Category: Fall 2012

Letters

To the Editors:

In the Spring 2012 issue of New Labor Forum, Nelson Lichtenstein made a powerful argument that the American labor movement should stop describing itself as “middle class” and use the term “working class” instead. Here are two additional reasons why Lichtenstein is right.

First, most of the labor movement’s core constituency undoubtedly identifies as working class. While labor leaders and progressives were abandoning the concept, workers held firm. According to the General Social Survey, the authoritative database for political scientists, 45.6 percent of adult Americans self-identify as “working class,” compared with 46.2 percent “middle class,” 5.4 percent “lower class,” and 2.8 percent “upper class.”1 The percentage identifying as working class is down only 2.5 percent since 1972, the first year of the survey.

Second, the middle class isn’t really a class; it’s a status group.2 This might sound like an arcane theoretical distinction, but it can make a huge difference in practice. Class is about power relations among groups that occupy distinctive positions in a system of production. Working-class people, for example, work for wages.3 Status, on the other hand, is about the relative position of groups on a vertical scale measuring something desirable like income. Middle-class people are higher than lower-class people and lower than upper-class people.

As an identifier for the labor movement, class beats status hands down. Class offers the possibility that, instead of competing with each other for relative status, individuals may recognize a shared class interest, join together in economic and political action, and thereby change the structure of power to their advantage. For the working class, this entails democratization of industry by means ranging from unions to government regulation and ownership. By contrast, taking money from the lower and upper classes and giving it to the middle class changes no structure. Worse yet, as Lichtenstein points out, the interests of the middle income group can conflict with those of the lower income group, which is why the right popularized the term in the first place.

Being working class means something. A member of the working class is a worker. A member of the middle class is . . . ah . . . um . . . a middler? As John Lennon put it, “a working-class hero is something to be.” (A few days before his death, Lennon claimed that the song was supposed to be “sardonic,” but when it was released he said that it was “for the people like me who are working class—whatever, upper or lower—who are supposed to be processed into the middle classes, through the machinery.”) A worker’s claim to respect is based on labor; a middler’s claim to respect is based on being better than a lower-class person. This helps to explain why the term “working class” has so much more (in Lichtenstein’s words) “emotive power and historic resonance.” I doubt that many labor activists today use the term “middle class” out of conviction. Why not say what we really mean? It is long past time for the labor movement to stop regurgitating right-wing class terminology, start reinforcing the self-perceived working-class identity of our core constituency, and begin helping the millions of workers who currently identify as middlers to come home.

—James Gray Pope

 

 

Notes:

1. National Opinion Research Center, General Social Survey, Subjective Class Identification (www.norc.uchicago.edu/ GSS+Website/Browse+GSS+Variables/ Subject+Index). Figures are for 2006, the most recent year available. Respondents were questioned: “If you were asked to use one of four names for your social class, which would you say you belong in: the lower class, the working class, the middle class, or the upper class?” (Variable: Social Class: Subjective Class Identification.)
2. For an especially clear and succinct explanation of the distinction between class and status, see Martha R. Mahoney, Class and Status in American Law: Race, Interest, and the Anti-Transformation Cases, 76 S. Cal. L. Rev. 799, 823-26 (2003).
3. Or, more precisely, sellers of labor power other than those who exercise control over the labor power of others. Erik Olin Wright and Luca Perrone, “Marxist Class Categories and Income Inequality,” 42 American Sociological Review 32 (1977): 34.

 

On the Contrary

Four and a half years after the crash, the American economy sputters along. Twenty-three million workers cannot find full-time work, and the percentage of the employed population has hardly budged since it hit bottom two and a half years ago. Republicans argue that we should reduce the deficit (a disastrous policy); Democrats urge a new stimulus (a necessary step, but not sufficient to repair our economy). Missing from our national discussions about economic revitalization—even in arguments made by many of the nation’s progressive economists—is the need to restore a badly damaged manufacturing sector.

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Looking for Virtue in All the Wrong Places

Coming Apart: The State of White America, 1960-2010
By Charles Murray
Crown Publishing, 2012

Reviewed by Jack Metzgar

Charles Murray is concerned that the white “lower class” (now about 20 percent of white folks) is “economically ineffectual” because they are less virtuous than previous generations. In the aggregate, according to Murray, all Americans are less virtuous than we used to be, but the main point of Coming Apart is that the decline in virtue among upper-class whites (the top 20 percent) has been relatively minor and has now stabilized, whereas the bottom fifth is steadily and dramatically declining in virtue. For Murray, there is a kind of moral rot at the bottom that threatens to “destroy the kind of civil society that America requires,” slowly strangling what Murray calls “the American project,” as the rot moves up the class ladder, undermining previously sturdy working and middle classes.

Murray is clear about what he calls “the founding virtues.” There are only four of them: marriage, industriousness, honesty, and religion. Murray does almost nothing to justify this choice of virtues, and most reviewers have just accepted them as specified. But they strike me as extremely arbitrary and limited. Though he quotes de Tocqueville when he writes that Americans’ “morals are far more strict . . . than elsewhere,” he does not mention de Tocqueville’s emphasis on the extraordinary “equality of condition” in 1830s white America as a potential founding virtue. More strangely, since Murray repeatedly identifies himself as a libertarian conservative, why is liberty not a founding virtue? I can see why, as a libertarian, he might not want to include “fraternity,” but are not the American founders’ commitment to liberty and equality (however hypocritical at the time) part of our core values and virtues?

Given the virtues Murray has chosen, he has no difficulty in showing that the top 20 percent of whites are more likely than not to be married, have more and steadier work, experience and commit less crime, and attend church than the bottom 20 percent. His claim that steadier work indicates greater “industriousness” is highly unlikely, as is the tenuous relationship between crime statistics and holding “honesty” as a virtue. Likewise, declining commitments to marriage and religion, though they might be worrying to traditional conservatives on a practical level, also reflect late-twentieth-century gains in freedom of thought and action. Murray’s various measures of virtue take more than the usual advantage of the standard socialsciences practice of first explaining all the imperfections of the available data and then using that data as if it had no imperfections. Nonetheless, I want to try to take seriously his stated concern about a decline in values and virtues, because I suspect that broad concern resonates pretty strongly within the working class itself, white and otherwise.

Most of Coming Apart is built around statistical comparisons of a fictional (i.e., statistically regressed) upper-class white “Belmont” and a fictional working-class white “Fishtown.” Late in the book, Murray introduces the “Real Fishtown” and includes a string of quotes from people who actually live there (or did in the late 1990s, when Fishtown was the subject of the doctoral dissertation Murray draws on). He finds that most of the people in Fishtown define themselves as family people who feel beleaguered by what they see—or what Murray sees—as the low-class moral decay that is threatening to engulf what was once a tight-knit, upright, and relatively prosperous community.

This rare bit of direct observation in Murray’s book resonates with my own extended family in a deindustrialized, overwhelmingly white former mill town. The poverty rate there is now more than 30 percent, and the unemployment rate has been in or near double digits for more than twenty years. For decades now, the adults in my family have been self-consciously fighting the moral rot Murray and the real Fishtown people fear, and though they started from a strong place and have fought valiantly, the rot seems to be growing with each generation, both outside and now inside the wide extension of the family.

As a semi-annual visitor, I think I am more aware than they are of the physical deterioration of our hometown and of how the ongoing economic catastrophe has been steadily eroding their lives and culture. By my lights, they make the same mistake Murray does, by focusing on the moral struggle to maintain individual integrity rather than the grinding economic circumstances that make that struggle steadily more difficult. This means they focus on how each person handles unsteady employment, not the reasons for its unsteadiness. They focus on how so-and-so just “laid around for weeks” after losing his job, or how somebody else finally struck back at an abusive boss and is still paying the price. Individual sobriety watches are common topics of family discussion, not the widespread lack of health insurance that had one of the twenty somethings trying to pull his own painfully impacted teeth while drunk.

The reasons for this misplaced focus, however, are different from Murray’s. My relatives are not unaware of the devastating impact that plant closings, and their related economic declines, have had on their own lives and the prospects for young people. But these economic forces are seen as irrelevant because nothing can be done about them, whereas getting sober and staying sober, enduring bad bosses, or making the best of bad situations is something each and every one of them can accomplish through feats of steady and relentless willpower. I agree with the old-timers in my generation, with the majority in Fishtown, and with Murray that there has been a long-term decline in virtue among the white working class in the U.S., but for me the virtues are somewhat different, and there is plenty the government could do to strengthen them.

Of Murray’s “founding virtues,” it is undoubtedly true that working-class whites are not as committed to marriage and religion as my generation was. Industriousness and honesty are another matter. Yes, as poverty increases there is more crime and personal bankruptcy (Murray’s measures for “honesty”), but I don’t see any diminishment in the down-to-earth authenticity that so contrasts with middle-class status-positioning and calculating self-regard. In any case, nobody in my family worries about a decline in personal honesty, even among the current crop of teenagers. Industriousness, on the other hand, is a common worry, but the worry is more complicated than Murray could follow. On the one hand, there is concern about so-and-so’s ability to hold a job, but on the other, the older generations are well aware of and appalled by how sped up and stressful (and poorly paid) work has become. And there is a lot of family pride in almost everybody, even the unsteadily employed, being “good workers when they have work.”

Illogically, but fortunately, Murray does not stick with his founding virtues, however, as he promiscuously adds other virtues as they seem handy for his purposes. One of his add-ons is social capital and civic engagement. Using Robert Putnam’s studies, he documents that these now famous national declines are much steeper in the working class than in the professional/ managerial middle class. Indeed, when it comes time for Murray to bemoan the lack of religiosity, his moaning is less about the loss of faith and more about the decline in regular church attendance and lack of involvement in the rank-and-file activities of a church. This is a good insight, I think, as Murray focuses on churches as social institutions where working-class men and women have traditionally developed leadership skills and built social networks beyond (but intersecting with) their families and into a larger community beyond the church.

Likewise, Murray mentions, in passing, the role of labor unions in building social capital. In my hometown, once an especially strong union town, fewer members of the family belong to unions because there are far fewer union workplaces—but even those who still do are not active as local leaders and stewards, as their fathers were. This is the real rot I see across the generations in my own extended family—a precipitous decline in mediating institutions like churches, unions, and ethnic lodges; and in what sociologists call collective efficacy, a sense that, collectively, people can affect their circumstances in ways it is impossible for individuals, or even a very large extended family, to do. When there is no sense of the potential for collective action and little engagement in collective endeavors of any sort, when any hope of changing larger circumstances is abandoned, nothing is left but individuals engaged in endless downward cycles of strenuous efforts to make the best of bad situations.

Charles Murray is blind to all this, of course, because he never actually talked with the people of the real Fishtown. As he claims of the white cognitive elite (the top 5 percent of whites who are decision-makers) that he says are “coming apart” from the national community, Murray lives in a particularly thick bubble. Still, his statistical correlations and concern for the moral well-being of working-class whites could be insightful if he were not himself so morally obtuse and ideologically incoherent.

In the book’s final chapter he, again, evokes the real Fishtown (i.e., folks quoted in a late-1990s doctoral dissertation) and, again, expresses sympathy for the family people. He restates his thesis like this: “The United States is stuck with a large and growing lower class that is able to care for itself only sporadically and inconsistently. Its concentration in Fishtown puts more and more pressure on the remaining Fishtown families who are trying to hold the line.” Murray has no sympathy for the “new white lower class” (let alone the “older” lower classes of color) because he thinks they have made values choices to be sexually promiscuous and unmarried, lazy, dishonest, and irreligious, and thus are reaping the rewards of those values. But you’d think he might want to explore what a democratic community could do to lend a hand to those still-virtuous “families who are trying to hold the line.” Instead, like Pontius Pilate, Murray finds no blame (and even finds admirable virtue) among the majority of family people in the white working class, but he washes his hands of their fate, even though he thinks their demise will destroy everything that is good and everything that is exceptional about the America he professes to love and that he thinks has been the hope of the world since 1776.

I have long respected thoughtful conservatives’ emphasis on virtues and values and, as I have tried to suggest, these concerns resonate widely. Though political conservatives bring different assumptions and come to different conclusions than I do, the writers and scholars among them have not usually been as morally feckless and illogical as Murray is in Coming Apart. Mainstream and progressive reviewers have challenged his statistical manipulations and politically cagey rhetoric, but by summarizing his “arguments” they greatly exaggerate the logical coherence (and thus the depth) of his thinking.

Most reviewers and TV interviewers, for example, take Murray at his word that he is simply describing a problem without addressing causes and solutions. They must not have read Murray’s last chapter, in which “the welfare state” (very loosely and broadly defined to include Social Security and Medicare) is the one and only cause of our declining moral fiber. How does it do this? By “taking the trouble out of life”!

In the end, Charles Murray has nothing serious to say about the state of white America. Conservatives like David Frum are right to react with panic at the intellectual and moral vacancy of Murray’s latest effort. Controlling the public discourse for three decades has weakened conservative thought. It has not only lost the edge it had when it was an underdog battling the “liberal consensus”—if Murray’s line of thinking is representative, conservative thought has also lost the capacity to reengage its own core values and principles to honestly address our national problems. In its desperate attempt to hold on to its formerly effective but now empty shibboleths, it is increasingly reactionary, not conservative. That makes it especially bold and dangerous at the moment, but it is already dying from the head down.

 

About Our Contributors

John Atlas is a long-time public interest lawyer and the author of Seeds of Change: The Story of ACORN, America’s Most Controversial Antipoverty Community Organizing Group. He can be reached at jatlas4@comcast.net.

Ben Becker is a Ph.D. candidate in U.S. history at the City University of New York’s Graduate Center. He can be reached at bbecker@gc.cuny.edu.

Peter Dreier teaches politics at Occidental College. His latest book is The 100 Greatest Americans of the 20th Century: A Social Justice Hall of Fame, and he can be reached at dreier@oxy.edu.

Liza Featherstone is a contributing writer at the Nation and her writing on labor issues has appeared in Slate, Salon, Newsday, the New York Times, and many other publications. She is the author of Selling Women Short: The Landmark Battle for Workers’ Rights at Wal-Mart and the co-author of Students Against Sweatshops. She teaches in the Union Semester program at the Murphy Institute and in NYU’s journalism school, and can be reached at lfeather@panix.com.

Steve Fraser is a writer, editor, and historian. He can be reached at fraser927@aol.com.

Joshua B. Freeman teaches history at Queens College, the CUNY Graduate Center, and the Murphy Institute. He is currently writing a history of the United States since World War II, and can be reached at JFreeman@gc.cuny.edu.

Fernando Gapasin is a union organizer, labor educator, and former professor of Industrial Relations and Chicana/o Studies. He is the author of “United Farm Workers” in The Oxford Encyclopedia of Latinos and Latinas in the United States and co-author of Solidarity Divided: The Crisis in Organized Labor and a New Path toward Social Justice. He can be reached at fgapasin@earthlink.net.

Nichole Gracely has written about Amazon for www.dissidentvoice.org. She can be reached at nicholegracely@gmail.com.

Lois Rita Helmbold is a retired professor and former chair of the Women’s Studies Department at the University of Nevada-Las Vegas. She is currently a Fulbright Senior Lecturer in the American Culture and Literature Department at Ege University (Izmir, Turkey), and can be reached at lois.helmbold@gmail.com.

Mark Levinson is the chief economist of the Service Employees International Union. He can be reached at mark.levinson@seiu.org.

Kathryn Lofton is the Sarai Ribicoff Associate Professor of Religious Studies and American Studies at Yale University. Her first book, Oprah: The Gospel of an Icon, used the example of Oprah Winfrey to explore the formation of religion in modern America. She is currently working on several projects, including a study of sexuality and religion; an analysis of parenting practices in twentiethcentury America; and a religious history of Bob Dylan. She can be reached at kathryn.lofton@yale.edu.

Stephanie Luce is an associate professor at the Murphy Institute, City University of New York and the author of Fighting for a Living Wage. She studies low-wage work, globalization and labor standards, and labor/community coalitions, and can be reached at stephanie.luce@mail.cuny.edu.

Jack Metzgar is Professor Emeritus of Humanities and Social Justice at Roosevelt University in Chicago, and the author of Striking Steel: Solidarity Remembered. He can be reached at jmetzgar@roosevelt.edu.

David S. Pedulla is a Sociology and Social Policy Ph.D. candidate at Princeton University. His research examines the consequences of the rise in precarious labor utilization, race and gender stratification in the labor market, and the ways that unemployment shapes political attitudes. He can be reached at dpedulla@princeton.edu.

Robert Pollin is a professor of economics and co-director of the Political Economy Research Institute (PERI) at the University of Massachusetts-Amherst. He can be reached at pollin@econs.umass.edu.

James Rhodes is a Simon Research Fellow in the Department of Sociology, University of Manchester. He has also spent time as a Visiting Scholar at the Center for Working-Class Studies at Youngstown State University. His research interests are focused on race, class, inequalities, and deindustrialization, and he can be reached at james.rhodes@manchester.ac.uk.

Jeffrey Sklansky teaches in the Department of History at the University of Illinois-Chicago. He is writing a book about struggles over currency and banking in early America, and can be reached at sklanskj@uic.edu.

Heather Ann Thompson is Associate Professor of History in the departments of African American Studies and History at Temple University. She writes regularly on labor and urban issues as well as the current carceral state, and is currently completing the first comprehensive history of the Attica Prison uprising of 1971. She can be reached at hathomps@temple.edu.

Natasha Trethewey has published three collections of poetry, including Native Guard, which received the Pulitzer Prize. She is also the author of a book of creative non-fiction, Beyond Katrina: A Meditation on the Mississippi Gulf Coast. In 2012, she was named the nineteenth U.S. Poet Laureate by the Library of Congress. Her latest collection of poems, Thrall, will be released this fall.

Kristin Wartman is a food writer living in Brooklyn. She is a Certified Nutrition Educator, focusing on the intersections of food, health, politics, and culture. Her writing appears regularly in the Huffington Post, Civil Eats, and Grist. She’s written for the Atlantic, Tikkun magazine, and Critical Quarterly. She can be reached at kristin.wartman@gmail.com.

Jeannette Wicks-Lim is an Assistant Research Professor at the Political Economy Research Institute at the University of Massachusetts-Amherst. Her publications include A Measure of Fairness: The Economics of Living Wages and Minimum Wages in the United States (co-authored). She writes a regular column for Dollars and Sense magazine, and can be reached at wickslim@peri.umass.edu.

Matt Witt is the director of the American Labor Education Center and coordinates TheWorkSite.org, a website that provides educational tools for more effective communications and grassroots organizing. He can be reached at mattwitt@theworksite.org.

The Prison Industrial Complex: A Growth Industry in a Shrinking Economy

As tough as life was for American workers at the close of the twentieth century, the dawn of the twenty-first century has proven even more challenging. Despite official claims of recovery, polls show that, for the great majority of Americans, the economy is broken.

By March of 2012, not only was the unemployment rate for American workers still 8.4 percent, but for some segments of the U.S. working class, namely young African-Americans, it was a catastrophic 40.5 percent. The situation for organized labor was equally dire. The union membership rate in the United States had been 20.1 percent in 1983, with unions representing 17.7 million workers; by 2011, that rate had fallen to 11.8 percent and only 14.8 million were still in a union. Without a doubt the American labor movement is facing a serious crisis.

Yet there is another crisis fraying the economic and social fabric of America’s poor and working-class communities- one that labor leaders have largely ignored. There is a serious carceral crisis in the U.S.—one created by several decades of tough-on-crime policies that ultimately ensnared more than 7.1 million Americans in the nation’s criminal justice system and led to the actual imprisonment of a staggering 2.3 million of them for record lengths of time. Importantly, this crisis, too, is responsible for record job losses, increased unemployment, and the impoverishment of several generations of children.

Indeed, the carceral crisis and the crisis facing today’s labor movement are intimately connected. As much as anti-union laws, weak health and safety enforcement, and the exporting of jobs to low-wage countries have undercut the American labor movement over the last forty years, corporate success at growing prisons and accessing their enormous captive labor force has also proven highly detrimental to poor and working-class Americans. It is time for the American labor movement to care about the carceral state.

Paving The Way for Prison Labor

In the late-nineteenth and early-twentieth centuries, American workers well understood that companies would do whatever they could to drive down the price of labor. Indeed, for decades after the Civil War, workers—from North to South—watched in dismay as business owners, time and again, succeeded in passing anti-union laws, breaking strikes, and, most alarmingly, in keeping labor costs low by bypassing free-world laborers altogether in favor of convict leasees. Their activism, however, eventually led to the passage of several powerful laws that made prisoner labor far less easy to access as well as less profitable to utilize.

In the wake of New Deal legislation such as the Hawes-Cooper Act, the Ashurst-Sumners Act, and the Walsh-Healey Act—which prohibited the sale of prison labor goods to any entity other than state-owned institutions and out- lawed the sale of such goods across state lines— and newly empowered by the Wagner Act, the American labor movement began to thrive. Thereafter, American workers and the unions that represented them lost interest in what was happening vis-à-vis the politics of crime and punishment in this nation. Importantly, however, companies did not. Indeed, they had never abandoned their desire to access cheap labor and so, while the labor movement was paying little attention, companies eventually mobilized to re-access the cheapest labor supply of all: America’s prisoners. By the mid-twentieth century, companies mobilized to re-access the cheapest labor supply of all: America’s prisoners.

By the 1960s, and as Lyndon Johnson was launching the country’s “war on crime” with his Law Enforcement Assistance Administration (LEAA), politicians and businessmen began discussing how to link work and imprisonment in newly productive ways. What initially were conceived of as job training programs in the nation’s ever-expanding penal system soon became experiments in “Free Venture”— new collaborations between the public and private sectors, and plans to “modernize prison industries by encouraging them to adopt free world business practices.” The goal? Eventually to have the “proceeds from the sale of prison- made goods and services cover . . . the total cost of production” of anything made behind bars in America.

Corporate attempts to re-access prison labor were, however, still hampered by New Deal-era laws. So, as prison populations began to soar, the business community stepped up pressure on legislators to reconsider such barriers. In 1979, with the passage of the Justice System Improvement Act, they were once again able to tap into a seemingly limitless supply of prison labor and the profits it promised.

This major corporate victory, like others during this period, depended on the fact that in 1973 the nation’s most conservative businesses and tough-on-crime politicians had come together. They found a common voice in the American Legislative Exchange Council (ALEC), a powerful new political lobby committed to beating back unions, locking people up, and accessing cheap labor in ways that businesses had not been able to do for nearly a century.

Making Inmate Labor Lucrative 

By the 2000s, companies seeking to profit from the nation’s post- 1960s embrace of mass incarceration (such as Walmart, Hewlett-Packard, and McDonald’s) had joined ALEC along with private prison corporations such as the Corrections Corporation of America (CCA), GEO Group, and Cornell Corrections who were “lobbying for and passing harsher sen- tencing for non-violent offenses including three-strike laws, mandatory sentencing, and truth-in-sentencing.” They did so by spending a fortune in the political arena.9 In the first decade of the twenty-first century such corporations “spent over $22 million lobbying Congress” with the CCA hiring “204 lobbyists in 32 states” and GEO hiring “79 lobbyists in 17 states.”10 They also expended millions on political campaigns, including at least $3.3 million at the federal level and, since 2001, “more than $7.3 million to state candidates and political parties.”

That investment paid off. By 1995, for example, corporations had managed to pass a law that allowed them to exploit a loophole in the 1979 Justice System Improvement Act’s Prison Industry Enhancement Certification Program and, more specifically, to sidestep the burden of its rule that prisoners be paid the minimum wage. After the Prison Industries Act became law, monies intended for inmate wages could also be diverted to constructing work facilities within penal institutions and toward other incentives making prisons far more lucrative places than free-world factories.

By 2011, prisons had become appealing places for corporations to do business. As one study noted, “Companies are attracted to working with prisons because inmates represent a readily available and dependable source of entry-level labor that is a cost-effective alternative to work forces found in Mexico, the Caribbean Basin, Southeast Asia, and the Pacific Rim countries.”

The Economic Impact of Prison Labor 

The fact that corporations, states, and the federal government now have easy access to an enormous supply of workers who often command little more than pennies per hour means that, today, a full eighteen federal prisons are in the business of making furniture and none are paying prisoners the $13.04 an hour that furniture factory workers on the outside can command. Similarly, twenty-two federal prisons are now in the business of making textiles because not a single prisoner they put to work can demand the $10.95 per hour that textile workers in the free world earn. In short, the fact that federal prisoner wages range from $0.12 to $1.15 per hour makes it illogical for savvy business people to imagine manufacturing goods in—or state agencies to imagine buying goods from—free-world factories.

At the state level, the contrast between prisoner and free wages is equally stark. The minimum wage in the United States is $7.25 per hour, but state prisoner wages range from as low as $0.13 for those unfortunate enough to work in one of Nevada’s prison camps, to a meager $0.32 even if they work for private industries in states such as South Carolina because certain jobs do “not fall under Federal Minimum Wage requirements.” Notably, even in state prisons where prisoner workers can command the real-world minimum wage, the majority of that wage is kept by the state in ways that still benefit businesses over people.

Indeed, prison labor has taken real jobs from real people in manufacturing, farm work, and even in day labor. According to Vanderbilt University’s Noah Zatz, “well over  six hundred thousand, and probably close to a million inmates are working full time in jails and prisons throughout the United States” which, of course, matters when scores of men and women living outside of prison walls live in daily fear of the pink slip.

Consider the case of Shaw Industries. When this major corporation decided to use prisoners to make its pricey Anderson Flooring brand, its profits rose while the families of those workers who used to make that flooring and the families of the prisoners who now make it grew poorer. Similarly, workers at Tennier Industries in Tennessee, who used to make flak jackets for military clothing, faced unemployment and poverty when this company lost its regular $45 million contract to the Federal Prison Industries, and, again, their paychecks did not go to the scores of federal prisoners now forced to make those same jackets. Those prisoner workers also didn’t make enough money to ensure that their families ate and had a roof over their heads.

Not only has a return to prison labor led to concrete job losses for workers outside of prison, and the higher exploitation of workers on the inside—the ability to force the incarcerated to work has directly helped state government attempts to bust unions. For example, anti-union governor Scott Walker’s intention to eradicate collective bargaining rights for public sector workers in Wisconsin via Act 10 was bolstered greatly by the fact that his state agencies could force inmates to “do landscaping, painting, and [other] basic maintenance around the county that was previously done by county workers.”

Indeed, because prisoner laborers can now be used to work on virtually any state project if the prison that contains them is awarded that contract—and because in many states such as Virginia, Ohio, New Jersey, Florida, and Georgia “inmates are not paid for their work, but receive time off their sentences”—public sector unions have had an even harder fight for survival than they might otherwise have had. It is time for the American labor movement to wake up to the fact that not just those who run afoul of the law, but all American workers have paid a high price for the politics and policies of mass incarceration.

Gross Health And Safety Violations

Beyond the loss of specific jobs, the use of prison workers has enabled corporations to side-step health and safety regulations in the penal workplace. A case in point here is the highly toxic computer and electronics recycling industry whose work is now done by state prisoners in places like South Carolina and by federal prisoners working in factories run by the Federal Prison Industries (UNICOR) “Recycling Business Group.” From federal prisons in Elkton, Ohio to Fort Dix, New Jersey, UNCIOR is not simply offering the nation “competitively-priced electronics recycling” thanks to the rock-bottom wages it can pay its prisoners; it also enjoys the cost savings to be had from running a workplace largely cut off from the probing eyes of safety and health inspectors. The result has been lower production costs, but there is a serious health and safety crisis for prisoners and guards alike.

So bad were the health and safety conditions in the computer recycling factory at Marianna, Florida’s Federal Prison Camp that female prisoners—who were told to remove valuable processors and cathode ray tubes from computers by smashing them with hammers and other crude instruments—were engulfed in thick clouds of cadmium and lead dust that covered surfaces throughout the prison and coated the windshields of cars parked outside. Yet “none of the prisoners or staff were supplied with masks, gloves, coveralls, or other personal protective equipment,” and when they asked about possible risks to their health they were told not to worry about it: “Nobody wanted to hear us.” Eventually guards and prisoners began to show serious signs of exposure to toxic materials. [In Florida, female prison laborers] were engulfed in thick clouds of cadmium and lead dust.

According to a 2010 investigation by the Department of Justice, “Staff and inmates were repeatedly exposed to toxic metals—cadmium and lead, workers [were] not adequately pro- tected from exposures, workers and inmates [were] not properly monitored for potential exposures, [there was a] failure to report inmate injuries, inmates were made to load shipping containers with e-waste, which were then exported; and UNICOR concealed actual working conditions from inspectors by cleaning up production lines before they arrived.”

But scathing reports have not stopped corporations dealing in poisonous materials from using prison labor. In the wake of its catastrophic explosion in the Gulf of Mexico, BP Oil Corporation chose to hire prisoners for its clean-up operations because it could work those men an average of seventy-two hours a week and pay them little to nothing. It also could get away with providing only flimsy coveralls and gloves as protection from extensive exposure to crude oil and chemical dispersants—all of which “damage every system in the body, as well as cell structures and DNA.” Prisoners had no choice but to accept these terrible working conditions. As the Nation pointed out in its recent expose of BP’s use of prison labor, “work-release inmates who would rather protect their health than participate in the non-stop toxic cleanup run the risk of staying in prison longer.”

Does Prison Labor Produce Any Social or Economic Benefits? 

Notwithstanding prison labor’s many deadly pitfalls, Americans remain susceptible to the idea that a large penal system might offer society other economic benefits. Isn’t it the case that putting prisoners to work increases their employment opportunities once they are released? Isn’t it true that building more prisons means finally providing jobs to Americans who lost their jobs to deindustri- alization? Isn’t it possible that the rise of the carceral state has been good for unions that represent, say, guards? The answer to all of these questions is a categorical “No.”

Despite the many claims about the benefits of prison labor for the incarcerated, research by economists, criminologists, and sociologists alike shows clearly that the formerly incarcerated have significantly higher lifetime unemployment rates than other workers do— even when they have been used as a cheap labor force. According to one estimate, “ex-offenders are only one-half to one-third as likely as non- offenders to be considered by employers” and even though “nearly half of the state inmate population and almost all of the federal inmate population has some sort of work assignment while incarcerated,” studies indicate that “these jobs do not always provide work experience that appeals to employers on the outside.”

But what of the possible benefits of prison growth for workers living outside of prison walls? Might locking up more people at least improve the economic security of, say, those living in our nation’s most depressed rural regions? No. As one study—representing twenty-five years of economic data from rural New York State—makes clear, there has been “no significant difference or discernible pattern of economic trends between the seven rural counties in New York that hosted a prison and the seven rural counties that did not host a prison.”

Not only did counties that hosted new prisons receive “no economic advantage as measured by per capita income,” but to the extent that there were any differences between non-prison and prison counties, “the non- prison counties performed marginally better.” This point has been made by more than one study. Indeed, another one, from Washington State University, found that the construction of new private prisons actually “impeded economic growth,” in part because, “as government funds are allocated to prison construction, other public programs suffer.”

Even those who land a prison job, such as a security staff position, have benefitted from mass incarceration far less than they realize. Firstly, jobs in the penal sector are far less well-paid than the jobs people used to have within the manufacturing and agricultural sectors. This is particularly true when such jobs are in private prisons since companies, such as the CCA, are particularly determined to keep wages low (with guards making two-thirds of the salary paid in public prisons) and the prison workplace union-free.

Just as importantly, prison employees can’t count on the penal institutions to hire their kids—the next generation of America’s workers. Even though prison populations have expanded, cost-cutting measures on the part of the federal government, state and local municipalities, and private companies have simply meant more prison overcrowding—not more prison jobs. Indeed, according to the Bureau of Labor Statistics, the “employment of correctional officers is expected to grow by 5 percent from 2010 to 2020, slower than the average for all occupations.” Although guard unions are right to speak out against the fact that closing prisons too often leads to more severe overcrowding in the prisons that remain (and, thus, even more dangerous working conditions), they should not imagine that prison jobs in any way solve our nation’s social and economic problems.

Labor’s Stake In The Carceral State

History teaches us vital lessons that we ignore at our peril. Indeed, if corporations continue to have their way, there eventually will be even more Americans living behind bars, an even greater loss of free-world jobs to prison jobs, and—with new technological advances— even less need for security staff to monitor the nation’s captive workforce. Notably, when thirty-four private companies that produce thirty different product lines and provide a variety of services in adult prisons in eighteen different states were asked whether they were interested in expanding their operations into juvenile facilities, they responded with great enthusiasm.

Before the American working class is faced with job losses and wage competition not only from the mass incarceration of adults in this country, but also from children in the nation’s equally overcrowded juvenile facilities; before engineers come up with new technologies to eliminate even the jobs that do exist in the prison sector; and before even more of our citizenry is locked up, it is time for the labor movement to speak out against today’s carceral crisis. It must demand an end to practices such as stop-and-frisk. It must insist on the repeal of draconian drug laws. It must demand sentencing reform. In short, it is time to really heed AFL-CIO president Richard Trumka’s recent and powerful call for worker unity: “Brothers and sisters, we can change America if we do it together.” Because, whether one works behind or beyond prison walls, there is but one American working class.

 

 

Marxism In The Age Of Financial Crises: Why Conventional Economics Can’t Explain the Great Recession

The crash and rescue of the banking system and the surge of unemployment, foreclosure, and sweeping cuts in social services over the past five years have set off a wide-ranging struggle over class relations not seen since the 1970s. As politicians and activists from Occupy Wall Street to the Tea Party denounce “crony capitalism,” and as leading economists and journalists join in criticizing the harsher, finance-driven capitalist regime ushered in by Ronald Reagan and Margaret Thatcher, radical critiques of capitalism itself are gaining a new hearing.

The Marxist tradition, born in the early years of industrial capitalism in the nineteenth century, appears as vital as ever for comprehending the roots of the current crisis. Right-wing ascendance in recent decades has stripped capitalism of much of the cover provided by European social democracy and the U.S. welfare state, which had combined with anti-communism to marginalize Marxist thought after the Great Depression. The greatest crisis of capitalism since the Depression has laid bare the system’s underlying instability and brutality, renewing interest in Marxist alternatives to the limits of mainstream debate.

Conventional analyses rely on stark distinctions between supposedly normal times when markets efficiently match buyers and sellers and crises when markets break down, between Wall Street and Main Street, or between the public and private sectors. Resisting such dichotomies, recent books and articles by Marxist authors view with skepticism efforts to restore a stable balance between supply and demand, between speculative finance and productive investment, or between the regulatory state and big business. They contend, by contrast, that capitalist growth actually requires recurrent crises, that capitalist industry and commerce inevitably entail escalating financial speculation, and that capitalism is founded on the union of public authority and private profit, the basis of class rule. Yet Marxist writers find cause for hope, if not optimism, in the crisis-prone connec- tions between government, banking, and the market economy. The increasing political and economic centrality of finance, which limits the possibilities for piecemeal reform, offers a means of radically transforming capitalism by bringing the system of credit, savings, and investment under public, democratic control.

Capitalism and Crisis

Capitalism has long been characterized by the ups and downs of the and occasional deeper depressions. But its latest phase has been punctuated by an accelerating succession of booms, bubbles, and busts. From the perspective of conventional economics, crises are supposed to be temporary departures from the usual tendency of the market economy toward equilibrium, automatically adjusting prices so that the supply of commodities corresponds to the demand for them. Marxist observers, however, view the economic turbulence of our times as a manifestation of a propensity for crisis within capitalist development from the start.

Writing 150 years ago, Karl Marx identified the peculiar paradox of capitalist crises, which result from a breakdown not in the system’s capacity to produce enough wealth, but in its capacity to generate enough profit. They stem not from scarcity, but from surplus. The great depression of the late nineteenth century, at the end of Marx’s life, coincided with a wondrous advance in agricultural and manufacturing productivity. The problem Marx perceived was that the very labor-saving improvements making it possible to produce more coal, cotton, wheat, and steel than ever before—creating great riches for individual capitalists—were undermining the ultimate source of profits for the capitalist class as a whole in the exploitation of labor. As productivity rose, profit rates fell, increasingly leading capitalists to save their money or spend it unproductively instead of reinvesting it in further economic growth. Meanwhile, the yawning gap between rich and poor made it harder and harder for capitalists to sell the growing surplus that workers produced. The overaccumulation of capital and the overpro- duction of commodities led inexorably to crisis. But the devastating depression ironically saved the system from self-destruction. Like a fire in an overgrown forest, the crisis consumed much of the surplus that had kindled it, clearing the way for a new round of growth.

A new structure of corporate capitalism arose, based on giant railroad, mining, refining, and manufacturing trusts designed to control and coordinate costs, prices, and investments in major industries, preventing a recurrence of crisis. Yet by the late 1920’s, workers were producing more automobiles, home appliances, and other consumer goods than they could afford to buy. Capitalists were saving more than they could profitably invest in new production, and they were speculating on real estate or the stock market instead. Once again, the growing contradiction between material abundance and class inequality sowed the seeds of crisis. Much as it had earlier, the demolition of business and savings during the Great Depression and World War II created the conditions for a golden age of growth and prosperity in the decades to come.

The postwar boom was predicated on relatively generous private and public provisions like higher education, health insurance, decent wages, and single-family homes for large segments of the growing workforce. Leaders in business and government intended the rising structure of welfare capitalism to sustain consumer demand and alleviate, if not eliminate, the violent vicissitudes of the business cycle. By the late 1960s, however, the prodigious growth of productive capacity led by Germany and Japan, along with the escalating costs of workers’ wages and “social wages” such as public education in the United States and Europe, squeezed profits across the industrial world. Employers shuttered plants and laid off workers while governments desperately tried to make up for faltering private demand by ramping up public spending. The result was a perfect storm of spiraling inflation, swelling unemployment, and stalling growth.

In response, capitalists launched a regime- changing political and economic offensive. They crippled or crushed unions, slashed wages and benefits, and downsized and sped up production. They demanded drastic reductions in taxes on corporations and the rich, and in social services for everyone else in the advanced industrial countries. They militarily defeated socialistic movements in places like Chile and Nicaragua, and built integrated “supply chains” based on low-wage labor throughout the Global South. It worked. Profit rates began rising again in the early 1980’s, as workers in the capitalist heartland were compelled to labor harder and longer for less pay, joined by legions of new recruits to the working class in the hinterlands from northern Mexico to Eastern Europe to southern China. But the “neoliberal” order proved far shakier than its predecessor, beginning with a sharp recession, stock market crash, and savings and loan debacle in the 1980s. By the late 1990s, the early tremors of a systemic crisis were toppling the “emerging markets” of Asia and Russia. The global upheaval struck ten years later, emanating from the epicenters of New York and London.

While many liberal critics pine for the greater stability of the post-World War II era, recent Marxist writers highlight the inherent volatility of capitalism throughout its profit- driven, crisis-ridden history. But they also seek to explain what distinguishes the present structure of accumulation and its continuing crisis—above all, the supercharged power of finance.

Finance and “Fictitious Capital” 

Banks make a business out of debt, specializing in borrowing and lending money for profit. The rise of capitalism made that business central to agriculture, industry, and commerce, which came to depend on the currency and credit that banks controlled. That is why struggles over capitalism have so often focused on the “money power” of bankers and other professional financiers, who were the first to be called (by their critics) “capitalists.” Rarely has that power loomed larger than in the past twenty-five years.

Debt has become a big business in its own right, making finance arguably the leading “industry” of twenty-first-century capitalism. As the overall level of debt in the U.S. has grown much faster than the production of commodities since the 1970’s, bankers and bondholders have gained unprecedented economic power. ll but the richest households have struggled to make up for stagnant or declining real incomes by racking up credit cards, car loans, student loans, and home loans. Leveraged buyouts and hostile takeovers have likewise loaded major corporations with mounting debt burdens, while declining tax revenues have driven local, state, and national governments into the arms of the bond markets as well. By far the biggest borrowers, however, have been the banks and other financial institutions that are also the leading lenders, leaving behind their tame traditional roles as brokers and agents to engage in high-stakes trading on their own behalf. As the new master rather than servant of the business world, the financial sector has claimed the lion’s share of the profits made under its direction, trading places with manufacturing to become the most profitable segment of the U.S. economy.

The financial collapse of 2007-2008 therefore threatened to bring down the whole structure of capitalist accumulation built up over the previous quarter-century. As in past crises that spread from the banking sector, reformers across the political spectrum have sought to quarantine the contagion, redrawing the imagined boundary between “parasitical” financial chicanery and the “real economy” of production, exchange, and consumption on which it seems to prey. Denouncing the excesses of Wall Street in the name of Main Street, they aim to rescue honest industry from the gamblers and swindlers who apparently have hijacked it.

Such populist protests in the face of financial panics were familiar in Marx’s day as well. Marx contended, however, that financial speculation was intrinsic to capitalist industry, not parasitic upon it. What appeared on the surface as a conflict between dealers in material goods and services, on the one hand, and dealers in financial promises and claims, on the other, really reflected a contradiction at the core of an economy in which money formed the ends as well as the means of market relations. Finance allowed capitalists to borrow the money they needed to buy labor, raw material, and equipment with which to produce commodities to sell for more money. It redistributed the proceeds from those with more than they could profitably reinvest to those with less. By permitting a widening separation in time and space between the purchase of inputs and the sale of outputs, the credit system facilitated long-term investment and long-distance commerce. Yet in fostering the dual development of the material means of production and the capitalist market, the banking system accelerated the growing conflict between the two. Since it provided the conduit for capital accumulation in general, the financial sector formed the crucible of crisis—but not its ultimate cause, as recent Marxist authors have emphasized.

Marx wrote on the eve of a major transformation in the mode of finance, the rise of the modern stock market and the corporate consolidation it brought into being. By legally separating the ownership of capital from the management of industry, Wall Street created the publicly traded, multi-functional business corporation that came to dominate the advanced capitalist economies around the turn of the century. Along with the commodities exchange, which arose in the same era, the stock market enabled capitalists to invest in industrial and agricultural securities that could be traded like cash without taking on the liability and responsibility of operating factories and farms. It concentrated control over production in the hands of directors and managers, while it concentrated control over capital in the hands of brokers and bankers. Rather than represent- ing a separate interest unto itself, Wall Street constituted a unified capitalist class capable of ruling the market instead of being ruled by it.

At the same time, as Marx recognized, the division of management from ownership gave a new form to the fundamental contradiction within capitalist enterprise between the forces of industrial production and pecuniary profit. Financial markets make it possible for the claims of absentee owners to take on a life of their own, detached from the businesses on which they are based. Corporate shares do not represent legal titles to existing resources, machinery, or merchandise, which do not change hands when stocks are sold. Rather, they represent claims to future profits in the form of dividends, more like lottery tickets than property deeds. Unlike employers’ profits, their value derives only indirectly from the surplus value produced by past labor, to the extent that past performance influences stock prices. They are commonly traded with only a loose relation to corporate earnings, as simply wagers on rising or falling prices. As such, Marx called them “fictitious capital” whose “values can rise or fall quite independently of the movement in value of the actual capital” of roads, mines, and mills.3 Their innately speculative character makes such free-floating assets liable to feverish booms and busts, especially because they are managed by professional traders who regard the corporate enterprises to which they lay claim like race horses at a betting track.

Since the mid-1970s, Wall Street has remade much of the market economy in its own image. As the bond between banking and business has intensified, so has the tension between the imperatives of making money and producing wealth. Mergers and acquisitions, corporate raiders, and “shareholder activism”

have compelled even the biggest corporations to meet the high benchmarks of short-term profit set by financial gurus or be chopped into interchangeable bundles of assets and liabilities to be packaged, sold, and reassembled at the whim of the capital markets. Deregulation has permitted Wall Street to take over many areas formerly off-limits, such as commercial and consumer lending within the U.S. and investment in foreign currencies and industries. The volume and variety of financial securities have exponentially increased, boosted by high- speed computerized trading, as has the level of leverage (buying with borrowed money), magnifying the risk of systemic breakdown.

Beyond observing the vast expansion of Wall Street’s domain, recent Marxist writers underline two sets of qualitative changes in the business of finance. The first comprises the innovation of fantastic new forms of fictitious capital that further emancipate financial securi- ties from physical assets, fueling the height- ened turmoil of the markets. “Securitization” decouples debts from the original borrowers and lenders (and the collaterals for their loans), as when investment funds buy up mortgages issued by banks to homeowners and bundle them into bonds. Investors who purchase shares in such mortgage-backed securities and other “collateralized debt obligations” neither know nor care about the real property on which they trade. The wild growth of unregulated markets in exotic financial derivatives such as futures, options, and swaps means that bondholders are basically betting on the prices of companies and commodities in which they hold no real stake. The slender strings of absentee ownership have been further attenuated by the rising dominance of institutional investors like hedge funds and private equity groups mobilizing hundreds of billions of dollars amassed from shareholders who hardly know where their savings are going.

The fact that the nominal beneficiaries include many workers, whose pension funds began actively investing in corporate securities in the 1970’s, points to the second keynote of the new finance capitalism in Marxist accounts. Though the proliferation of fictitious assets does not directly derive from the past employ- ment of labor, it represents a powerful claim over workers’ present and future labor. While Wall Street has off-loaded capitalists’ responsibility for the consequences of their investments, it has multiplied their class power. In part, financial institutions have allied with employers in reviving profits by repressing wages. “Vulture capitalists” specialize in stripping employees’ health and pension benefits, often by forcing companies into bankruptcy or threatening to do so. “Shareholder activism” extracts greater value for investors by requiring more work by fewer workers for less money. Bondholders demand deep reductions in public employment and social provisions.

Debt also forms the fulcrum of what the economist Costas Lapavitsas calls increasing “financial expropriation,” operating in tandem with the industrial exploitation of labor. High finance has been hitched, as never before, to the deepening debt of poor and working-class people. It has alleviated at once the converse problems of surplus capital at the top and lack of buying power at the bottom of the social scale. It has bound workers to Wall Street through both their consumer debts, such as the flood of securitized “subprime” loans to low-income homeowners between 2001 and 2007, and their savings in pensions and health insurance. So, too, financial markets in the U.S., Germany, Japan, and China have found a ready outlet for surplus capital in the great growth of cross-border lending to their poorer neighbors. The cascading debt crisis in the developing world since the 1980s has brought draconian programs of “structural adjustment,” resulting in the wholesale dispossession of land, resources, and formerly state-owned enterprises by foreign investors. High finance has been hitched, as never before, to the deepening debt of poor and working- class people.

Fictitious capital and financial expropria- tion thus form twin pillars of the class structure, supporting the whole capitalist economy, both domestically and internationally. A lesson of Marxist work on the current crisis is that Main Street is deeply indebted to Wall Street. But the combination of power without responsibility that characterizes the neoliberal regime is epitomized in its renewed bond between finance and government.

Government and Banking

The largest-ever public bailout of the private sector has called into question, once again, the long-contested relationship of governmental authority to business enterprise. Liberals deplore the deregulation of financial markets and call for more stringent oversight, while conservatives blame the crisis on a corrupt alliance of state and market. But as Marxist authors contend, the union of sovereignty and capital—like the partnership of finance and industry—is, in fact, essential to capitalist class rule. Inaugurated by the royal marriage of government and banking in the English financial revolution three hundred years ago, the merger was integral to the later advent of corporate capitalism, with the semi-public, semi-private Federal Reserve System at its helm.

If capitalism, as the historian Michael Merrill has written, means “a market economy ruled by, or in the interests of, capitalists,” then the clearest sign of that dominion lies in the recent renewal of vows between Washington and Wall Street. Though Wall Street ideology exalts the “free market,” the financialization of recent decades has entailed an increasing, rather than diminishing, role for government. The more leveraged the financial system grows, the more frequent its bubbles and busts, and the more it relies on government as the guarantor of credit and property and the “lender of last resort.”

The crisis since 2007 has comprised three successive phases: a housing and mortgage crisis, a banking crisis, and a public debt crisis engulfing virtually every state and municipality in the U.S., along with a host of national gov- ernments in Europe. The third phase resulted from a massive transfer of debt from the private sector to the public sector, as state treasuries and central banks flooded failing institutions with cash and bought up their “toxic assets.” Governments borrowed heavily in the bond markets to pay for the bailouts. Bondholders then demanded that governments balance their books, largely on the backs of public employees and recipients of public services such as education, infrastructure, and welfare programs.

More than a valuable lesson in class rule, the bank bailout represents for Marxists a golden missed opportunity and a sign of how real change might yet be achieved. It demon- strates that the financial sector is not simply in need of greater governmental regulation, such as capital controls, public accounting, and a financial transactions tax. The banking system is, in fact, already governing the capitalist economy and deeply dependent on government support. Its partial socialization of ownership through the system of publicly traded stocks, and its centralization of managerial control over savings and investment as well as means of production, represent what Marx called “the abolition of capital as private property within the confines of the capitalist mode of production itself.” By heightening the contradiction between social wealth and private profit, modern finance hastens the dynamic of over-accumulation and crisis, offering repeated occasions for radical action to transform the system instead of simply saving it.

Marxist critics urge that governments should finally bring banking under the control of working people instead of plutocrats, ending the autocracy of finance. They find partial precedents in the much closer governmental control over the banks in postwar Japan and the United Kingdom, and in China and Germany more recently; in short-lived New Deal experiments such as the Reconstruction Finance Corporation and the Home Owners’ Loan Corporation; in the National Health Service in England and the Social Security System in the U.S.; and in publicly controlled “sovereign wealth funds” in Australia, Norway, Singapore, and South Korea, among other countries. Since the financial sector has already assumed quasi-sovereign control over industry, commerce, and property, a takeover of banking could offer the opportunity for a broader democratization of economic decision-making. “The credit system has a dual character immanent in it,” as Marx wrote. “On the one hand it develops the motive of capitalist production . . . into the purest and most colossal system of gambling and swindling . . . on the other hand, however, it constitutes the form of transition towards a new mode of production.”

 

Book Review – Making Your Own Luck Casino Women: Courage in Unexpected Places

By Susan Chandler and Jill B. Jones
ILR Pess, 2011

Reviewed by Lois Rita Helmbold

 

Ah, the glamour of Las Vegas. Unions are known for holding conventions there. Much of Middle America, as well as high flyers from around the globe, regard it as an ideal vacation. Retirees looking for sun, workers seeking opportunities, to say nothing of people who hope to strike it rich, all have poured into southern Nevada, making it the fastest-growing urban area in the U.S. for decades. Slot machines greet arrivals at airports and state line businesses. The mega resorts—which have come to dominate the business in recent decades the way that corporations replaced the mob—have spared nothing, except the workers, in their efforts to entice and entrap customers. Free drinks, “comped” rooms and meals, elaborate reward schemes, lavish displays and entertainment, and all-you-can-eat buffets attract people. Resort geography requires guests to move through casinos in order to access all other services: movie theaters, bowling alleys, shops, live entertainment, swimming pools, restaurants, hotel rooms, conference venues, even hotel desks. Parking garages open into casino floors. The aisles between slot machines are narrow, compelling visual as well as auditory awareness of the passers-by. Casinos notoriously lack windows and clocks, so that the twenty-four-hour business operates in a sealed vacuum, away from normal reminders of schedules and routines. More than Los Angeles, Las Vegas is la-la land. Its advertising has the power to suspend common sense. “Two million people? I thought Las Vegas was just a bunch of hotels in the desert,”one might ask. It is. But where do the people who work in those hotels live? Where do they buy their groceries? Where do their kids go to school? Las Vegas has been hyped in a way that removes everything except its presumed pleasures. “What hap- pens in Vegas stays in Vegas,” the Convention and Visitors Authority assures travelers.

Reno, “the biggest little city in the world,” also relies on gambling as a major source of income. In 1931, after mining towns became ghost towns, Nevada legalized gambling and it has been a mainstay of the economy ever since. Besides national and international visitors, California provides a steady stream of business. Busloads from the San Francisco Bay area cross the Sierra Mountains with daylong round trips, supplying Reno with seemingly unlimited numbers of gamblers. The San Diego and Los Angeles sprawls offer quick access to Las Vegas via freeways whose desert speeds are frequently 90 mph, an easy weekend trip. Among the hardest-working women who provide casino pleasures—visible and invisible—are the housekeepers, once primarily black women recruited from the rural South, today increasingly Latinas flee- ing repression and poverty. They are also leading union activists. “You have to do it for the people coming.” This explanation of their involvement by Geoconda Arguello Kline, president of the Las Vegas Culinary Workers Union, once a hotel maid, is the title of the first chapter of Casino Women. Susan Chandler and Jill B. Jones have written a respectful and admiring account of the mostly black and immigrant activists in Nevada’s so-called “gaming” industry, whom they contrast with women managers and unorganized card dealers. They situate their subjects in a larger context: a history that has changed from mob dominance to corporatization, globalization, and managers’ efforts to obtain complete control, whether on the gambling floor or in the state legislature.

Relying on interviews and focus groups with casino workers, managers, activists, union officials, and related professionals, Chandler and Jones present a striking, and bifurcated, portrait of casino women. Their initial focus, and clearly their respect, lies with working-class women from both the back and the front of the house, housekeepers and cocktail waitresses, but their scope is broad enough to include non-union activists, card dealers, managers, and others whose stories underlie Nevada’s major industry. Including workers in Las Vegas and Reno, most of whom they have carefully shielded with anonymity and whose life details they have fabricated, they paint a complex portrait of women in the gambling industry, a uniquely labor-intensive business. Las Vegas boasts more than 150,000 hotel rooms. The Culinary Union, Local 226, an affiliate of UNITE HERE, is a success story, the largest (sixty thousand) local in a right-to-work state in the U.S.

The women who struggled to build the Culinary Workers count not only their ability  to support their families adequately, but their increased sense of self, their recognition of their own leadership abilities and skills, and their improvement of their communities among the most valuable results of their activism. As illustrated in Stripped and Teased: Tales from Las Vegas Women (Bal-Maiden Films, 1998), Las Vegas has been the only city in the U.S. where a single mother without a college education could buy her family a home with a swimming pool, thanks to successful union organizing. The struggle continues. Station Casinos, the biggest local casino chain, found guilty by the National Labor Relations Board of breaking federal labor laws eighty-eight times, has appealed. On May Day 2012, activists at Station had just ended a week’s fast for the right to organize freely.

Having supported myself through a couple of degrees as a waitress and maid/housekeeper, and having taught at the University of Nevada-Las Vegas for nine years, to say nothing of being a scholar of working-class women and an activist, I brought high expectations to this book. I was not disappointed.

There is no doubt that the authors’ sympathy and solidarity rest with the working class and its activists. The authors, white women and social work professors, identify with and admire the black Southern migrant and Latin American immigrant women activists. Chandler and Jones characterize the sense of family developed by hourly workers as a sustaining force in their struggles, individual and collective. They contrast them with dealers, who are highly controlled and under constant surveillance at work. They are also unorganized, depressed, and apparently without group identity, solidarity, or cohesiveness. They judge that this sense of community is also missing in the lives of women managers, who have “crossed over to the other side.” Although the authors note that managers earning $150,000 annually are closer in income to cocktail waitresses than to the millions of dollars bestowed on CEO’s, managers identify with those above them, not those below.

Among the authors’ heroes is Darlene Jespersen, a highly praised Reno Harrah’s white bartender of two decades who declined to wear make-up when the company decided to “brand” employees as well as objects. Fired in this right-to-work state, Darlene filed suit, lost, then appealed to the liberal Ninth Circuit Court. Despite backing by Lambda Legal and numerous precedents in appearance cases, she lost again, illustrating corporations’ often successful efforts to achieve total control. Hattie Canty—a black self-described “Southern country girl,” mother of ten, housekeeper, organizer, and former union president—claims, “It’s much easier to organize women than it is to organize men . . . . We know what to do and that’s to take care of responsibility” (p. 58). Culinary organizing has been labor intensive, relying on one-on-one discussions, including visits to workers’ homes. In Las Vegas, casino women are mostly unionized; in Reno, they are not. Where workers lack union protection and wages, they typically work a second, often full-time, job.

Noise and tobacco smoke are major environmental hazards for casino workers, in addition to the musculoskeletal strains experienced by dealers standing through eight-hour shifts; by housekeepers lifting, pushing, moving, and shoving; and by servers balancing twenty-five pounds on a single wrist while maneuvering in high heels. Desk workers can easily ignore or forget the physical as well as the mental strains of working-class jobs. Accounts of bloody feet at the end of a shift, lungs blackened by secondary smoke, and pill-popping just in order to do the job punctuate these stories.

The book’s subtitle, Courage in Unexpected Places, reveals the authors’ own former assumptions. Working-class women are rarely seen as leaders, as heroes; rather, they are drudges, busy working full time at a job and at home, too busy and not smart enough for political or intellectual awareness. This study demolishes racist, sexist, classist stereotypes. It also confronts the reader with the realities of non-unionized workers in a right-to-work state: pangs of hunger, fears of eviction, surviving in a state that ranks in the bottom five on most indices of well-being, where private affluence trumps public sector poverty.

I wish the authors had discussed the immigrant rights movement (very strong in Las Vegas), the dramatic loss of jobs during the Great Recession (Nevada has the highest unemployment and foreclosure rates), and the politics of UNITE HERE. But that would be my book, not theirs. I sometimes despair that Las Vegas students’ and academics’ apparently inexhaustible interest in sex workers enables them to ignore the far more numerous, but less glamorous, women who keep casinos and hotels running. I am thrilled to read an account of the fruits of those women’s collective struggle. In an economy increasingly devoted to service, there are many lessons for all of us in this book.

Surviving In The Amazon

By August 2010, America had supposedly recovered from the Great Recession. But the unemployment rate in Pennsylvania’s Lehigh Valley was near- ing double digits, and anyone who suffered losses had no tangible evidence that an economic recovery had ever taken place. Only one job opening was available for every five seekers, so the career counselors who coached applicants were irrelevant as they attempted to convince us that we were free agents capable of landing our dream job if only we chose the most effective resume format and mastered the art of “personal branding” to stand out among the competition.

A major new employer had recently arrived in the Lehigh Valley and its timing could not have been more opportune. It was agreed that the state would not introduce legislation requiring this e-commerce pioneer to collect sales tax from Pennsylvania residents because we desperately needed the jobs it promised to bring.

Integrity Staffing Solutions (ISS) launched a sustained advertising blitz to recruit temporary laborers to staff Amazon’s new Breinigsville, Pennsylvania fulfillment center (a warehouse) throughout the upcoming holiday season and beyond. Billboards and postcards invited residents of downtrodden neighborhoods in the Lehigh Valley and surrounding areas to apply. The positions paid up to $12.75 an hour and offered full-time work with possible overtime. I completed an online application, printed out my resume on fancy almond linen paper, and visited the ISS office.

Although I’d resisted staffing agencies for as long as I could, I was respectful when I visited ISS because it offered compensation that topped what the other staffing agencies had advertised; and I liked Amazon.com. Amazon delivered nearly-impossible-to-find titles to my door, and I didn’t know it sold anything other than books at the time. I imagined myself surrounded by books when I first visited ISS and knew nothing about the actual job that I was to be assigned. I merely had to pass drug, background, and basic skills tests, and was stunned when they told me I’d start working the night shift as an order picker the following week for $12.75 an hour. They never looked at my resume. It was too easy.

I soon discovered that, despite its technological prowess, Amazon is a labor-intensive operation that sells just about everything imaginable. Receivers catalog inbound inventory; stowers place items on shelves; pickers receive rapid-fire orders through hand-held scanners and place items in plastic totes that are steered around on carts; the totes are placed on conveyer belts and sent to packers; the items are boxed, labeled, and conveyed to shippers. Amazon’s Lehigh Valley center is more than six hundred thousand square feet and multi-tiered. Merchandise is stored in “mods.” There are three floors on the east end of the warehouse, and three on the west; each floor is roughly the size of a football field and it takes roughly five minutes to walk from one mod to the other. Narrow aisles are numbered and shelving units are divided into scannable bins, with each bin holding random merchandise. I scanned thousands of barcodes a night. Everything had a barcode—even me. My labor was tracked through a barcode printed on a white (to denote temporary status) ID badge that hung from a lanyard I wore around my neck.

I walked approximately ten to fifteen miles a night while I worked, the warehouse was stifling hot, and there wasn’t any fresh air to breathe. It had to be pushing 110 degrees on the third floor and, in a fog of confusion, I’d be unable to tell if the numbers and letters were going up or down; or I’d read “twenty-eight” instead of “eighty-two” and walk to the wrong location. When I had to lower myself into a bottom bin and rise again, I’d stagger a little, drop the item in the tote on my cart, and look at my scanner. “Go to P3-G578-D251” it might say, and I’d scurry.

People came from all over. Laid-off teachers, recent high-school graduates, struggling students, and debt-laden college graduates; former managers, construction workers, electricians, and skilled laborers—veterans, immigrants, rural and urban poor (all disenfranchised)—were hungry for a job, any job, with many commuting an hour each way to earn a meager paycheck and a shot at full-time employment with Amazon. Mandatory overtime was casually referenced upon hire and we soon started working fifty-five to sixty hours a week. Management grew increasingly despotic and the worst among them barked and hollered and carried on in ways that I have never experienced in any other workplace. They’d sometimes enter the break room up to five minutes before break ended and start herding us back to the floor. I consistently exceeded the 125-unit-per-hour target rate and was made an “Ambassador.” I was a temp assigned to train the hundreds of temps that were descending upon us daily. Every warehouse job function can be learned in a few hours and we were disposable unskilled laborers, treated accordingly. Everything was non-negotiable.

Peak season officially started in November and, during this “blackout” period, any absence was inexcusable. Doctor’s notes were not accepted. Our schedules were changed to suit management’s needs and single mothers struggled with this most. If an employee accrued six demerit points, his or her assignment was terminated. We could also be written up if we did not adhere to bizarre safety standards. Pickers could be written up if they were caught steering their cart with one hand or holding their scanner while they were pushing the cart. Workers could not be hired after one minor write-up and were indiscriminately let go.

Managers happily referred to us as Santa’s elves at standup meetings. They realized the promise of full-time regular employment would get us to strain harder through the exhaustion, and the coveted blue badge (blue to denote Amazon status) was regularly dangled in our faces. Management effectively pitted worker against worker in a struggle to survive and there was pain on people’s faces as they pushed through fifty-five-hour weeks. Pickers could be seen rolling their eyes and giving another picker a knowing look as they passed each other in the aisles; some would raise their scanners to their temples and mime the pulling of a trigger.

I did not have time to speak to family or friends during peak season, much less celebrate the holidays. My sister phoned after a local news station reported that an Amazon employee set fire to a shelving unit while we were working. The building was evacuated and, if we wanted to keep our jobs, we were forced to stand outside in sub-freezing temperatures for more than two hours, most of us wearing only t-shirts and shorts. I told my sister not to worry and went back to sleep.

Christmas Day passed and we waited to be hired by Amazon. There was conflicting information about the hiring promises. Several temps were told by ISS representatives that around 80 percent of us would be hired, and managers regularly said it would be a “significant number.” January passed and nobody was hired. The Lehigh Valley was blanketed in a series of early-February snowstorms and I missed too many shifts and accumulated more than six demerit points. I returned to work the first day I could get back, walked into the ISS office on Amazon’s premises, and a representative told me my assignment was terminated. I quietly felt relieved. I suffered a chronic dry hacking cough the entire season, was exhausted, and craved sunshine.

On July 23, 2011, Spencer Soper of Lehigh Valley’s Morning Call newspaper published an article titled: “You’re hired…no wait you’re not.” Communication errors led applicants to mistakenly believe they were offered ISS jobs at Amazon; some quit other jobs and were later told they were not needed. I immediately composed an e-mail message to Soper imploring him to further investigate Amazon’s labor practices. He later contacted me by phone and I trusted him immediately because of the questions he asked. I decided to return to Amazon as an ISS temp to work the upcoming peak season, and requested anonymity in Soper’s article. I had been receiving messages from ISS telling me they’d gladly take me back—you’re allowed to return after three months of punitive leave, and they’re so smugly certain that you will. I have never met any of Soper’s other informants and wasn’t aware of the scope of his investigation. I certainly did not expect the story to go viral.

I returned in late August and the pick manag- ers were worse than before. Amazon rotates its managers regularly and my new managers did not know about my previous stint. I was called to the pick desk on two occasions because they noticed I had not scanned an item’s barcode in the minutes leading up to break, and I was accused of cutting off the floor early to get to break. I asked if he’d looked at my rate—I was averaging 150 units per hour and we were haggling over minutes. He answered, “Well, then we’re just losing more when you decide to leave a minute early.” He added, “If you don’t like our policies you’re free to leave.” I’d heard that one before and I just shook my head. “I’ve got a metal rod in my leg,” I pleaded. Security is tight and we had to pass through metal detectors to exit the floor, so I lost precious break minutes every time I set off the detectors and had to wait to have a guard run a wand up and down my body as I stood with my arms up and legs spread. My manager softened. “You’ve got metal in you, now we’re talking. I’ve got metal throughout my body.” Amazon actively recruits ex-military personnel to manage their warehouses and I wondered if he was an “Amazon Warrior.” The company is praised for this while it’s really just more of the same for the veteran—they’re overworked, undercompensated, and subjected to endless hostilities. I never envied my managers’ positions because they clearly suffered under tremendous corporate pressure.

Soper’s bombshell expose, “Inside Amazon’s Warehouse” ran on September 18, 2011. When I arrived to work that day I overheard workers spiritedly chatting about the story. A production assistant announced that our managers were in Seattle for “training” and some pickers let out cheers, hoots, and hollers. The military- management types were later sent upstairs to work behind the scenes, and less belligerent managers were brought in and they thanked us for our hard work. Corporate eventually lowered our target rates and a strange new silence fell over the place; workers were compliant and I hardly heard any complaints. Nobody dared mention a union, except me. I tried, and several workers later refused to sit next to me at lunch. The only union proposals I witnessed were scrawled on the unisex bathroom walls located in the remote corners of the mods.

Amazon lessened its reliance upon temp labor and I was included in a group of ISS temps who were offered full-time regular employment (a blue badge) with Amazon in October. I enjoyed modest privileges as a blue badge, and outsiders could now visit the fulfillment center at the beginning of a shift and think it wasn’t such a bad place to work. Ironically, I perceived work conditions to be even more unbearable when operations were running smoothly and we weren’t subjected to flagrant abuses. The skeptics among us never trusted Amazon’s gestures.

The Morning Call ran follow-up stories that detailed former Amazon customers’ pledges to boycott. “Almost 13,000 boycott Amazon.com,” the Morning Call reported, after more than 12,600 people signed an American Rights at Work pledge. The stories provoked fierce online labor debates and I followed the discussion boards closely. In the spirit of the season, Amazon introduced a “price-comparison app” and encouraged Amazon customers to serve as stealthy retail spies for a $5 discount. Bricks and mortar stores trembled, retail competition appeared more cutthroat than ever, and Amazon’s empire expands every day.

The media hailed Amazon CEO Jeff Bezos shortly after Steve Jobs’s death, propping him up as some sort of visionary, quasi-spiritual leader. Forbes gushed over my billionaire boss as tens of thousands of workers quietly suffered inside his soulless warehouses for subsistence-level wages. Bezos once said that Amazon workers don’t need a union because we own the company and several Amazon unionization attempts were summarily squashed. If I worked at Amazon for two years I’d be entitled to eight shares of stock. My Amazon “ownership” felt more like an insult. I’m exploiting myself, I thought. The shareholder in me said, “Drive down operating costs!” But as a worker, I knew it wasn’t fair—we earned more than we took home.

I waited for the ideal opportunity to quit Amazon for good. I wanted to release myself from the confidentiality agreement I signed upon being hired directly by Amazon, so I could speak about my experience. My apartment was broken into and my MacBook was stolen. This happened while revelations about Apple’s labor abuses at its Foxconn facility were surfacing, and I was actually glad to be rid of the thing. I went to work after the break-in, couldn’t concentrate, and wanted to go home. I told my manager the story, asked to be dismissed, and called off the next few nights to accrue enough demerit points to secure my termination. I knew I’d never go back there again, and now I purchase books online through socially-responsible sites with sustainable business models.

 

The Working Poor: A Booming Demographic

Former 2012 GOP presidential candidate Rick Santorum caught hell when he called President Obama a snob for wanting everyone to get a college education. But Santorum’s words strike a discordant note that shouldn’t be ignored. The president’s frequent exhortations that everyone should go to college in order to achieve some level of economic success ignore this fact about the U.S. labor market: that now and into the next decade, more than two-thirds of the jobs that U.S. workers will depend on to earn their livelihoods will be non-college-degree jobs. Intentionally or not, Obama’s words suggest that workers without a high level of educational credentials should expect less. Such a view feels out of touch at best, and elitist at worst.

For the large majority of workers, the key to avoiding—or escaping—the ranks of the working poor will necessarily rely less on whether they have any post-secondary education and more on whether jobs that require no college experience pay decent wages. To serious about reducing the number of the working poor we must eliminate poverty wages. Without doing so, a large share of future jobs will offer little more.

Defining the Working Poor 

The most widely recognized definition of poverty – the U.S. Census Bureau’s official poverty line – has been widely criticized as too low because it represents an exceedingly severe level of economic deprivation. Income eligibility guidelines for major anti-poverty policies demonstrate the inadequacy of the official federal poverty line (FPL). Public subsidy programs such as free and reduced-price school lunches, the State Children’s Health Insurance Program (SCHIP), the Low Income Home Energy Assistance Program (LIHEAP), and the Earned Income Tax Credit (EITC) provide benefits to households with incomes up to about twice the poverty line. According to these programs, families at twice the poverty line live with a high enough level of economic distress to warrant government aid.

The Economic Policy Institute has an alternative measure of a minimally decent living standard for families with young children, called the “Basic Family Budget.” These budgets include: food, clothing, housing, transportation, child care, health care, other necessities (including personal care items), and taxes. These budgets do not allow for any savings—not for retirement, education, or even for emergencies. This Basic Family Budget typically ranges between two and four times the official poverty line, depending on local living costs, and averages at about 2.4. In other words, for the typical family with children, an income level below 240 percent of the FPL would not be enough to meet their basic needs. Latinos made up 25.6 percent of poor workers, even though they only constitute 14.8 percent of all workers.

For these reasons, I define the poor as those living in households with annual incomes at 2.4 times the official poverty line or less. The working poor are those who have been active in the workforce at some point in the year—either by working or looking for work.

Who constitutes the working poor? There are no surprises here. People of color—African- Americans and Latinos, in particular—are over-represented. African-Americans made up 11.8 percent of the workforce in 2010, but 17.5 percent of the workers whose family incomes did not cover their basic needs. The figures for Latinos are more dramatic: Latinos made up 25.6 percent of poor workers, even though they only constitute 14.8 percent of all workers.

Educational credentials matter a lot too—not because available jobs require high levels of education, as I will demonstrate later, but because high-school-degree jobs pay less. The share of those with a high school degree or less is about nineteen percentage points greater among the working poor compared to the overall workforce (57.3 percent versus 37.8 percent).

The working poor are also somewhat younger than workers more generally, with an average age of thirty-seven compared to forty-one for the overall workforce. Women and men, on the other hand, appear among the working poor in the shares that roughly mirror the general working population.

Why Are Working People Poor? 

Paid employment can leave workers and their families in poverty for two basic reasons: insufficient employment opportunities and inadequate pay rates. Since the beginning of the Great Recession in 2009, policymakers have focused nearly exclusively on the issue of jobs. What gets lost in the panic over unem- ployment and underemployment—though justified—is that before the Great Recession, millions of fully-employed workers already filled the ranks of the working poor. Without aggressively addressing the issue of low-wage work, a large share of workers and their households will continue to live in poverty. To focus sharply on how low wages create a class of the working poor, the first column of Table 1 presents some basic figures for the year 2000 on the work status of poor indi- viduals. The year 2000 is the last full year of a ten-year-long expansion that produced the lowest unemployment rate—4.0 percent—of the last three decades. The figures for this year should tell us something about how full employment would reduce poverty.

 

In this near-full-employment economy in 2000, nearly one in three (31.5 percent), or 54.5 million, prime-working-age adults (eighteen to sixty-five years old) lived in poor households. Among these individuals, the large majority (68.1 percent) participated in the workforce— either by working or wanting to work at some point during the year. Among the other 31.9 percent of poor adults—individuals not in the workforce—nearly all (92.4 percent) either have other responsibilities that interfere with working (taking care of family or going to school) or they are unable to work (because they are ill, disabled, or retired). For these individuals, paid employment will not adequately address their income needs

Focusing now on individuals who are in the labor force and poor, even in a near-full-employment economy, 16.6 percent seek more work and have partial schedules for “economic” reasons (14.8 percent wanted to work more, and another 1.8 percent did not work at all because they could not find a job). Getting enough work clearly remains a problem for some people, even when there is a historically low unemployment rate.

But the majority of the working poor (54 percent) do not escape poverty despite working full-time, year-round. For these workers, too- low wages create the gap between their earnings and their household needs. The average hourly wage among the working poor is $10.00 (see Figure 1). Full-time, year-round earnings at this rate—$20,800—fall 52 percent short of the $43,500 that the average worker with a small family (two adults and one child) needs to maintain a minimally decent living standard. Even two adults working full-time, year-round, at $10.00 an hour would leave a $2,000 gap.

Fast forward ten years to 2010, which had a 9.6 percent unemployment rate. We can clearly see the role of massive job losses and reduced hours in pushing U.S. workers and their families into poverty (column 2, Table 1). Now, 37.7 percent of prime-working-age adults are poor. Fully 36.5 percent are now either unemployed or underemployed.

Still, even in 2010, just over two in five poor workers had full-time jobs year-round. They couldn’t make ends meet because of their low pay rate. Over the decade, the average wage among the working poor hovered just over $10.00 (after adjusting for inflation), reaching $10.70 near the peak of the last business cycle in 2006. By 2010, the average wage among the working poor was $10.32, only slightly higher than where it started at the beginning of the decade.

So why are working people poor? Employment levels certainly matter. The share of prime-working-age adults who can’t make ends meet shot up from 31 percent in 2000 to 38 percent in 2010. But wages matter too. As the earlier figures show, whether the economy is barely recovering from a severe recession (2010) or operating at a high level of activity (2000), a large share of poor workers—roughly between 40 and 50 percent—are fully employed but struggle because they earn poverty wages. In other words, to reduce the ranks of the working poor we must focus on the quality of jobs, not just on the unemployment rate.

The Promise of future Jobs 

The wage premium from a college degree is worth a 44 percent raise for male workers with only a high school degree and a 48 percent raise for female workers.8 If more of tomorrow’s jobs are college-degree jobs—or at least jobs that require some college experience—the future holds the promise of better-paying job opportunities for workers to strive for. This is not the future that the Labor Department projects. Ten years from now, the Labor Department expects that more than two- thirds (68.5 percent) of U.S. jobs will require only a high school degree. (This figure is vir- tually unchanged from today’s 69.3 percent.)

We can dig a little deeper and compare the top thirty occupations that the Labor Department estimates will have the largest growth between now and 2020 to the top thirty occupations most commonly held by the work- ing poor in 2010 (see Tables 2 and 3). These occupations broadly overlap: seventeen out of the thirty occupations are the same. Moreover, if current rates are any indicator of what is to come, we can expect these projected jobs to offer low wages: the median hourly pay rate among those jobs is $12.30—23 percent below the median of $16.00 across all workers.

Another commonality among the thirty occupations with the largest growth is that many are “non-offshorable” and “non-routine.” Non-offshorable jobs (e.g., security guards and janitors) involve significant levels of in- person interactions and on-site work and, as a result, are less vulnerable to the global scope of today’s labor market. Non-routine jobs are hard to automate, making it more difficult to replace workers with computers or other types of machines (e.g., child care workers and personal care aides).

This is why, as MIT economist David Autor explains, we should expect that these jobs—many of which pay low wages—will continue to be an important area of future employment opportunities. Autor shows how, in contrast to previous decades (1979-1989 and 1989-1999), jobs that paid the lowest wages are in more recent years (1999-2007) experiencing the largest employment growth. The Labor Department projections extend this trend for the next ten years.

More workers with college degrees are unlikely to change this pattern. Instead, as more workers become educated, the educational cre- dentials among low-wage workers will simply rise. From 1979 to 2011, the percentage of adult workers getting some college experience rose by more than twenty percentage points, from 41 percent to 64 percent. Over the same period, the percentage of workers earning the low-wage of $10.00 or less hardly changed at all, rising slightly from 23 percent to 24 percent. The result? The percentage of low-wage workers that now have some college experience has grown considerably, from 25.2 percent to 43.2 percent.

The Need to Raise Labor Standards

What can be done about poverty wages? New thinking about a century-old U.S. labor market institution—minimum wage laws— holds great promise.

Minimum wage laws typically come under fire in policy debates because of the concern that strengthening this labor standard will impose high costs on employers and, in response, employers will cut back on staff. Recent research persuasively demonstrates that minimum wage laws in the United States have not caused any significant employment losses.13 Our attention should turn to the ques- tion of how much higher minimum wage rates could be lifted, while still avoiding job losses. Currently, a large gap exists between the federal minimum wage of $7.25 and what workers typically need to earn to support a minimally decent standard of living. For example—for a two-adult, one-child household—two adults working full-time, year-round, would need to earn at least $10.50 per hour; and if there is only one adult working, $21.00 per hour.

Empirical estimates on how much labor costs rise when minimum wages go up repeat- edly demonstrate that, relative to businesses’ sales revenue, the costs are small. Consequently, employers can adjust to minimum wage increases in other, less disruptive ways than by reducing their workforce. After all, laying off workers has its own costs. Employers invest time and energy in finding and identifying reliable and appropriately skilled staff.

Take, for example, the cost increase experienced by one of the most low-wage, labor-intensive industries: restaurants. The cost of wage raises by a typical minimum wage increase—say 20 percent—represents between 1 and 2 percent of the average restaurant’s sales revenue. If such a restaurant raised its prices—a common way for businesses to adjust to minimum wage hikes—by between 1 and 2 percent, this would entirely cover the cost of a minimum wage hike. This would mean that a $40.00 restaurant bill would rise, at most, by $0.80. Note, too, that restaurants within a local area would be similarly covered by minimum wage laws. No single establishment should be put at a competitive disadvantage by raising its prices, since the competition is primarily with other nearby restaurants.

The other ways employers commonly adjust to such small cost increases include the following. First, offering workers higher wages tends to lower turnover rates, so businesses can partially offset cost increases with these cost savings. Also, businesses can use revenue gains that they normally experience as the economy expands—since people spend more as their incomes grow—to cover cost increases.

In a 2010 report, my co-author Dr. Jeffrey Thompson and I take account of these three adjustment channels to identify the largest minimum wage hike that businesses could absorb without resorting to layoffs or cutting back on their workers’ hours. We find that, with a national economy growing at a 3.0 per- cent annual rate, businesses have the capacity to adjust to a minimum wage hike as large as 70 percent without reducing their employment levels. This would raise the federal minimum wage rate to $12.30. Coincidentally, this is the same as the average pay rate among the thirty occupations with the largest projected growth. A minimum wage standard set at this level would clearly have a major impact on the quality of future jobs, and get the lowest pay rates within the range of what could lift workers and their households out of poverty.

This rate is not, historically speaking, that high. The 1968 peak value of the minimum wage, adjusted for inflation, would set the federal minimum at about $10.00 today. But inflation is not the only thing that has risen since 1968. Worker productivity has also risen, but by a lot more—230 percent. In other words, workers are producing more than twice per hour what they did in 1968. Policymakers have failed to leverage the increased economic abundance generated by the U.S. economy over these past four decades to improve minimum wage laws.

Stronger Labor, Stronger Labor Standards

The prevalence of low-wage jobs contributes significantly to generating a class of the working poor. Despite working full-time and year-round in 2010, 40 percent of prime-working-age workers could not support a minimally decent standard of living for their house- holds. This figure would have been even higher if the unemployment rate had not persisted at above 8 percent since the Great Recession.

To eliminate working conditions that lead to poverty, we need to pursue a more ambitious set of labor standards. Research indicates that the well-established labor market institution—the minimum wage—is not being used to its full potential. The evidence on how businesses adjust to minimum wage rates sug- gests that the federal minimum wage rate could be raised by as much as 70 percent—from $7.25 to $12.30—while avoiding any significant fall- off in employment. This would maximize the benefits from minimum wage laws to support a minimally decent standard of living for U.S. workers.

Today’s anemic minimum wage is a symptom of a bigger problem: an embattled labor movement. Since the 1960’s, the value of the minimum wage has been falling alongside the union density rate. Think about this: at the height of the U.S. labor movement the federal minimum wage ticked upwards, in step with increases in worker productivity, ensuring that a share of the nation’s growing income went to the lowest paid workers.16 Remember, worker productivity has more than doubled since the late 1960s. If the real value of the minimum wage had continued to increase alongside worker productivity, starting from its peak of $10.00 in 1968, it would now be about $23.00. This is how far the minimum wage has veered off course from its path of promoting a “fair day’s pay for a fair day’s work.”

Instead, today’s minimum wage rates are so low that living wage campaigns have necessarily recast the struggle over the minimum wage standard in terms of a living wage—a wage floor that will at least prevent workers from becoming destitute. This political strategy has been effective. By igniting public outrage against paying workers less, the living wage movement has led to the passage of more than 130 living wage ordinances across the country.

Recasting the minimum wage as a living wage, however, has a downside. A “living” wage entwines the wage standard with what workers must be paid to survive instead of what workers deserve. This can distract the debate around labor standards with questions about what workers actually need. Living wage and minimum wage opponents, for example, argue that most low-wage workers are teenagers that don’t need to earn much of anything at all.

But working people are not working for charity and their pay should not be tied down to what they need just to get by. Rather, employers should pay their workers a fair rate that keeps pace with the increasing number of goods and services that they generate. This crucial distinction has been lost in the absence of a powerful union movement. The fight against poverty wages requires a strong labor movement that can recast, again, the debate over wage standards in terms of what’s fair, not what passes as minimally decent.

 

THE WORKING CLASS IN EXILE Chavs: The Demonization of the Working Class

Chavs: The Demonization of the Working Class By Owen Jones 
Verso, 2011
Reviewed by James Rhodes

In his 2011 book, Owen Jones—a former trade-union lobbyist and political researcher, now a journalist—offers an angry and impassioned take on the rise of the “chav” phenomenon. “Chav” entered the popular lexicon of the U.K. in 2004, the latest in a long line of stigmatizing terms referring to the white working class. Sometimes defined as an acronym for “Council Housed and Violent,” the term usually refers to the “non-aspirational,” “non-respectable” sections of the white work- ing class, characterized by unemployment, welfare dependency, social housing tenancy, violence, drug and alcohol abuse, promiscuity, and overarching moral degeneracy. However, for many, “chav” and “working-class” have become synonymous. Jones states that while racism and homophobia are increasingly taboo subjects, the “class hatred” directed toward chavs “has become an integral, respectable part of modern British culture. It is present in newspapers, TV comedy shows, films, internet forums, social networking sites, and everyday conversations” (p. 6).

Although Jones’s arguments and examples are specific to the U.K. context, the central themes of the book will strike chords with many U.S. readers, at a time when writers such as David Brooks (2010) and Charles Murray (2012) are increasingly concerned with the apparent slippage of the white working class from “respectability” into what Brooks termed “underclass-style dysfunction.” Indeed, chav has its own U.S. equivalents, particularly in terms such as “white trash” and “hillbilly.” Jones’s work certainly seems to have garnered interest in the U.S.; the New York Times listed it as one of its top ten non-fiction books in 2011.

A key strength of Jones’s account is his attention to context. He situates the construction of the chav within the sweeping political, social, cultural, and economic changes that have transformed Britain since the 1970s. He credits deindustrialization, the rise of neoliberal economic governance, welfare and housing reforms, the decline of the trade union movement, and the impact of these changes with transforming traditional white working-class communities. He offers a portrait of white working-class communities plagued by economic and social problems, lacking adequate forms of representation in the workplace and politics, and marginalized by mainstream cultural representations that patronize, distort, and degrade. These themes will be familiar to American readers, particularly across the Rust Belt, where the loss of economic restructuring, and suburbanization has transformed blue-collar communities.

Rather than presenting these transformations as “natural” or “inevitable,” as many accounts of working-class decline do, Jones ties them to decades of neoliberalism and industrial transformation. Indeed, while the account of the Thatcherite assault on the working class will be familiar to most readers, Jones shows that the political unwillingness and failure of the Blairite New Labour project to address the inequalities faced by working-class communities may be even more damning. The net result has not been about “improving the lot of the working class; it is about escaping the working class” (p.88, emphasis in original). For Jones, the denigration of the working class reflects broader societal attitudes toward work in the de-industrial context and the devaluation of low-paid, low-skilled, insecure labor: “By putting the emphasis on escaping these jobs rather than improving their conditions, we end up disqualifying those who remain in them. We frown upon the supermarket checkout staff, the cleaners, the factory workers—slackers who failed to climb the ladder offered by social mobility” (p. 98).

Jones outlines how the figure of the chav has become a politically and socially convenient caricature of the working classes as economic polarization and inequality increase rapidly, compounded by government austerity. Politicians and pundits use the idea of the chav to dismiss inequality as due to bad choices, outmoded lifestyles, poor attitudes, and a lack of application. Jones argues that this recasts Britain as a meritocratic, individualized state in which aspiration—or rather the lack of aspiration—is seen as the only barrier to social mobility. Jones notes that stigmatizing the white working classes ironically represents the U.K. as a classless society. As the “respectable” working class is redefined as part of an expanding middle class, the working class is further marginalized as the identity of the feckless and the failed. Jones’s account offers an interesting contrast to Charles Murray’s view—in Coming Apart: The State of White America, 1960-2010—that the supposed disintegration of the white working class has exposed America’s claims to be a classless meritocracy. Where Jones sees the chav as a reflection of political and economic changes, Murray frames class largely in cultural terms, blaming growing social divisions on differences in values.

While Jones offers a highly emotional, politicized account of the contemporary position of the white working class in the U.K., the book is not without flaws. For example, while the term chav is generally directed exclusively at whites, Jones tells us that the book is about “the” working class, which he seems to assume is inherently white. Indeed, the voices of ethnic minority members of the working class are absent, suggesting that the working class and “ethnic minorities” are mutually exclusive categories. This leads Jones into a form of class nostalgia—familiar to many American readers—where the story of the working class is narrated through the figure of the white, male, industrial worker. This reflects a broader tendency to deny the diversity of the working classes; Jones ignores differences of gender, race, ethnicity, religion, nation, and place. While he acknowledges that Thatcher-era policies that encouraged more affluent working-class families to buy homes (and thus view themselves as middle class) reflected an attempt at a “divide and rule” approach to “class war,” he fails to explore the significance of this. For instance, he ignores the way working-class people engage in the negative stigma of chavs. This has important implications for how we think about contem- porary class relations, particularly as this term divides the working class into the “respect- able” and “deserving” as opposed to the “immoral,” “irresponsible,” and “undeserving.”

Jones may also overstate the expansion of the middle class and the dissolution of working-class identities. While he argues that the definition of the middle class has expanded as working-class identities have lost salience, he cites opinion polls showing that approximately half of the U.K. population continue to define themselves as working class. By constructing a dichotomous relation- ship between homogeneous middle- and working-class categories, Jones diminishes the complexity of class fragmentation and relations. This is particularly important in light of the Occupy movement, which in some respects marks a reorientation of class politics and the potential for an alliance of middle- and working-class communities against the super-rich.

Finally, despite claiming to speak on behalf of the working class, Jones largely ignores the agency of working-class people and communities. We hear almost no working-class voices in this book, other than a few isolated individuals, politicians, and trade unionists from working-class backgrounds. We rarely hear from those who have been objectified most forcefully through the chav caricature. Indeed, while Jones’s account of the decline of neighborhoods, living standards, and political engagement captures important facets of working-class life, his lack of attention to the various forms of resistance presents the working class as docile, apathetic, and easily duped. The final chapter, “Backlash,” is the only part of the book devoted to working-class responses to their stigmatization and marginalization. Here, Jones focuses on the shift of some (in reality a minority) white working-class voters to far-right parties such as the British National Party (BNP) and the English Defence League (EDL). This represents one of the few acknowledgements of white working-class agency in the book, and it ploughs a familiar furrow in which the white working class is seduced by the far-right out of frustration and racism (a pattern often seen in discussions of why the white working class in the U.S. votes for conservative Republicans). Jones mistakes the support from a minority of the white working class for the far-right as representative of this class as a whole, something for which he earlier critiques media coverage of chavs. Worse, he acts as an apologist for those of all classes who have turned to the racist politics of the far-right. By presenting racism solely as a naive, misguided response to underlying economic and politi- cal concerns, he fails to see racism itself as a serious barrier to overcoming social divisions and achieving social justice for all groups.

Despite these problems, Jones offers a well-argued, well-evidenced account that brings to light the increasing negativity that surrounds the white working classes, manifest in the figure of the chav. The book offers a pertinent critique of simplistic and damaging representations of the white working class by politicians and the media. For readers on both sides of the Atlantic, Jones poses important questions about how economic, political, and social changes are reconfiguring the material and symbolic position of the white working class in contemporary society.

References

David Brooks, “The Lean Years,” New York Times, February 16, 2010.

Charles Murray, Coming Apart: The State of White America, 1960-2010 (New York: Crown Publishing, 2012).