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A Dream Short-Circuited

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By Harold Meyerson
Wednesday, April 11, 2007

On March 28, Circuit City announced that it was laying off 3,400 of its salesclerks. Not because they had poor performance records, mind you: Their performance was utterly beside the point. They were shown the door, said the chain, simply because they were the highest-salaried salesclerks that Circuit City employed.

Their positions were not eliminated. Rather, the store announced that it would hire their replacements at the normal starting salary.

One can only imagine the effect of Circuit City's announcement on the morale of the workers who didn't get fired. The remaining salesclerks can only conclude: Do a good job, get promoted, and you're outta here.

It was, in short, just a normal day in contemporary American capitalism.

Over at Wal-Mart, the employer that increasingly sets the labor standards for millions of our compatriots, wage caps have been set for certain jobs, and many longtime employees are now required to work weekends and nights in the hope that they'll quit. A memo prepared by a Wal-Mart executive in 2005 for the company's board noted that, "the cost of an associate with 7 years of tenure is almost 55 percent more than the cost of an associate with 1 year of tenure, yet there is no difference in his or her productivity."

(That, of course, is because Wal-Mart does nothing to raise its employees' skills lest it have to raise their wages.) Coincidentally, in the same week that Circuit City axed its clerks, an analysis of Internal Revenue Service data from 2005 that became available showed that the bottom 90 percent of Americans made less money that year than they had in 2004. According to a study by economists Emmanuel Saez of the University of California at Berkeley and Thomas Piketty of the Paris School of Economics, total reported income in the United States increased by 9 percent in 2005 over its level in 2004. All of that increase, however, came from the wealthiest 10 percent of Americans, and the wealthiest 1 percent experienced an increase of 14 percent. Among the remaining 90 percent, income actually decreased by 0.6 percent.

And 2005, let us remember, wasn't a year of economic downturn. The American economy was humming along. It was only the American people who weren't doing very well.

What all this amounts to is a triumph of corporate and financial power, and of the conservative economics that shores it up. Once upon a time, American prosperity actually benefited Americans. From 1947 through 1973, productivity in the U.S. rose by 104 percent, and median family income rose by an identical 104 percent. Those were also the only years of real union power in the United States, years in which one-quarter of the workforce, and in some years one-third, was unionized. Apparently, this level of worker power and mass prosperity proved intolerable to our financial elite and their political flunkies.

Since the '70s, American business has generally done its damnedest to keep its workers down. Employers routinely opted to pay the negligible penalties for violating the National Labor Relations Act rather than permit its employees to join unions. In 1969, according the National Labor Relations Board, the number of employees who'd suffered illegal retaliation for exercising their right to join or maintain a union was just over 6,000; by 2005, that number had risen to 31,358. According to a study out this January from the Center for Economic and Policy Research, fully one in five activists on unionization campaigns are illegally fired. And as worker power declines, so do living standards. Secure retirement pensions are history; employer-provided health benefits are going fast.

To all of this, conservatives offer no remedy whatever save to make things worse. Employer-provided pensions collapsing? Let's gut Social Security, too. Health insurance tottering? By all means, let's preserve our private, for-profit system, which currently fails to cover 47 million of our fellow Americans. All income increases going only to the rich? Let's switch to a flat tax (Rudy Giuliani's most recent brainstorm), which further shifts the tax burden from the upwardly mobile rich to the downwardly-mobile everyone else.

And restoring the right of workers to join unions, which is the key to rebuilding a vibrant middle class? There's a clear way to do that. Next week, the Senate will take up the Employee Free Choice Act, which the House has already passed. By compelling employers to recognize unions if a majority of their workers sign affiliation cards, the legislation would bring a modicum of balance to workplace relations, and to the American economy as well.

Business, the president and the Republican leadership are fighting the measure with everything they have.

What they don't have, however, is their own theory of how to regain mass prosperity. How could they? Mass prosperity is precisely what they've labored mightily, and successfully, to destroy.

meyersonh@washpost.com


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