March's Lowdown

March 2004, Volume 6, Number 3

Edited by Jim Hightower and Phillip Frazer


Please, Scott, don't y'all do anything more for us, you hear?

It's not just jobs we're losing—it's America's middle class

Carly Fiorina is a Bushite kind of woman--Donnie Rumsfeld with nail polish. Like George faves Condi Rice, Dick Cheney and Karen Hughes, Carly believes in belligerence and Darwinian ethics--let the strongest survive. Everyone else...adios, suckers.

Fiorina is honcha of the high-tech conglomerate Hewlett-Packard, and she is among the current spate of CEO enthusiasts for offshoring any and all U.S. jobs, especially the well-paying middle-class jobs that her corporation was once proud to provide. Hey, say the corporate chieftains and their apologists, the notion that corporations supposedly have social responsibilities is so last century. "There is no job that is America's God-given right anymore," Fiorina bellowed last year, just before she announced more offshoring.

And, in George W, Carly and her CEO cohorts have found their willing servant. Polls are now ranking Bush's handling of the economy lower than the public's approval of pedophile priests, so last month, the White House finally took some bold and decisive action: They convened a conference. Dubbed an "Economic Roundtable," participants who huddled with the president included the broad spectrum of Americans from the CEO of General Motors to the CEO of Goldman Sachs. No representatives of working people, no small farmers or Main Street businesses, no credit-card debtors, retirees, or single moms, no unemployed high-school grads or out-of-luck Ph.D.s--no Joe or Jolene Hardrow had a seat at Bush's table.

Well, said White House mouthpiece Scott McClellan, this was a gathering of "economic leaders," an "opportunity for the president to highlight his six-point plan for strengthening the economy even more."

Even more?

* Even more than the 2.2 million jobs lost so far under Bush--the worst job performance since Herbert Hoover?

* Even more than the slowest wage growth in 40 years, with weekly pay stubs for middle and low-income workers now falling behind inflation--which is to say the American majority is losing ground?

* Even more than today's crushing level of consumer debt, with families now shelling out 13 percent of their household income just to make interest payments to bankers--a record percentage (and we're paying a level of interest far higher than the rate that prompted Jesus to throw the moneychangers out of the temples)?

* Even more than the 1.6 million families (90 percent of them middle class) forced to file for bankruptcy this year--more than will suffer a heart attack, more than will graduate from college--not to mention the millions more just one layoff from bankruptcy?

* Even more than the 1.4 million people added to the poverty rolls, two million more to the list of Americans without health coverage, and millions more who've had their pension payments slashed or eliminated?

Please, Scott, don't y'all do anything more for us, you hear?

Our gal Carly was at the Economic Round Table with George, Michael Dell, and all the other off- shoring swells, and after the con- fab, she stepped before the cam- eras and gave witness that all of the corporate leaders who attended were "quite enthusiastic" about George's economic program.

Why wouldn't they be? Let's count some specific reasons for their giddiness, focusing just on the single category of government assistance that the Bushites provide specifically to facilitate corporate wanderlust: (1) direct subsidies to finance the moving of corporate operations to low-wage nations and to insure them against risk; (2) a whole new 2004 package of corporate tax breaks for moving offshore, including one for constructing factories in foreign nations; (3) privatization of 425,000 government jobs, specifically allowing the corporate contractors to move these tax- paid jobs out of our country; (4) non-stop negotiation of more NAFTAesque trade scams that grease the skids for CEOs wanting to produce their goods abroad; (5) taxpayer-financed trade junkets so corporate executives can set up deals to relocate their factories, call centers, professional services, and other work outside the U.S.; and (6) sponsorship of offshoring workshops, held in such luxurious locations as New York City's Waldorf Astoria hotel, to teach companies how to move their operations to China.

What's going on here is not merely the wholesale movement of our best jobs, but the deconstruction of America's middle class. With the full support of Bush (and, sad to say, of too many congressional Democrats), Carly and other top dogs have made a conscious choice to cut the leash, to sever the good fortune of America's corporate- investor elites from any responsibility, affinity, or identity with the well-being of the mass of people with whom they supposedly share a country.

They are free, of course, to choose to separate their corporate and personal selves from us--but We the People, have choices, too. We can and should decide to separate the larger public interest from their self-interest. Let's take back the special tax breaks, enormous subsidies, regulatory advantages, political privileges, and all the other public favors that have been bestowed upon them. They got these favors on the grounds that all of us would benefit from the advantages they were given. This trickle-down rationale was never true, but now they're abandoning any pretense that they owe anything back. As Colgate-Palmolive puts it: "The United States does not have automatic call on our resources. There is no mindset that puts this country first."

Since they are unilaterally asserting that they have no obligation to us...we have no obligation to them. They're the ones wanting to take the pluribus out of "e pluribus unum," so let's send the unums off on their own, without the financial backing of us pluribus.

A work in progress

Middle-class life in our country is not a given.

The 40-hour week, minimum-wage, collective bargaining, affordable housing and cheap home loans, free education, some retirement security, Medicare, job-safety protections, and the rest of what sustains middle-class life were not provided by the founders in 1776, and they certainly were not given to us by generous corporate chieftains. Rather, the middle-class framework was built by us...We the People.

In the first century of our republic, there was very little in the way of a middle class. But in the intervening decades, ordinary working stiffs agitated, organized, and literally battled the bosses, politicians, and media until, piece by piece, over the generations, we put into law the provisions that have given us a modicum of control over our own livelihoods and economic destinies.

But now, piece by piece, the bosses and politicians are rapidly dismantling our middle-class framework. So far, their thievery includes: looting our public treasury through tax giveaways to the rich; cutting regulatory protections for everything from workplace safety to health care; high-tech industry's manipulation of immigration loopholes to displace middle-class American employees; privatizing more and more of the government; secretly negotiating trade deals that empower global corporations to subjugate workers throughout the world; maneuvering to gut pension laws ...and so much more.

Last year, Bush's anti-Labor Department removed one piece of the legal infrastructure that supports a middle-class life: It let corporations arbitrarily designate millions of wage-earners such as nurses, firefighters and computer programmers as "managerial" employees, thus exempting them from overtime pay.

The whole of this theft adds up to far worse than the sum of its parts, for it is America's egalitarian ethic of the common good that they are abandoning.

High-tech execs to workers: Go to hell

Remember how we were told that globalization would be such a boon for American workers? Blue-collar would move up to high-tech, and everyone would sing "Zip-A-Dee- Doo-Dah" all the day long! Guess what? Dell, Microsoft, IBM, Google, Oracle, Intel, CSC and the other giants of high-tech are swiftly moving these very jobs out of our country to China, India, Pakistan, Russia, and elsewhere, making a killing by paying a fourth as much to a foreign employee as they pay here, then pocketing the difference.

Some corporations realize the resistance they're facing. One internal IBM memo says that anything written to employees must first be "sanitized" by the corporate communications department, and tells top managers never to use the terms 'on-shore' and 'off-shore.' IBM even suggests that managers faced with telling employees that their jobs are going bye-bye soften the blow by saying: "This action is a statement about the rate and pace of change in this demanding industry...It is in no way a comment on the excellent work you have done over the years." To add insult to injury, many American high-tech workers are forced to train their foreign replacements! If they refuse, they lose any severance pay.

Even some Republican leaders, such as Rep. Don Manzullo, are gagging on this: "The assumption was that while lower-skilled jobs would be done elsewhere, it would allow Americans to focus on higher-skilled, higher-paying opportunities. But what do you tell the Ph.D., or professional engineer, or architect, or accountant, or computer scientist to do next?" If you're a high-tech CEO, you tell 'em to go to hell.

Converting Safeway to Greedway

Corporate greed is not some amorphous concept, but a human characteristic that comes with faces and names--such as Steven Burd.

He's CEO of Safeway, the supermarket giant. Burd recently led a five-month charge in California to bust the wage scale and eliminate the health-care benefits of his industry's employees.

Supermarket work won't make you a millionaire, but thanks to the United Food and Commercial Workers Union, employees who are unionized can earn a slice of America's middle-class life. In California, baggers and clerks start at about $7.50 an hour and rise to $18. It's this rise into the middle class that Burd and his corporate buddies set out to shut down. Even though this industry's profits were up 91 percent since 1998, including $10 billion in profits in 2002, executives squeezed workers' earnings. For example, $18 an hour yields an income of about $36,000 a year for full-time work. But grocery executives are holding workers to between 24 and 32 hours a week, cutting their annual earnings to around $25,00--or less.

Even that was too much for Burd, however. As Safeway's contract with UFCW workers in Southern California was coming up for renewal in 2003, he demanded that their pay be frozen for two years, that their health-care benefits be slashed by up to 50 percent and that new employees be hired at a drastically lowered pay scale.

This was Wal-Martization, and UFCW members balked. Safeway refused to negotiate, however, forcing its longtime workers to go out on strike last October.

Anyone who thinks that labor unions strike just for the hell of it has never been on one. It's financially and emotionally draining. But there was no choice here. As one of the workers put it: "If we lose this fight, there goes 70,000 jobs that will no longer be middle-class jobs." He was talking about the jobs of 20,000 Safeway employees in Southern California, plus 50,000 more supermarket workers in the region who were locked out by Kroger and Albertson's only one day after the Safeway strike began. Can you say, "anticompetitive collusion"? The hardships endured by these workers were staggering. For nearly half a year, they struggled without any unemployment compensation, no health coverage, and union strike benefits down to $125 a week. Many lost their apartments and cars because they couldn't make the rent or keep up with the payments.

The supermarkets were eating big losses, too, because many California consumers shopped at other grocers. But the top executives continued to draw their fat salaries (Burd is paid $7 million a year) and enjoy Rolls Royce health coverage, so they refused any serious negotiation, even when the union offered a major concession that would have saved the corporations a third of a billion dollars on their employees' health plans. But the CEOs wanted it all--Burd said that lowering the living standards of his own employees was an "investment in the future." One reason the top dogs thought they could effectively starve out the workers was that Safeway, Kroger, and Albertson's had entered into a mutual-aid pact weeks before the strike began, agreeing not to compete, to share costs and revenues, and to act in unison against their workers. The state attorney general filed an antitrust suit against the three, but corporate lawyers tied the suit up in the courts... while workers suffered.

This was not merely a dispute about 70,000 California workers, but a national class war about whether corporations everywhere can simply reduce all of us to low-wage, no-benefit work. If Safeway succeeded here, the entire retailing industry would push for the same Wal-Mart model, knocking America's majority down further.

But Burd and his corporate confederates miscalculated. They thought that the union members would cave in after two or three months. In fact, the workers lasted twice that long, surviving the longest grocery strike in U.S. history. It cost the chains $1.5 billion in revenues, which they swallowed because they make so much money and because their CEOs share a brutish, red-faced determination to crush the industry's pay scale, in hopes of jacking up the corporations' stock prices, and walking away with more for themselves.

On February 29, UFCW members voted overwhelmingly to accept a new company offer and go back to work.The union took a big hit, swallowing a provision that allows the chains to hire new employees at reduced pay and with reduced benefits. Yet the chains didn't win their key goal which was to slash the workers' health-care benefits. The intended knock-out blow to middle-class grocery jobs was fended off by the fortitude of these workers who were willing to make a stand?and a sacrifice.

This is a war that has only begun. The Steven Burds of every industry will keep attacking, keep trying to take back more from the workers. But a growing majority of working folks are becoming aware that it's all of us who're targeted, and that it's ultimately about whether or not America will be a middle-class country. That's a war that's worth our best effort.

A corporation that breaks the greed mold

Do big time CEOs--no matter how compassionate and cuddly they might be personally--have to be SOBs on the job? Yes, says the conventional wisdom of greater CorporateWorld. It's not personal, just business, the inevitable workings of the market, they say.

"Look Ye to Wal-Mart," boom the Market Gods, directing CEOs to follow the anti- labor, low-wage, no-benefit, move-it-all-to-China ethic of this retail giant.

Apparently, Jim Sinegal has been going to the wrong church. He's CEO of Costco, the warehouse club retailer that's fast spreading across the country. He takes a shockingly heretical view of his job: "We pay much better than Wal- Mart," Sinegal says. "That's not altruism. It's good business." Indeed, Costco's pay is much, much better--a full-time Costco clerk or warehouse worker earns more than $41,000 a year, plus getting terrific health-care coverage. Wal-Mart workers get barely a third of that pay, plus a lousy health-care plan. Costco even has unions! Yet Costco's total labor costs are only about half of Wal-Mart's. How's that possible? One big reason is that Costco workers feel valued and their morale is high, which adds enormously to the company's productivity. Also, they don't tend to leave--employee turnover is a tiny fraction of Wal-Mart's always-revolving door, where staff turnover tops 50 percent a year! It's enormously expensive to be on a constant cycle of recruiting, training, and losing employees. Even a 10 percent reduction in employee turnover is said to produce a 20 percent savings on labor costs.

And Cosco is also shy of offshoring. Pointing to his company's U.S. call center, Sinegal says: "We could move it to Bangladesh or somewhere. But what kind of message would that send to our employees?" While Wal-Mart makes twice as much profit as Costco, Costco is doing way better than most corporations, with stock value up 354 percent in the past 10 years. Sure, Sinegal could wring more profit out of the company, but he believes that the better business model is to enjoy a nice profit, not a killing, while investing more in Costco's 92,000 workers. "I don't see what's wrong with an employee earning enough to be able to buy a house or having a health plan for the family," he says.



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