Tax system benefits only the rich

C.F. BAUMGARTNER
SPI GUEST COLUMNIST

The squeeze on the middle class is real. It began with the bailout of Social Security (FICA). In 1983, Social Security appeared to be in trouble. Congress acted to make certain it remained solvent.

Many Americans believe that FICA is a contribution, which goes into their retirement account. That is not so. FICA taxes finance monthly payments to retired Americans. It is not a savings account.

Financial planners advise us that paying taxes sooner than later is unwise. Paying a tax sooner rather than later makes our present and future less prosperous.

From 1984 to 2002, the government collected $1.7 trillion more in FICA taxes from wages of Americans making under $87,000 (income exceeding $87,000 is exempt from FICA) than it paid to beneficiaries. How much is $1.7 trillion? Enough to have paid off all the U.S. consumer debt at the end of 2001. Today three of four families pay more in FICA taxes than income taxes.

Corporations pay dividends from after-tax profits, and shareholders must report dividends as profits, which means dividends are twice taxed. President Bush has declared the double taxation of dividends fundamentally unfair.

He didn’t mention FICA, but it is also double taxation. FICA taxes apply to wages that have already been subject to income tax. If double taxation of dividends is fundamentally unfair, he can make a stronger case against FICA taxes because they affect more Americans.

Ronald Reagan was elected president in 1980 because he promised to reduce taxes. The highest tax rate in 1980 was 70 percent, and 40 percent was common for some in the middle class.

Congress passed the biggest tax cut in history using the rationale of supply-side economics. Fewer taxes would lead to more investment and, thus, to economic growth. It failed. By 1982, the deficit was $343 billion, three times what it was when Reagan took office, and unemployment had reached 10 percent. Reagan’s solution? Raise the price of a gallon of gasoline 5 cents.

By 1983, Social Security was in trouble. Congress increased Social Security taxes more than was needed in order to have a surplus ready for the retiring baby boomers 30 years in the future.

The late Sen. Daniel Patrick Moynihan saw the Social Security scare as bogus and called the proposed increase in taxes thievery, which masked the drop in revenues caused by the Reagan tax cuts for the rich. The “bailout,” however, took place. FICA taxes now take $5,400 from every worker earning up to $87,000, and his employer pitches in the same amount. In 1970, the figure was $327.

The cumulative effect of FICA taxes and income taxes makes the system regressive, not progressive. Workers earning up to $87,000 pay 15.3 percent, while the $500,000 executive pays 5.6 percent.

Here is the truly egregious rip-off. Congress created a trust fund for the increased taxes. It would earn interest and be ready for the boomers. Instead, surplus FICA taxes went to pay for the day-to-day operations of the government. There is no trust and no fund.

Since 1983, the government has spent $5.4 trillion more that it took in from income taxes, estate taxes and excise taxes. However, government debt grew by only $3.6 billion because Congress allowed surplus FICA taxes collected from the wages of Americans earning less than $87,000 to finance a rip-off of the middle classes by the wealthy, and it’s all perfectly legal.

(emphasis added by me)

Commentary: Freshening, Focus, Rising Bile, and the ‘Ownership Society’

I suppose I should be used to it by now: balancing the budget on our backs, scheming to take every possible advantage of us, the attitude from owners that they’re such paragons of virtue we ought to be willing to work for them for nothing and consider it a privilege, the invisibility, the lack of respect, and the daily fight to get through another week. I should be but I’m not. Some of you have noticed a rising tide of phlegm on FTT, and you’re not wrong. I admit it: I’m not less angry in my old(er) age, I’m more angry.

When I was younger, I thought conditions would improve. When I was younger, the unions were stronger; you could live on minimum wage jobs, not well, but you could live; there were rules and at least a few of them favored us; and one of the national political parties acted like it cared what we thought, thought about what we needed, and needed some, anyway, of what we had to offer. That was when I was youger. When I was younger, I had hope.

For 25 years I have watched our lives go from bad to worse to awful, experienced the shrinking of our presence in society from near-invisible to practically-invisible to ‘What? Are you still here? I thought you were dead.’ I have seen the gains we made with sweat and blood–literally–washed away in a sea of anti-labor rhetoric. Saddest of all, I have seen way too many of us buy into that rhetoric and sign on to a movement that we refuse to understand, despite all the signs and signals, is dedicated to our destruction.

We have been sold a bill of goods, a pig in a poke, a sow’s ear pretending to be a silk purse. They took advantage of our lack of education (which lets them think we’re stupid), our limited resources (which they call ‘laziness’), and our willingness to believe the best of people (which makes us, in their eyes, ‘unrealistic’ and ‘naive’), and used them to convince us that unions weren’t lifting us up, they were tearing us down; that management was really on our side and wanted to see us succeed; that our poverty was our own fault, not the result of what they were paying us, and that the way out of it was to work harder, longer, and cheaper.

I was talking union at the shop one day a couple of years ago–which I used to do a lot, to the point where many ran when they saw me coming–and one of the guys said to me that he would never join a union because he’d be ‘stuck with it’ forever. To him, joining a union was an admission that he would never be, could never be anything other than what he was–a laborer. A union wasn’t a step up, it was a trap from which there was no escape. His idea of salvation from his low-income status was in owning his own business. ‘Ownership’ was the Holy Grail.

‘Gonna get your GED soon, are you?’ I asked–he quit high school in his junior year because he didn’t think there was a ‘point’ to it.

No, he said, he wasn’t planning on that. He didn’t need to. All he needed was a good idea. He’d get a few grand from his dad as start-up money, and as long as he worked hard and aimed at the top, he’d get there. He didn’t want to be ‘a slob’ (his word) all his life. He was going to be a millionaire before he was 40.

There’s nothing wrong with dreaming. What was wrong was that he wasn’t even rich yet and he already saw protecting workers as something separate from that dream and a barrier to it. He was a worker himself, yet he saw other workers as his natural enemies; a union was a bunch of them banding together to take away from him what he didn’t even have yet, scheming what and how much they would steal as soon as he managed to acquire…something.

That’s what makes Bush’s sales pitch so powerful–and so dangerous. First they convinced us that we all want to be owners; then they convinced us that we all could be owners if we’d just stop wasting our time demanding frivolous luxuries like fair wages, affordable housing, and protection from the powerful. We, too, could be rich if we stood on our own two feet and stopped expexcting the government to do ‘everything’ for us. And now they’re trying to convince us that society itself is based on ‘ownership’; that if we don’t ‘own’ something, we’re not really Americans and we don’t really count. So they, philanthropists that they are, are going to arrange it so we can ‘own’ things.

The invidiousness of this concept is almost beyond words. It takes Social Darwinism to new heights and predicates an entire society based on the premise that no man is his brother’s keeper because it’s the brother’s problem and if he can’t solve it, it’s because he’s lazy or stupid, and you’re not responsible for those things are you? Then why should society be held responsible?

Apparently, Christ was lazy, stupid, naive and unrealistic, not to mention that he was probably a Commie, too.

This is only the beginning (I have to stop here or I’ll go on for days). I’ve been thinking about the ‘Ownership Society’ for a few days and getting madder and madder at the intolerance, arrogance, and sheer brutality of it. Which leads me (yes, I know, ‘Finally!‘ you’re saying to yourself) to the point of why I started this post: The Changes.

I changed the name. Slightly. It never felt finished to me. I didn’t know why until the last few days. I should have. The very first post I wrote (the opening of that post is on the sidebar now) said very clearly where I was going; I just didn’t recognize it. I thought the white heat in which I wrote it would pass. And it did–or at least it seemed to. Actually, I buried it–like I always do, like a lot of us do, like we’ve been taught to do–so I could get on. But it never actually went away, and every article I found on the latest insult, the latest raw theft, the latest blatant manipulation, fed it like wood feeds a fire. The implementation of the new overtime rules and their consequent re-imagining of what constitutes ‘management’ only a day or so after Junior’s latest ‘Ownership Society’ bilge got respectable write-ups everywhere sent me into a tailspin. I was so pissed I could spit nails, as my mother used to say (she didn’t say ‘pissed’; she said ‘mad’).

Then, the other day, I was doing some research on something totally unrelated to it when I stumbled on Lynd Ward’s dark, angry engraving Moloch–the demon heart of Mammon. I remembered it from years ago but hadn’t thought about it, in, I bet, a full quarter-century, so seeing it again was like seeing it with fresh eyes, grown-up eyes, eyes that knew exactly what it meant, not as a vision or a stylization or a warning but as a reality I was living in and had been for some time. Something clicked–my anger was starting to make sense to me; I was beginning to understand it.

But something was missing–the words. There were words that went with it, I knew that, but I couldn’t remember them. Ginsberg or Ferlinghetti or Kenneth Patchen, I thought–one of the Beats, anyway. Howl?

Ginsberg, yes, but not Howl–a special, one-time only collaboration between a rising young poet and the established artist whose work had been his inspiration. Ward did the engraving and Ginsberg wrote the poem; neither pulled their punches. They called it The Moloch Broadside because it was published–picture at the top, poem underneath–on a single long sheet of paper and tacked to walls and telephone poles. It was intended as a call to arms like the Revolutionary broadsides it was copied from.

I hadn’t read it in at least 35 years. The first time I read it I thought it was juvenile, over the top, almost childish. I wasn’t even 20 yet. This time it was like getting kicked in the stomach–all the air was sucked out of me by Ginsberg’s bold, bald shot to the heart. Talk about ripping away the veil! Ginsberg and Ward hadn’t just opened the curtain the wizard was hiding behind, they had torn off the wizard’s mask and shown us what it hid: The God of the Walking Death, the gaping, stench-ridden yaw of The PuppetMaster. Moloch–the worship of Things and the destruction of Life.

That’s what I was feeling. That was the source of the rage I could hardly keep a lid on. Bush and his corporate cronies are actually Molochite devotees, servants to the belief that Greed is the highest emotion, and the acquisition of ‘things’ is the only measure of achievement. Moloch recognizes no human values, praises no human qualities, shows pity for no one and remorse for nothing. He is a single, simple force–he Takes. He is that in all of us that urges the virtues of unchecked selfishness whenever our generosity would have a price that would be hard to pay. He’s the one who looks in the Sharper Image catalog, scopes out the mansions on the other side of town, dreams of expensive linens and designer clothes and cars that cost more than the house you live in. He’s the one that whispers to you in the night that you deserve those things, you have a right to them, and that if you don’t have them you’re a failure.

I knew we were in a war. Now I’ve identified the enemy. The enemy isn’t Bush or Cheney or Ashcroft or Chao or Norquist or DeLay. The enemy is the shadowy figure behind and above all of them, the cold stone of a dead idol in which we’ve invested massive power because messy, chaotic, undisciplined Life scares us but doesn’t move the stone.

All of which is an astoundingly long-winded way of saying that this site is going to stop assuming the war is metaphorical and start treating it like it’s a real shooting war–which it is. Thus ‘Dispatch From the Trenches’–messages from and for The Front where the battles are being fought and the troops are doing the dying. And thus the words of Allen Ginsberg to remind us who the real enemy is.

I can’t say I know yet how this is going to work out in practice. What I can say is that I intend to try to cut to what’s behind the stories; we can never match his superiority of weapons, but maybe we can even the playing field a bit by cutting off his supply lines. In any case, I probably ought to warn you that there’s going to be a lot more anger floating around here–and plenty of targets to aim it at.

I think hope (remember ‘hope’?) is a function of the belief that things can change for the better, but also the result of active resistance to and rejection of anything and anyone who tries to take that hope away by closing off options and rigidly defining what’s an ‘acceptable’ response. Anger is a key part of that half of Hope. You need focused anger to resist and resist and resist again.

Welcome to the Resistance.

Judge Allows Class-Action Suit for Unpaid Overtime

By Maura Dolan and Lisa Girion, LA Times Staff Writers

SAN FRANCISCO — In a closely watched labor law case, the California Supreme Court cleared the way Thursday for a class-action lawsuit brought by Sav-on Drug Stores workers who say they were misclassified as managers and improperly denied overtime.

The unanimous ruling overturned a lower-court decision that would have discouraged such suits.

Plaintiffs’ attorneys maintain that many workers — despite being given titles such as “store manager” or “team leader” — spend most of their day on non-managerial tasks such as stocking shelves or tending a cash register, rather than overseeing any aspect of the business.

Companies had hoped that the lower court’s position would slow a wave of overtime litigation that has swept the state in recent years, costing firms hundreds of millions of dollars in judgments and settlements. A broad swath of corporate California has been hit, including Farmers Insurance Group, Bank of America Corp., RadioShack Corp., Rite Aid Corp., Starbucks Corp., Taco Bell Corp. and United Parcel Service Inc.

As a result of the high-court ruling, experts said, California businesses can expect a renewed surge of class-action litigation seeking overtime pay.

“There are probably a fair number of these lawsuits waiting in the wings for the court to clarify what the standards are,” said Steven Katz, a Los Angeles lawyer who wrote a friend-of-the-court brief for other businesses in the Sav-on case. “Now that that has happened, I think we’re going to see those suits being filed.”

A spokeswoman for Sav-on, which has about 300 stores in California, declined to comment on the ruling. Rex S. Heinke, a Los Angeles attorney who represented the drugstore chain, said he couldn’t comment because the litigation was ongoing.

The California Supreme Court ruling came the same week that new federal overtime regulations took effect. Those rules, which are expected to reduce the amount of overtime paid to workers and reduce litigation, were opposed by organized labor and embraced by the business community.

The federal regulations, however, are expected to have little effect in California, which has its own labor laws.

Under the state statutes, workers who spend more than 50% of their time performing the duties of hourly workers, even if they’re called managers, are eligible for overtime pay. Eligible workers who put in more than eight hours a day on the job are supposed to be paid for the overtime at time-and-a-half — 1.5 times their usual hourly rate.

Under federal law followed in most other states, managers may be exempt from overtime pay if their primary duties are supervisory.

The state high court’s decision stemmed from a lawsuit brought by two Sav-on managers who contended that the chain misclassified its assistant managers and operating managers as exempt from the state’s overtime wage laws.

Lawyers in the case have estimated that 600 to 1,400 Sav-on workers may be entitled to back pay if the lawsuit succeeds.

(emphasis added by me)

Employers have tried to use this trick for decades. First, back in the late 60’s, they started giving executives titles in lieu of pay raises (up until then, titles always came with raises attched–you got the raise by earning the title). That worked so well that by the 70’s it had come down the food chain: secretaries started to be called ‘administrative assistants’, even ‘executive assistants’–but no raise. In the 80’s it got picked up by Wal-Mart who took it right to the bottom: grunts were now ‘associates’ and told they were ‘in charge’–of shirts, toiletries, cat food, whatever.

But it didn’t stop there, oh no. Manufacturers tried calling their line workers ‘independent contractors’, and instead of paying everybody at the same scale, they ‘negotiated contracts’, hiring the lowest bidders and pitting worker-against-worker. The ‘independent contractor’ scam had the added attraction that they didn’t have to do withholding or pay their share to the unemployment fund: ‘independent contractors’ were legally considered self-employed and thus responsible for their own unemployment payments. The Duke–Michael Dukakis was Gov then–put an end to that scam, thankfully, but it was just one in a long line of anti-labor tricks designed to push down wages and shove all their responsibilities onto their workers.

That’s why the new overtime rules are evil: it took years of lawsuits and investigations and fines to get corporations to quit playing these games on their employees; the Imperial Overtime Decree basically puts us all back to Square One, and we’re going to have to fight the same damn battles all over again.

Oops–Poverty Increased Again

For the third year in a row, poverty increased in BushAmerica. Golly whiz, Martha, what a surprise.

Poor and Uninsured Americans Increase for Third Straight Year

By Peter G. Gosselin, LA Times Staff Writer

WASHINGTON — An additional 1.3 million Americans slipped into poverty last year and another 1.4 million went without health insurance, the government reported Thursday.

It was the third year of bad news in both categories and further evidence that the U.S. economy had not snapped back from the downturn of earlier this decade.

The Census Bureau numbers also showed that the annual income of middle-class Americans, which fell in 2001 and 2002, had leveled off last year. Census analysts said the income of households at the center of the economic spectrum was $43,318 in 2003, a statistically meaningless $63 below its 2002 level.


Kerry seized on the new numbers as proof that Bush’s economic policies had failed. In a statement, the Democratic candidate ticked off trends since 2000 — median household income down more than $1,500; an additional 5.2 million individuals without health insurance and another 4.3 million in poverty.”While George Bush tries to convince America’s families that we’re turning the corner, slogans and empty rhetoric can’t hide the real story,” Kerry said.

In addition, some Democrats charged that the administration had released the Census Bureau’s numbers a month early to avoid delivering bad economic news during the fall election campaign. Census officials denied the charge, and some independent observers questioned whether the early release was of much help to Republicans.

It was clearly political–Rove decided it was better before the convention when they have both the time and the forum to do some damage control than it would have been in October when they had neither. But it’s also true that it might not make all that much difference either way. Yes, this story will be forgotten by November, but the reality of an economy that isn’t creating jobs and isn’t boosting incomes will still be with us and will most likely have deepened even more. Their hopes of a bump next month are looking slimmer by the day (Wall Street is awfully shaky after the oil manipulations of this summer), and too much HappyTalk at the convention about how much better everything is could backfire on them.

The Bush campaign countered that the income and poverty numbers painted an incomplete picture by not including the tax cuts championed by the president. In any case, they said, the trends were not as bad as they first appeared.

Uh, they’re saying the tax cuts helped us? Let’s see. Karlo at Swerve Left has done us all a favor by digging out the numbers, and guess what? The Bush Campaign just told another lie.

The wealthiest 20% of households in 1973 ate up a healthy 44% of total U.S. income, but then gobbled up 50% in 2002 while everyone else’s share fell! The bottom fifth’s share fell from 4.2 to 3.5%.According to the Congressional Budget Office, “For the bottom four quintiles, the effective individual income tax rate turns upward in 2004.” The current CBO report also states that, “The differential increase in effective tax rates among quintiles is reflected in a shift down the income distribution in shares of taxes paid. The share of taxes paid by the top quintile falls from 65.3 percent in 2001 to 62.8 percent in 2014, even though that group’s share of income does not change. Four-fifths of that decline occurs for the top 1 percent of taxpayers, whose share falls by 2 percentage points, to 20.7 percent of federal taxes in 2014. The share of taxes paid by each of the middle three quintiles climbs by about 0.7 percentage points.”

As the cheerleaders for our leader are wont to remind us: Things are getting BETTER! For the top fifth of the population, that is.


Jim Gilliam (see my links) has the following numbers recently released by the Congressional Budget Office concerning the percentage change in the tax burden by average income:$1,100,000: -2.1%
$182,700: -0.9%
$75,600: +0.8%
$51,500: +0.2%
$34,200: -0.1%
$14,900: -0.1%

Evidently, when the Shrub folk refer to tax-cuts benefitting the middle-class, they’re talking about the average Joe who’s making a million a year. It makes me feel good. I ain’t so average after all!

So if the Bushies figured in the actual CBO numbers instead of the ones they invented, taxes would have gone up for the most of the people he’s claiming saw decreases, and down for the poor an insignificant 1/10th of 1 per cent, which doesn’t even begin to meet inflation. I’m at the bottom level. If he thinks $150 extra in my pocket this year is something for him to brag about, he must be riding the white-powder horse again.

Bush made no mention of the figures in three campaign appearances in New Mexico, but campaign aides rushed out “talking points.” On poverty: “The poverty rate is still below the average rate of the 1980s and 1990s.” On health insurance: “The percentage of uninsured is still below its highest point during the Clinton administration.

Both of those claims are equally false, not that that’s going to stop them from being repeated endlessly endlessly endlessly by the Mighty Wurlitzer. Unfortunately they’ll be slamming headlong into undeniable realities when they’re doing it and convention HappyTalk ain’t gonna cut it–not now, and not in November

Labor Dept Does Something–May Be a First

Elaine Chao’s tenure at Labor hasn’t exactly been known for its aggressive treatment of illegal corporate labor practices, despite the inconvenient fact that that’s what it was created to do, and as the head of it, that’s her job. She has usually supported whatever lame legal excuse or maneuver corporate attorneys came up with to justify their clients’ behaviour, and been exceedingly lax in enforcing labor laws; when she bothered to enforce them at all, it was normally because lawsuits or outside pressure forced her to. So we are only too happy to note that DoL investigators responded to information from a small watchdog group in LA and busted a Target contractor’s Wal-Mart-style treatment of its janitors: wages below minimum, a 7-days/wk work schedule, hiring 15 and 16-year-olds as full-time employees, 50 and 60-hr/wk work schedules without overtime, non-payment of taxes, particularly Social Security–you know the drill.

Labor Department Wins $1.9 Million in Back Pay for Janitors
By STEVEN GREENHOUSE

Published: NYT, August 26, 2004

The United States Department of Labor announced yesterday that it had reached a $1.9 million settlement with a contractor for the Target Corporation after finding that the contractor had not paid overtime to hundreds of immigrant janitors who often worked seven nights a week cleaning Target stores.

Several janitors said in interviews that the Target contractor was doing much the same as contractors for Wal-Mart had done before an immigration raid at Wal-Mart stores last October – making late-night janitors work nearly 365 days a year, without paying overtime or Social Security and other taxes.

The Labor Department announced its back-pay settlement with Global Building Services of Newhall, Calif., after a two-year investigation found that Global had not paid overtime to 775 immigrant janitors who cleaned Target stores in California, Arizona, Nevada, New Mexico and Texas.

The Labor Department was tipped off to the violations by a Los Angeles group, the Maintenance Cooperation Trust Fund, that monitors whether employers are breaking the law when they use janitors.

“We investigated 50 Target stores, and we saw that janitors were being paid in cash, a flat rate with no overtime, no payroll taxes, no workers comp,” said Lilia Garcia, the trust fund’s executive director. “It’s a cancer in the industry; too many of these big retailers are using problematic contractors.”

Ms. Garcia said her group found that a half dozen of the late-night cleaners were only 15 or 16 years old. She said Global Building Services fired them soon after the federal inquiry started largely because state law bars teenagers so young from working so late at night and so many hours a day or a week. California officials participated in the inquiry.

Last October, federal agents raided 60 Wal-Mart stores in 21 states to arrest 250 cleaners who they said were illegal immigrants. The immigrants were employed by various Wal-Mart contractors, and as at the Target stores, they usually worked seven nights a week and were paid in cash without receiving overtime.

Labor Department officials declined to say whether they were investigating Wal-Mart or its contractors, although Wal-Mart has acknowledged that a federal grand jury in Pennsylvania is investigating whether it illegally cooperated with its contractors to use illegal immigrants as cleaners. Lawyers in New York have filed a class- action lawsuit against Wal-Mart charging various labor violations on behalf of what they estimate are thousands of illegal immigrant janitors.

Felipe Aguilar, who said he cleaned at five Target stores in Southern California, said in a telephone interview: “In my three years there, they gave me very few days off. And when I came back after being out injured for two weeks, the company said, ‘We can’t take you back. Someone else is working in your place.’ ”

Mr. Aguilar said that he worked about 80 hours a week, from 10 p.m. to 8 a.m. daily, and was paid $525 or $625 every 15 days. That came to less than $4 an hour, well below the federal minimum wage of $5.15.

His wife, Claudia, who also worked at Target, said, “We felt bad about the pay; sometimes we felt rage, but we were scared to complain because we needed the job.”

In a statement, Global Building Services said that after these problems were brought to its attention in November 2002, it cooperated fully with the investigation and changed its pay practices.

“We are pleased that we were able to reach an agreement with the Department of Labor to compensate our employees,” Global said. “The company is fully compliant, and we look forward to serving the needs of our retail customers. We feel this is all behind us now.”

Uh-huh. How could Global Building Services not know that something on this scale was happening? Don’t they handle the paychecks? Didn’t they notice the discrepancies, the lack of withholding? If you believe GBS’ absurd statement, you probably also believe that Saddam was responsible for 9/11 and the Easter Bunny wears tennis shoes and delivers eggs doing an impression of Tom Jones singing ‘Delilah’.

And we must add that while we’re all in favor of the Labor Dept actually doing something it wasn’t forced to do, we must in fairness note that: a) a $2Mil settlement is peanuts to a company that’s handling Target’s janitorial services in 5 states–5 huge states–and is hardly going to prevent them doing the same thing again when nobody’s looking, so it is effectively little more than the standard wrist-slap; and b) the DoL has yet to charge Target for complicity. It was Target, after all, who hired GBS and then didn’t bother to supervise them.

Oh, I forgot–‘But we didn’t know!’ Yeah, right. Ever notice that if you spend 25 cents on paperclips that wasn’t authorized, there’s a note on your desk from the comptroller the next day? How is that Target can track every expenditure to the penny except what they’re paying a contractor? How come if a buyer overpays $2 for an item their job is in jeopardy, but if they’re paying a contractor $$$MILLIONS$$$ less than the minimum he should be paying his employees, this they don’t notice?

The simple fact is, if you cost them a buck they’ll be all over you like white-on-rice, but if you save them a buck, they don’t give a damn how you did it. Steal it, extort it, exploit it–they don’t know, they don’t care, and they’ll never ask any questions.

From an old Bob & Ray routine–Wally Ballou (Bob) is interviewing a paperclip manufacturer (Ray) about how he san sell his product so cheap (10 cents a gross):

Wally Ballou: But how can your employees survive on $1.15 a week?

Ray: Oh, we don’t delve into the personal lives of our employees. That would be a wanton invasion of their privacy.

Wally: But where do they live? You can’t rent a room for a dollar a week.

Ray: Well, I understand a lot of them live in caves in the hills outside town and forage for food. They make their clothes out of tree bark and I’ve noticed, myself personally, that they don’t wear shoes. I call it ‘self-reliance’.

That routine dates back to the 50’s. Nothing much has changed, it would seem.

A Shortage of Skilled Workers? Really?

This article from today’s Washington Post is puzzling. It seems straightforward enough but it’s saying things that don’t always make sense.

Skilled Labor in High Demand
Employers Lament Declining Ranks of Capable Workers

By Nell Henderson
Washington Post Staff Writer
Wednesday, August 25, 2004; Page E01

David L. Hurley is eager to hire new workers at his Florida surveying company and isn’t asking for much: Only a dozen or so people with enough basic math to learn the software he uses to make blueprints, and enough basic sense to show up on time.

But after weeks of want ads and recruiting, he has drawn a conclusion: The workers aren’t out there. While there are plenty of people who “can fog a mirror” and might be able to do grunt work on a survey crew for $8.50 an hour, Hurley said the economy has run short of people with the types of basic skills he could mold into a $20-per-hour survey crew chief.

“I would add 15 people tomorrow if I could find them,” said Hurley, president of Landmark Engineering & Surveying Corp. of Tampa. “We need people with some knowledge of trigonometry and geometry. It’s really just arithmetic. We’re turning down work because we don’t have the people.”

What??!! Maybe it’s a regional thing and Tampa is understocked, but there’s something odd going on here.

I’ve been hearing this ‘We just can’t find qualified people to hire’ line for 40 years. It was never true in the past and I seriously doubt it’s true now. When employers say shit like that, it usually turns out that there are hidden qualifiers–adjectives they don’t say out loud that ought to be in front of the word ‘people’, like: white, male, or young. Is something like that going on here?

To explain why wage and job growth has remained weak during a nearly three-year period of economic expansion, economists point to a complicated set of dynamics.

Developing countries like India have become increasingly competitive in global markets, offering well-trained workers at comparatively cut-rate prices. American workers have become steadily more productive — a two-edged sword that makes each employee more valuable but which has largely boosted company profits instead of wages and hiring. The decline of organized labor and the stagnation of the federal minimum wage have helped suppress what workers are paid, say analysts like Harry Holzer, a Georgetown University professor and former chief Labor Department economist during the Clinton administration.

I added the emphasis to make this point: What the fuck do they expect? They’ve been boosting their profits on our backs: they admit we’re more valuable, yet what they’re willing to pay for all that extra value has been stagnant for 20 years. On top of that, they’ve been wedded to a hire/fire strategy in which there’s no security at all: when they need people, they hire them–at the lowest possible wage, never mind their skill or how high their productivity is–and in a few months, if business slips, they lay them off again. What incentive is there to get expensive training when a) they won’t pay you for what you know; b) they’ll lay you off as soon as they figure out how to get somebody else to do your job as well as their own (‘productivity’); c) they’ll outsource your whole industry first chance they get; d) they’ll fire you if business slips even a little; and e) there’s no guarantee you won’t be replaced by a computer program 6 months after you finally get a job? Do they think we don’t know this shit? Do they think we don’t understand that this ‘shortage’ is only temporary and that when it’s over we’ll find ourselves, like machinests and tool-and-die makers, with skills nobody wants any more?

These ‘shortages’ come-and-go like fads, and every couple of years employers bitch at us that we were trained for all the wrong things. A few years ago machinists were told to re-train for the lucrative new field of computer technology, so they did. Then–Whoops! Dot-com bubble burst and anyway Indian workers are cheaper. You’re fired. There was a shortage last year; there’s a glut this year. What’s the matter with you? Why didn’t you see this coming and get trained for something I can’t outsource until next year?

So if this sonuvabitch is actually losing business, wouldn’t it be worth his while to train some of those untrained people? Pay for them to take a night-course on geometry and trig? It’s not like it’s expensive. But no, he’s not doing that and it isn’t hard to figure out why: by the time they got trained, his business may have changed and he won’t need them any more so he’d just be throwing money away.

But an important and potentially worrisome piece of the puzzle can be seen through the experience of employers like Hurley, who contend that low-cost labor in India, China and elsewhere is far from the only thing inhibiting job growth in the United States.

Whether it is in expanding areas like health care or in the beleaguered manufacturing sector, employers say that once they are ready to add to their payrolls, it is often so difficult to find capable workers that positions are left unfilled. Those who have the required skills typically already have jobs, said representatives in a number of industries, while those who are available often aren’t qualified. Trade groups and business owners say employers are begging for engineers, machinists, information technology workers, radiology technicians, nurses, health care finance administrators, and even, in an age of computer diagnostics, auto mechanics.

Engineers? Machinists? IT workers? What are they talking about? Those are all areas that have been hit hard by automation and outsourcing. Millions were laid off from those fields in the last 10 years, especially the last 5, and they can’t find any? That doesn’t make any sense. I have to ask: What are the hidden qualifiers here? What do they really mean? That they can’t find people who are white enough, male, or young enough? Or are there new qualifiers? Do they mean they can’t find people who graduated from universities instead of community colleges?

Faced with the task of hiring a specialty aluminum welder in Michigan, where troubles in the auto industry have left thousands of blue-collar factory employees out of work, Diane Dearing came up empty.

“It’s hard to find skilled people,” said Dearing, president of Display Structures Inc., of Troy, Mich., which makes metal parts for trade-show displays.

This woman can’t find an aluminum welder in Michigan? Where thousands of highly skilled welders were thrown out of work when the auto plants got moved to Indonesia? That’s insane, I don’t believe that.

Economists and sociologists have long recognized the dual nature of the American economy — an $11 trillion behemoth that leads the world in technology, research and innovation, yet with a population that lags nearly a dozen other developed countries in basic literacy and science. American adults rank 12th in literacy among those of 20 high-income, industrialized countries, according to a 2002 study by the private Educational Testing Service; American 12th-graders ranked below the average of their international counterparts in math and science, according to the 1999 Third International Math and Science Study, a project of the Lynch School of Education at Boston College.

OK, now some perspective is starting to kick in: they want people fresh out of school who will work cheap, not older workers who’ve been downsized and may bring ‘attitude’ with them–a knowledge of what the job is really worth and maybe a willingness to buck the employer when they see corners being cut or scams being played out on them.

If I sound cynical, it’s only because I’ve been here before. They’ll do what they’ve always done–use us as long as they need us and then chuck us to the wolves and go after a new batch the next time.

I’m not saying there aren’t legitimate issues of under-training, poor schooling, and missed opportunities here. But the responsibility isn’t entirely ours. There was a hard-won social contract–an agreement–between management and labor for 50 years that management has abrogated consistently since 1980. They stole our pensions, cut our pay, moved our jobs offshore even when we were making huge profits for them, replaced us with machines even when the machines cost more than we did and couldn’t do the job as well, voted for people who promised to cut the safety net out from under us, voted for people who destroyed the educational system in the name of ‘tax relief’, and in general treated us like cannon-fodder that could be used and thrown away, and now they’re bitching because at the moment they need us and we don’t know what they need us to know?

Bullshit.

Overtime cut undermines workers

JOHN SWEENEY
SPI GUEST COLUMNIST

Yesterday, the biggest pay cut in American history took effect: The Bush administration’s overtime pay cut became official. It’s a new federal rule that could strip up to 6 million workers of overtime pay protection, forcing them to work longer hours without fair compensation.

Nurses, police lieutenants, chefs, team leaders, working supervisors, assistant managers and financial services workers are just some of the millions of workers who used to earn overtime pay when they worked more than 40 hours a week — and who will now lose that eligibility.

Not only will these employees no longer get overtime pay — they’ll be working extra hours for free, earning only their base salary. That means a huge pay cut. Currently, time-and-a-half premium pay for overtime work accounts for 25 percent of the income of those who work overtime. That averages out to about $161 every week.

And what incentive will employers have to keep workers’ hours reasonable if they don’t have to pay extra for extra work? Workers without overtime pay rights are twice as likely to work more than 40 hours per week, three times as likely to work more than 50 hours and three times as likely to work more than 60 hours. The fact is that workers will have less time with our families, thanks to President Bush’s new overtime rule.

These overtime rules are also bad news for our economy — at a time when we can least afford it. Our nation is already in a deep jobs hole; we have 1.6 million fewer jobs than when Bush took office.

Last month, experts were disappointed when the economy created only 32,000 jobs as opposed to the 200,000 expected. Under the new rule, employers will tend to work their current workers longer hours rather than creating new jobs, making the underlying problems in our economy even worse. At a time when workers’ paychecks are down, joblessness is up and Americans are working more hours than workers in any other industrialized nation, Bush has made the wrong decision in implementing his new rule.

Even three former Department of Labor officials — three of the highest-ranking DOL officials under Presidents Reagan, Bush and Clinton — agree that these new overtime rules hurt workers. They have issued an analysis that concludes that with one exception, every one of the administration’s changes to the overtime rules will weaken the eligibility requirement and increase the number of workers who will lose their overtime rights.

This new rule was sold as “modernization.” But the truth is these are changes in the law that giant corporations have fought for years to win.

A number of low-income workers will gain overtime pay rights under the new rule, and we applaud this long-overdue change. But this gain does not justify the Bush administration’s decision to take overtime pay rights away from millions of other workers, a move bipartisan majorities of Congress tried to block.

Last May, the Senate voted not once but twice to guarantee that no worker will lose his or her overtime rights. The two amendments passed by the Senate, we believe, would repeal large portions of the Bush regulation that restrict overtime eligibility. This marks the fourth time in the past year that Congress has voted to prohibit overtime pay cuts.

But the overtime guarantee passed by the Senate is unlikely to become law unless approved by the House. This explains why the House Republican leadership has blocked any debate or votes on protecting workers’ overtime rights — because they know that an overtime guarantee would likely pass in the House and would repeal major portions of the Bush overtime regulation. U.S. workers deserve an up-or-down vote in the House on this issue when Congress returns in September.

An overtime guarantee would give workers the peace of mind of knowing they will not be losing their right to overtime pay, and it would calm the intense political passions that have been stirred by the Bush plan. Anything less is simply a massive pay cut for America’s workers.

John Sweeney is president of the AFL-CIO, which represents 13 union members.