Workers of the World UnitePosted: May 2, 2013 Filed under: income inequality, worker rights | Tags: 401(k), diminishing real wage, Felix Salmon, Henry Blodgett, Income Inequality, Thomas Friedman whore 8 Comments
We continue to see abuse of labor from the horrible explosions in a West, Texas chemical plant to the collapse of a building in Bangladesh. US workers continue to get the shaft when it comes to working harder and more productively for less. It is a sad trend that just keeps reaching new records. The gap between incomes going to workers and profits going to owners–mostly passive stockholders–continues unabated. This gap does not reflect a lack of labor productivity. It appears to reflect mostly the ability of capital owners to gamble themselves into strong positions. Industrialists are force to drive down costs to attract capital and to do some very short sighted things. The rush to increase ROE with no thought to other factors is a very bad omen for this country.
Henry Blodgett provides some very depressing May Day graphs at Business Insider.
Corporate profit margins just hit another all-time high. Companies are making more per dollar of sales than they ever have before. If you’re a shareholder, that seems like good news (in the very short term, anyway). Alas, most people aren’t shareholders. And for folks whose investment horizon is longer than “this quarter” and “this year,” it’s actually bad news. Companies are under-investing in their employees and the future.
It’s May Day, and Henry Blodget is celebrating — if that’s the right word — with three charts, of which the most germane is the one above. It shows total US wages as a proportion of total US GDP — a number which continues to hit all-time lows. Blodget also puts up the converse chart — corporate profits as a percentage of GDP. That line, you won’t be surprised to hear, is hitting new all-time highs. He’s clear about how destructive these trends are:
Low employee wages are one reason the economy is so weak: Those “wages” are represent spending power for consumers. And consumer spending is “revenue” for other companies. So the short-term corporate profit obsession is actually starving the rest of the economy of revenue growth.
In other words, we’re in a vicious cycle, where low incomes create low demand which in turn means that there’s no appetite to hire workers, who in turn become discouraged and drop out of the labor force. Blodget’s third chart is one we’re all familiar with: the employment-to-population ratio, which fell off a cliff during the Great Recession and which will probably never recover. The current “recovery” is not actually a recovery for the bottom 99%, for real people who need to live on paychecks. And today is exactly the right day to point that out.
And yet that’s Tom Friedman’s column this May Day:
If you are self-motivated, wow, this world is tailored for you. The boundaries are all gone. But if you’re not self-motivated, this world will be a challenge because the walls, ceilings and floors that protected people are also disappearing. That is what I mean when I say “it is a 401(k) world.”
This manages to be both incomprehensible and incredibly offensive at the same time. I have no idea what Friedman thinks he’s talking about when he blathers on about disappearing protective floors; I can only hope that he isn’t making a super-tasteless reference to the recent disaster in Bangladesh. But it’s simply wrong that today’s world is “tailored” for anybody who happens to be “self-motivated”. Both the self and the motivation are components of labor, not capital, and as such they’re on the losing side of the global economy, not the winning side.
Friedman is a billionaire (by marriage) who — like all billionaires these days — is convinced that he achieved his current prominent position by merit alone, rather than through luck and through the diligent application of cultural and financial capital. His paean to self-motivation recalls nothing so much as Margaret Thatcher’s “there is no such thing as society” quote: “parenting, teaching or leadership that ‘inspires’ individuals to act on their own will be the most valued of all,” he writes, bizarrely choosing to wrap his scare quotes around the word “inspires” rather than around the word “leadership”, where they belong.
True leadership, in a society where the workers are failing to be paid even half the fruits of their labor, would involve attempting to turn the red line in Blodget’s chart around, and to spread the nation’s prosperity among all its citizens. Rather than telling everybody that they’re “on their own” and that if they’re not a success then hey, they’re probably just not “self-motivated” enough.
The ultimate Friedman kick in the balls, however, doesn’t come from his lazily meritocratic priors. Rather, it comes from his overarching metaphor: the idea that if you have a 401(k) plan, then you’re somehow in charge of your own destiny. Friedman might be right that we’re living in a 401(k) world, but if he is then he’s right for the wrong reason. In Friedman’s mind, a 401(k) plan is an icon of self-determination: you get out what you put in. “Your specific contribution,” he writes, italics and all, “will define your specific benefits.”
We are learning more and more each day on how the finance industry games the kinds of investments available to you in those plans. We also know that mega corporations are getting congress to defund OSHA and any regulatory agency that watches over worker safety. Many investments are also subject to whacked performance because of excessive speculation that is encouraged by our tax laws. This has destroyed home values during the Great Recession and eaten up many folks retirement plans and savings. Frankly, it’s difficult to see how any one that relies on their sweat and has no rich family connections these days even crawls into the middle class. All of these things add up to major insecurities and risks. This is simply not the way things are supposed to work. But, it is the world that the Koch Brothers and others have carefully crafted by making politicians and pundits whores to their agenda of greed.
Pity the poor working man and woman.
That graph makes me sick…and makes me think of that scene in Monty Python Holy Grail…starting at 45 seconds
Dak, did you see this? http://digbysblog.blogspot.com/2013/05/put-worker-on-board.html
Raw Story: Police discover unexploded bomb in Austin, Texas business district
Speaking of Texas explosions, the fuse appears to have burned out before the bomb could detonate.
Raw Story: Florida cop fired for eighth time after leaving police AR-15 with friend
The fact this cretin is still a cop is an indictment of our whole justice system. This worker should be united against.
The entire criminal justice system is out of control in this country.
Wow! Yesterday MoDo and Brooks, today Friedman. I admire your intestinal fortitude.
Ya, me too.
Obama’s nomnation for Trade Rep, Michael Froman, led to a segment this afternoon on All Things Considered that he will be working closely with this nominee to enact the Trans-Pacific Partnership treaty by year’s end.
This is so not good news.
Something more to worry about — so far any leaks about the treaty show it to be a collection rapacious Corporatists’ wet dreams. Banksters get say there cannot be public banks (so where would credit unions fit into that scheme?), Corporations and other Big Bidnesses could override any nation’s or state’s regulations and laws if they interfere with their ability to make a proper profit. I think internet freedom would be a gonner.
Obama seems to be doubling down on the Corporatist type cabinet members.
Brava, dak, another post that lays out the economic reality and shows the tenuous situation of all of us who aren’t bonus class.
Friedman is a self-motivated, self-righteous greedhead scammer. 401(k)s only work for the rich.