June 29, 2012 |
Photo Credit: Sarah Jaffe
This week, David Segal at the
New York Times
broke the news to America that not only was Apple -- the computer and
gadget manufacturer formerly seen as a symbol of good old American
ingenuity -- making its profits on the backs of abused factory workers
in China, but also on poorly paid store employees here in the US.
Apple store workers, he wrote, make up a large majority of Apple's US
workforce—30,000 out of 43,000 employees in this country—and they make
about $25,000 a year, or about $12 an hour.
Lawrence Mishel at the Economic Policy Institute
notes that that's just a dollar above the federal poverty level. This
for a company that paid nine of its top executives a total of $441
million in 2011.
“The discrepancy between Apple’s profits/executive pay and its
compensation to its workers is a particularly glaring example of what is
occurring in the wider economy,” Mishel writes.
And he's right. Also this week, Henry Blodget at Business Insider
posted three charts
that show just how out of whack our economic system really is.
Corporate profits are now at an all-time high, while wages as a percent
of the economy are at an all-time low, and fewer Americans are employed
than at any time in the previous three decades.
Companies like Apple are squeezing their workers, leaving them to live
on less, while lavishing pay and benefits on their executives. The death
of lionized Apple chief Steve Jobs seems to have opened a floodgate of
reporting and criticism of the company's labor practices, but all this
really proves is that Jobs and his empire are no better than, and no
different from the rest of the US business elite. Just like everyone
else, they're taking their profits directly out of workers' pockets.
“One reason companies are so profitable is that they're paying
employees less than they ever have as a share of GDP. And that, in turn,
is one reason the economy is so weak: Those 'wages' are other
companies' revenue,” Blodget points out. And high unemployment makes
workers willing to accept those poverty wages. When you're desperate for
a job, any job is better than nothing.
Right-wingers from
Michele Bachmann to
Ron Paul
have used high unemployment as an opportunity to call for eliminating
the minimum wage entirely, letting companies decide just how little they
think their workers are worth. Companies love to claim that if they're
forced to pay more, they'll have to eliminate jobs, but these numbers
show that actually, they're able to keep wages low and refuse to hire;
available cheap labor supposedly leads to more job creation, but it's
the hollow, gnawing fear created by ongoing high unemployment that keeps
wages low and workers passive. And the rich are getting ever richer.
The “recession” is over—
officially it ended in 2009,
but for most people the pain was just beginning. Real incomes have
continued to fall, governments continue to slash budgets while corporate
profits just keep going up. This is the new normal.
And it's only going to get worse.
The rhetoric of austerity, sounded loudest from Republicans but often
echoed by far too many Democrats, is a language of belt-tightening, of
shared sacrifice, of somber speeches by pompous politicians who proclaim
that they feel your pain while announcing budget cuts that freeze
salaries, lay off workers and force more work onto those who remain. And
CEOs use that same language when sorrowfully explaining why they simply
can't create jobs.
Morgan Stanley's CEO, James Gorman,
beset by New Yorkers at his bank's shareholder meeting, blamed the
lousy economy when asked why he hadn't created the jobs his company had
promised the city in exchange for massive tax breaks.
Because that's what rich corporations are able to buy with their record
profits; politicians who turn around and hand them even more money,
often in the form of tax breaks that hollow out city and state budgets
and force even more austerity, even more social service cuts that fall
on the backs of the same underpaid workers. (Remember
FreshDirect, handed $129 million in tax subsidies to create $8-an-hour jobs?)
Corporate taxes, too—at least the ones corporations actually pay—are at a
40-year low,
with an effective tax rate paid of 12.1 percent. They've fallen from
about 6 percent of GDP to less than 2 percent, according to
ThinkProgress's Pat Garofalo. Once again, that's what you can buy when you'd rather pay politicians than your workers.
Chris Hayes, in his new book
Twilight of the Elites, notes that
the ultra-wealthy have spawned a whole “income defense” industry
dedicated to preserving their wealth and power, an industry that works
tirelessly to push policies that favor the rich. He writes:
Over the last decade, the political arm of the income defense industry
has been wildly successful. The tax cuts passed by Bush and extended by
Obama represent a total of $81.5 billion transferred from the state into
the hands of the richest 1 percent. Meanwhile, hedge fund managers and
their surrogates have deployed millions of dollars to lobbyists to
maintain the so-called carried interest loophole, a provision of tax law
that allows fund managers to classify much of their income drawn from
investing gains as “carried interest” so that it is taxed at the low
capital gains rate of 15 percent, rather than the marginal income rate,
which would in most cases be more than twice that. It was this wrinkle
in the law that helped Mitt Romney, a man worth an estimated quarter of a
billion dollars, pay an effective tax rate of just under 14 percent in
2010. In 2008, 2009, and 2010, the House of Representatives passed a
bill closing the loophole, only to see it beaten back by an intense wave
of lobbying in the Senate.
With
Citizens United, the Supreme Court gave the ultra-rich yet
another weapon in the class war, another tool by which to control our
politics. MIT economist Daren Acemoglu told
ThinkProgress,
“We already had a very serious problem. Instead of trying to stem that
tide [of money in politics], we’ve done the opposite and we’ve now
opened the sluice gate and said you can use that money with no
restrictions whatsoever.”
It's bad enough when the rich use their money to buy themselves tax
breaks that help them get even richer. But millionaires and billionaires
from
Bill Gates to
Betsy DeVos to
Mark Zuckerberg
are also putting money into pet political ideas; on education, for
example, where their money buys them outsized influence over policy.
Politics has become a playground for the ultra-rich, where they get to
test their pet theories on the rest of us and we're expected to smile
and thank them for their charity.
It's not just tax breaks and subsidies that have created massive
inequality—it's also full-on war on the only means of organized power
that working people ever had: unions. Private-sector union density
hovers around 7 percent right now, after years of concerted attacks, and
for the last couple of years public sector unions have been in the 1
percent's crosshairs.
From the
Supreme Court,
where Samuel Alito wrote a majority decision attacking unions' ability
to collect money from workers they represent for political activity, to
the reelection of Scott Walker in Wisconsin, public-sector unions are
under pressure. Politicians keep
slashing public-sector jobs,
keeping unemployment high and tax revenues low, and stalling the
recovery, but they're also part of the attack on the one part of the
economy that still has a strong union culture.
As unions declined, so have wages for most people. The
Center for American Progress
found in a study that as union membership decreases, so does the
so-called middle class's share of national income. The middle class long
served as a buffer
between those at the top and those at the bottom. As long as the
majority of Americans were comfortable, had decent jobs and pensions,
and could send their kids to school, the wealthy could stay wealthy and
the poor were pretty much just ignored. And that middle class was built
through decades of union agitation, not just for higher wages and
healthcare benefits, but for the
eight-hour day, for the weekend, for safety
in the workplace and some job security.
But now the middle class has been hollowed out. Increasingly, there are the super-super-rich, and there are the rest of us.
As Hayes writes, we're ruled by an ever-smaller group of elites who not
only control all the resources, but all the power. The same people who
are pushing wages downward are the ones paying for politicians'
campaigns, and they're the same people on the boards of directors and
trustees of our universities, our institutions—like
JP Morgan Chase's Jamie Dimon,
who serves on the Board of Directors of the Federal Reserve Bank of New
York, the National Center on Addiction and Substance Abuse, the Harvard
Business School, Catalyst, as well as on the Board of Trustees of New
York University School of Medicine.
Meanwhile, for the vast majority of us, the recession that supposedly
ended in 2009 looks more like a depression each day, and as long as low
wages and high unemployment remain the order of the day, there's no
recovery in sight.
Sarah Jaffe is an associate editor at AlterNet, a rabblerouser and frequent Twitterer. You can follow her at @sarahljaffe.
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