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Corporate power increases as workers battle one another

Last week's anti-labor election results only scratch the surface of a trend that destroys social cohesion and makes it harder for businesses — small and large — to prosper.

June 13, 2012|Michael Hiltzik
  • Campaign worker Nate Neuenschwander, left, watches election returns at a campaign party for No on Measure B in San Jose. City voters approved the measure to curb public employee retirement benefits.
Campaign worker Nate Neuenschwander, left, watches election returns… (Paul Sakuma, Associated…)

Of the social developments of recent decades, certainly one of the most perplexing is the revolt of the working class against workers.

Last week's election results only scratch the surface of a trend that destroys social cohesion and makes it harder for businesses — small and large — to prosper. Voters in San Jose and San Diego opted to cut public employee pension programs; on the national stage, Wisconsin's openly anti-labor governor, Scott Walker, handily turned away a recall campaign inspired by his effort to kill collective bargaining rights for public workers.

None of the votes appears to be purely anti-labor. The California polls were expressions of municipal fiscal anxiety, aimed at one of the few lines of a local budget (payroll) that may yet be under voters' control. Walker apparently prevailed in part because Wisconsinites (unlike Californians) don't cotton to recalling governors just like that, and also because wealthy industrialists backing Walker outspent unions and Democratic contributors backing his opponent by about 7 to 1.

But the results are a good starting point for a survey of the working- and middle-class landscape in America. It's important to examine the balance of power between corporations and workers now, and not merely because big money from either side is going to be oozing from candidates' pores in this electoral season. But labor's diminishing power has much to do with the weakness of the economic recovery and the bloodlessness of consumer demand. Put simply, when more and more of the bounty of economic growth flows to those who don't need to spend it, and so little to those who immediately would crank it into the retail economy, demand will continue to stagnate. That means meager job growth.

Worse, as workers battle one another for smaller slices of the same shrinking pie, they see others in the same fix not as neighbors but rivals. Today's vision of the working-class economy as a zero-sum game underlies public opposition to all sorts of stimulative programs — assistance for strapped homeowners, to cite one example.

Requiring lenders to rewrite underwater mortgages by forgiving excess principal rather than forcing them into foreclosure would be beneficial for homeowners, their neighbors, their lenders and their local merchants alike. But voters terrified about slippage in their own standard of living greet with resentment the prospect of someone else getting a hand. There's no point in condemning this reaction as selfish or shortsighted. It's human nature, and it has never been exploited by the powers that be as effectively as it is today.

Surely it's no secret that the steady increase in wealth and income inequality in the U.S. has coincided with the evaporation of worker power and the decline of unionization, which fell below 7% among private-sector workers last year. In 1955, the ratio was 33%. That surely contributes to the anti-labor tone of so much legislative activity across the country and in Washington, where the House of Representatives has mounted a full-scale assault on the National Labor Relations Board.

The problem confronting the U.S. is where to find a counterweight to "pro-business" government policies that tend to steer the distribution of wealth and income toward the highest strata of society instead of distributing the fruits of economic growth broadly — and fairly.

Among the obstacles to the creation of effective economic policy is the myth that corporations and unions are two sides of the same coin. Unions back Democrats, corporations back Republicans, but other than that they're functionally equivalent, exact counterweights to each other's political influence. This was supposedly the saving grace of the Supreme Court's infamous 2010 Citizens United decision, which took the handcuffs off corporate spending on political campaigns, and off union spending too.

One would think the absurdity of this equivalence to be self-evident, but here are a few signposts. Corporations collect their revenues from customers; unions get theirs from their members. But corporations don't necessarily represent the interests of their customers (or haven't you had to deal with your cellphone company lately?); while unions consistently represent the interests of their membership.

You won't generally find a union supporting a political candidate whose platform calls for suppressing the right to collective bargaining; but it's standard operating procedure for, say, cable companies to support candidates who favor giving them more freedom to stick their customers with bigger bills.

One common trope is that both corporations and unions are governed by democracy. Shareholders get a vote, dues-paying union members get a vote, what's the diff?

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