by Pat Denehan
It is a well-known fact that the majority of the American people have not been the beneficiaries of the economic gains made in the past several decades. To cite a common statistic demonstrating this point, the Congressional Budget Office has reported that between 1979 and 2007 the top one percent of households doubled their share of pretax income while that of the bottom 80 percent fell. This figure alone should be shocking enough, but 2007 was the year the Great Recession began.
While top-earners saw their incomes drop by one percent in the immediate wake of the crisis, their rebound was swift. Since 2009, corporate profits and salaries within the insurance and financial industries have risen to new heights while workers’ wages have stagnated or dropped. The nation’s largest financial titans consolidated in the wake of the crisis and are now larger, more powerful, and more systemically dangerous than they were previously. In 1995, the “Big Six” financial institutions had assets worth only 17 percent of U.S. GDP. After the height of the crisis in 2010, these banks’ combined assets amounted to 63 percent of GDP. Despite these corporate gains, unemployment has until recently remained stubbornly above eight percent, and the decimated housing market has wiped out a large portion of the net-worth of millions of American families.
All of these facts are widely acknowledged results of the Great Recession and bear repeating here only for the sake of emphasis. What has been less discussed in the aftermath of this debacle is why Americans’ attitudes towards these modern day plutocrats and robber barons remain so ambivalent. The last periods of similarly intense income inequality in America – the Gilded Age from 1860 to the late 1890s and the Progressive Era from 1900 to the 1920s – saw the rise of the Progressive Movement, Muckrakers, mass unionization, trust-busting, and wide-ranging reform of industries from finance to healthcare. All of these arose due to overwhelming economic inequality which condemned the majority of Americans to often dangerous, low-paying, and insecure employment without even the cushion of government assistance – all this while a handful of businessmen amassed enormous fortunes.
Today there are no equivalent movements. During the 1950s, over one-third of American workers belonged to a union. However, unions are now a dying force in American political and economic life and the much-lauded grassroots Occupy movement has garnered little popular support. Even the most liberal members of the Democratic Party chose not to nationalize or dissolve the Wall Street financial conglomerates that caused the most recent crisis; nor did they prevent these firms’ additional growth or prosecute any of their officers for their crimes. The failure of the traditional left to candidly and openly discuss this situation has played a significant role in this paralysis.
The obvious remedy is to follow the example of generations past and organize a progressive alternative to today’s stagnant focus on bipartisanship and consensus. Instead of seeking rapprochement with those who seek to further these destructive trends, the goal of reformers should be to frame the debate in stark relief. We must change the trajectory of our national conversation. We must agitate for a more progressive tax code that ensures ultra-wealthy families do not find ways to pay a lower percentage of their income in taxes than lower or middle-class workers. We must fight to break up the massive financial interests that have injected an unbelievable level of risk into our economy with their size and those who have amassed fortunes by means of cheap tricks, regulatory capture, and insider information. We must demand that workers have the right to organize themselves to advance their own interests as they see fit without intimidation. We must work to prevent the erosion of existing social services and privileges that were bought with the blood of previous labor and progressive movements.
All of these goals must be advanced to ensure that the United States does not commit social and economic suicide, and none of them can be achieved without organized pressure. The choices we must make as a country are not abstract; they are being made every day. Today the wealthy take credit for and advantage of good times and place the blame and suffering of bad times on the masses. We have to either accept this situation or take action to correct it. Everyone must choose whether or not they are willing to work toward a country where prosperity is shared along with setbacks. This is the choice at the heart of many battles taking place all over the country.
An example of one such battle is the strike this past summer by machinists working at a Caterpillar hydraulic parts plant in Joliet, IL. Caterpillar, the world’s leading producer of earth-moving machinery, made a record profit of $4.9 billion last year, and the compensation of its chief executive, Douglas R. Oberhelman, increased by 60 percent in 2011 to $16.9 million. In spite of this, the company insisted upon a six-year wage-freeze for two-thirds of its workers, stating that their pay was above market levels. In May 2011, 780 workers went on strike in protest. They held on until August when they ratified an agreement granting all of Caterpillar’s demands including the wage freeze, a pension freeze for the more senior two-thirds of the workers and a steep increase in what the workers pay toward their health care insurance. Without the support of a nationwide movement and the moral and economic pressure such a movement provides, these workers never had a chance.
One could also cite the recent burgeoning strikes by long-suffering Wal-Mart workers that have spread to eleven cities including Dallas, Seattle, Miami, Washington D.C., Sacramento, and San Francisco. Wal-Mart is notoriously anti-union and all attempts to organize its workers have failed. This is significant as Wal-Mart employs 1.4 million workers in the United States alone. The jobs Wal-Mart offers are low-paying, have few benefits, offer little stability, and are often all that remains in communities after its stores have shuttered most other retail businesses. Its owners, the Walton family, are among the richest families on earth. In 2011, six of the Waltons had a combined net-worth exceeding that of the bottom 30 percent of American families combined. These striking workers are waging a crucial battle in American economic life and will face defeat without the backing of popular opinion expressed in an organized movement. Whether or not we support them in their struggle will determine whether we will live in a country of shared prosperity or one in which the majority toils for the enrichment of an increasingly shrinking minority.
A meeting that President Franklin Roosevelt had with labor leaders and other reformers shortly after his election in 1932 encapsulates the necessity of collective action. When presented with a list of policy recommendations, Roosevelt is said to have replied, “I agree with you, I want to do it, now make me do it.” Similarly, to paraphrase Frederick Douglass, power does not concede without a demand, and no demand can be made within a system that lacks viable alternatives. Only through the creation of an organized and outspoken movement can this become a reality. It is the duty of all those who believe in creating a more equitable society to come together and present these alternatives to the American people and to demand their adoption in the halls of power.