Letter 2 America for January 21, 2014

Dear America,

On Friday, David Brooks wrote a piece in the New York Times about what is being discussed these days under the rubric "income inequality."  He wrote five or six hundred words, but he could have used just six: "You know what we conservatives think."  His thesis is that the problem of income inequality is not that at all.  Income inequality, he opines, is the effect, not the cause.  Of course, his opinion is a peremptory resolution of the age old chicken and age paradigm as it applies to our hyper-capitalist society.  For example, he cites a study to demonstrate that raising the minimum wage has a meager effect on poverty if any at all, but he eschews discussion of the moral issue suggested by minimum wages that are insufficient to live on coming from corporations like McDonalds, which earns enormous amounts for its executives and shareholders while stifling any instinct to exceed expectations among the workers behind the counter and over the grill by capping their prosperity with practical ceilings on what they can expect to earn.  Is that the result of poor decision making among the poor and economically marginal in our society, or is it vice versa.  Does a life of futility lead to indifference to the options one elects because none of them make any difference in the long run.  When people like David Brooks pontificate on the subject of how the poor are their own worst enemies because they read some professorial treatise on the matter, it becomes necessary to look at the anecdotal evidence, which abounds.  But there is one case that is seminal in this debate, and that is the case of Boeing, the airplane manufacturer located in the far northwest corner of the United States, which not too long ago threatened to move its manufacturing facilities to South Carolina, a transition that would no doubt be enormously expensive.  But the plan is off, for now at least, and the reason puts the lie to Brooks' contention that the working poor have some kind of control over their lives if only they would exercise it prudently and we would improve their educations.

Boeing has been in Washington state for decades, and it is enjoying profitability that would be the envy of many corporations these days, and corporate profits are generally pretty good.  But Boeing called a vote on a contract offer three years before the current workers' contract ends in 2016 in an effort to effect austerity savings.  The offer agreed to provide the workers with an increase in the pension contributions Boeing makes on their behalves, but the company insisted on changing the pension program from a "defined benefit" plan under which they are entitled to a percentage of their yearly earnings each year after retirement depending on their years of service to a 401(k) plan.  In other words, Boeing wanted to transform what amounts to a private social security system with reliable benefits into a roulette game in which the worker is vulnerable to vicissitudes of the stock market, that is, to the success or failure of companies like Boeing.  That is what the vote last November was about.  But there was a vote in June 2011 that presaged all this.  On that occasion, Boeing asked the union to agree under contract not to strike for the next 10 years.  The union declined to give up its members' bargaining power, and that is when a move to South Carolina had its nascency.  That is when the trouble began.  And at the heart of it all was the Republican governor of South Carolina, who brokered tax breaks for Boeing, on top of the prospect of a plant without a union in a state that has open shop laws.  Of course, the union in Washington State immediately filed a complaint with the National Labor Relations Board (NLRB), which filed suit against Boeing alleging retaliation against the workers and their union, which forced Boeing back into the weeds to contemplate its next move, which came this past fall in the form of the pension plan demand.

It has to be admitted that this series of events doesn't involve the poor.  Everyone from the machinists to the engineers at Boeing makes good money, but the tactics being employed by management are virtually universal among corporations these days: if you want to work, give us what you've got now so that we can give you less.  And because there is a paucity of well-paid work in this country now--largely because the moneyed class is managing our economy and finances for their benefit exclusively...shipping jobs to places with cheep labor and gambling on whether we will be able to pay our mortgages or not--the leverage is in the hands of management, and labor is being driven back toward the status it held at the turn of the last century, which was barely better than indenture.

The Boeing anecdote makes the broader point that the momentum in labor relations has shifted toward management, and the Republican establishment is nurturing the trend with tactics like filibustering the appointment of commissioners to the NLRB thus depriving the Board of the quorum it requires to take actions like the suit against Boeing two years ago.  So Boeing has an open field in which to run, the pension issue being the ball they are currently advancing, and the government has been hamstrung, so the union is on its own against a management team that is obdurate even though it is prospering along with the company, and a legal team that no doubt will use the litigation process to the advantage of the company in order to thwart any effort to vindicate the rights of the workers and their union.  It is the dynamic of modern American capitalism that is in question when we discuss income inequality, not whether the people on the lower end of the economic ladder are doing all they can to help themselves.  It is whether the deck is stacked against them that is at the core of the dialectic, not whether business is the root or the branch of American wealth, and that is where decent conservatives like David Brooks go wrong.  They think that if they can point to a numerical support for the notion that business is benign and the fault of the poor is that they don't try hard enough.  People like Brooks don't understand that it is hard to get up when someone is kicking you all the time, no matter how many years you go to school.

Your friend,

Mike