit the site, go to http://www.recessionwire.com/.)
Real information about the economy is out there too. One decent place to look is the website of the Federal Reserve Bank of St. Louis, which provides raw data about the course of various economic indicators—industrial production, real income, employment, and retail sales—in eight different countries, including the United States. There’s a full timeline of the financial crisis, going back to 2007, giving a detailed blow-by-blow account of how the markets came apart, and a capsule summary of the root causes of the crisis. An interesting map of failed banks shows the scale of financial institutions that have collapsed across the country (the biggest banks have gone bust in Southern California, Las Vegas, South Florida, and Utah), and a map of the distribution of Troubled Asset Relief Program (TARP) funds shows how much money various financial institutions have gotten from the federal government. The site also includes articles analyzing the current downturn—for example, giving a sense of how it compares to the Great Depression (while the Fed sees this recession as likely to be one of the longest and perhaps the deepest since World War II, its economists believe that parallels with the depression of the 1930s are “misplaced,” in that the collapse of growth and the rise in unemployment seem unlikely to reach the crisis proportions of that earlier decade). The Federal Reserve Bank is a mainstream organization, of course, so its analysis might not always be one that labor activists will agree with, but the site is a good source to visit for basic economic information nonetheless. Check it out at http://research.stlouisfed.org/recession/.
Ethical Business?
In 1970, Milton Friedman wrote that “the social responsibility of business is to increase its profits.” Indeed, in an economy organized around the private accumulation of profits, what does social responsibility really mean? And how can it be enforced when management is legally bound to return the highest possible profits to shareholders? What’s more, without mechanisms to guarantee accountability, don’t campaigns for social responsibility run the risk of becoming self-serving marketing programs, more than measuring real change? But at the same time, whatever its limits, the idea of corporate responsibility does provide a rationale for publicizing the downright asocial actions that companies take—and keeping tabs on what businesses are doing can help to check their power.
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Which Side Are You On?
Reviewed by Lisa Duggan
Lawrence Richards ran into some difficulties when he set out to organize computer programmers during the mid-1990s. He found himself regaled with horror stories about organized labor from programmers for whom the term “union” was anathema. This experience sent him off to investigate the growth of anti-union culture in the United States during the post-World War II period. His driving question—why do so many workers oppose unionization?—led him through the research for Union-Free America: Workers and Antiunion Culture.
Union-Free America traces the trajectory of the dominant public image of organized labor from the anti-union early twentieth-century, through the increasingly pro-union period from the 1930s to the heyday of organization in the mid-1950s, through the sharp decline in public support for organized labor through the 1970s to the end of the twentieth century. Richards proposes to examine the dominant culture and the reigning image of the labor movement by analyzing poll data, studies produced by sociologists and industrial relations specialists, magazine articles across a spectrum of broad-based opinions, and a small selection of movies and television shows. He uses these sources not to trace the debates over unionization as they shift over time, but to point to the commonalities in representations of unions as they persist through the decades.
The commonalities that Richards finds are familiar—unions as: special interest groups that are unconcerned with the broader public welfare; corrupt and undemocratic; strike happy and wedded to rigid job descriptions and work rules; and contributors to inflation and job flight overseas. He traces these themes as they appear in his sources through word choice, images, and tropes across opposed social ideologies and political camps, in order to demonstrate their pervasiveness at the heart of a homogenizing middle-class American culture during the postwar period. He then shows these anti-union ideas at work via a series of three case studies focused on organizing drives among blue-, pink-, and white-collar workers from 1969 to 2002.
Richards presents his findings in the hope of persuading his readers that the influence of anti-union culture among workers themselves, including among union members, has been a significant barrier to labor organizing during the half-century since the height of successful organization in the mid-1950s. He wants to add this to the list of factors emphasized by most labor historians and other scholars: employer opposition, unfavorable state action, the limits and failures of the AFL-CIO, structural changes in the economy and workforce, and resurgent individualism among workers. But the detailed descriptions and analyses of labor conflicts in Union-Free America don’t really differentiate anti-union culture as an independent factor. Rather, they show the malleability and shifting effectiveness of anti-union rhetoric, as other factors combine to support or erode the power of its dominant images and tropes.
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The Many Shades of Solidarity
Reviewed by Angela MacWhinnie
I had been a union organizer for about one year when I was taught a lesson in the meaning of solidarity by the housekeeping staff of one of San Francisco’s major hotels. I had recently started working for the Hotel Employees and Restaurant Employees Union (HERE), and hotel management had proposed to add an item—coffee cups—to each guest room. While putting out the coffee cups was simple in itself, there was already a long list of tasks for housekeeping staff to do in each room. Some room cleaners objected that this was one task too many. When multiplied by the fourteen rooms for which each room cleaner was responsible, the coffee cups would force them to either rush or not finish the rooms on time.
The housekeeping staff was split into ethnic groups: Chinese, Filipinas, and Latinas. Each group had a strong sense of identity, speaking their own language while eating lunch at separate tables. All were sensitive to any signs of favoritism shown to the other groups. The leaders of each ethnic group met shortly after the announcement of the added cups to discuss what should be done to prevent the additional work. While Linda, a Filipina, argued that she had spoken to room cleaners who thought it would be a burden, especially to the older room attendants, some of whom were more than seventy years old, Gloria said that she and the other Latinas felt the added work was manageable.
The next day, when they met with management, each leader spoke in turn about the impact this work would have. Gloria went last and spoke passionately about the choice between adding work and maintaining quality. She talked about the time it already took to change large beds, specially fold towels, and fluff the many pillows in each room. Then she held up a roll of toilet paper with an improperly folded end and said that it was the unacceptable but inevitable result of having too much work to finish in the half-hour they were given to clean each room. Facing a united front, management withdrew their plan.
After the meeting, I asked Gloria why she had presented such strong objections to management when the day before she had stated that she and the other Latinas were fine with the added work. She explained, “If it is too much for anyone then we have to all say it is too much. We have to all stick together and make sure that no one has more work than they can do. If I can handle it but she cannot, then it is not acceptable to me either.”
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Anti-Globalization Goes to Hollywood
Reviewed by Kitty Krupat
On November 30, 1999, tens of thousands of demonstrators took to the streets of Seattle, Washington to protest a summit meeting of the World Trade Organization (WTO). What followed in the next five days came to be known as the “Battle in Seattle.” The National Guard was called in to surround the convention center where the WTO would meet. Armed with shields, clubs, tear gas, and eventually rubber bullets, the Seattle police and the King County Sheriff’s Office arrested at least six hundred protesters. All to no avail—within four days, demonstrators managed to bring the WTO meeting to a humiliating halt. In that sprawling group of human rights activists and environmentalists, there were thirty thousand trade unionists, affiliated with the AFL-CIO, then the single federation of U.S. unions. It was an amazing sight—“Teamsters and Turtles,” marching together for economic and environmental justice. For one chaotic week, a disparate movement for social change appeared to find some common ground. The potential of alliances between labor and other social movements seemed real. Activists longing for political passion on the left and those imagining new movements for social justice saw the uprising in Seattle as a triumph and a cause for hope.
In the years following Seattle, the anti-globalization movement endured. We saw World Social Forums in Porto Alegre, Brazil and Mumbai, India and free trade protests in Central America. But the U.S. labor movement was absent for the most part. The promise of a “Teamster-Turtle” alliance dimmed. In 2005, seven unions seceded from the AFL-CIO to form a second labor federation, Change to Win. There wasn’t much to sustain hope for a broad progressive coalition—or even a unified labor movement. By 2008, when the film Battle in Seattle appeared in U.S. theaters, the movie already seemed old to me. The run was short, and I missed it. But by the time the video came out months later, Barack Obama was our president; the word “hope” was resonant once again; and a new wave of protests had erupted during the April 2009 G20 summit meeting in London. A movie about Seattle seemed relevant, after all.
I was surprised to discover that the film is not a documentary but a fictionalized version of events in Seattle. As such, it’s a good movie with a star-studded cast, including Charlize Theron, Woody Harrelson, and Ray Liotta. Other lesser-known young actors are all terrific. Written and directed by Stuart Townsend, the film makes occasional use of documentary footage, starting with a brief but skillfully constructed history of the WTO, from its origins in the 1947 General Agreement on Tariffs and Trade (GATT) to plans for the 1999 summit meeting in Seattle. Almost seamlessly, this documentary segment dissolves and the action begins with two young organizers unfurling an anti-WTO banner from a crane, high over the city of Seattle. From that point on, the movie is exciting and inspiring.
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