← Economic Update with Richard D. Wolff
Economic Update with Richard D. Wolff
Economic Update: Employer vs Employee: Capitalism's Endless Conflict
00:28:59
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- [00:10]
A
Welcome friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives. And I'm your host Richard Wolff, here to bring you these updates each week. I want to begin by mentioning today's theme that capitalism is an economic system that is a continuous war between the employer and the employee. It really never stops, even when it appears to. And many of today's updates kind of illustrate that point. I want to start with the exotic dancers in Los Angeles at a place called Soldiers of Pole. They went out being women. They went out on International Women's Day March 8, and their story is a story of the continual war of labor and capital. Here's how it they were considered independent contractors, consultants, things like that in that so called gig economy. That was a ploy so employers wouldn't have to offer them benefits and protections of the sort that are written into law for workers who are regular employees. But then there was a case brought and decided by the Supreme Court in California early last year and that said you can't do that anymore, that employers really can't evade their obligations to employees simply by using a category to escape those legitimate obligations. Okay, so now the strippers were regular employees and they quickly discovered that their employer was now playing around with the hours and the timing, basically trying to do to them as employers what had before been done to them as independent contractors, proving again that whatever the legal arrangements are and whatever reforms are passed, that war is never over and they're just always looking for other ways to get the same outcome. The next update has to do with an embarrassment for President Trump. Turns out that the deficit in the trade between the United States and the rest of the world reached a new record here after two years during which Mr. Trump has been telling us all of the great strides he's made in preventing us from buying stuff abroad and having it produced instead here, no success at all. Failure, failure. And to drive the point home, failure. What's at this the lesson here that Mr. Trump isn't good at what he does. Well, you don't need me to point that out. Let me make the bigger presidents don't have enough power no matter what they do. Capitalism is a system that has its own ways of working. And mostly what presidents do is diddle around the edges, but they can't change the basic logic and the basic thrust of this system. That's the lesson that's important here. Just to give you an example, you can make all the theatrical announcements you want about bringing manufacturing back, but as long as the wages are lower in the rest of the world than in the United States, which they have been, although that's changing, but they have been. And that's where capitalists go, where the wages are lowest. That's the same message as the strippers are learning and teaching us in Los Angeles. Likewise, because the rest of the world is facing real threats to the existing capitalism there. Wealthy people around the world are afraid and they move their money to New York and to the United States for safekeeping. And that drives up the value of the dollar and that makes it easier for foreigners to sell their goods here because the value of the other currency is less if the value of the dollar goes up. That's the way international trade, trade works. The very success of Mr. Trump in making America super safe for capitalists and wealthy people undermines what he's trying to do in terms of the trade. And the end result is we have the biggest deficit in the history of the United States after two years of a regime of a president who promised to do the other. And then there's the UN report published by the Human Rights Council of the United Nations. Their chief, Michel Bachelet, a Latin American leader, has made the simple argument that the level of inequality in the world today is producing protest uprising on a new scale that has been met by governments using repression. And she particularly cites in her report Sudan, Israel and France with the repression of the government of France against the Yellow vests, something we've talked about on this program. It caught my eye that just as the inequality was producing repression and all of that kind of tension, we also had the announcement that the most expensive car ever sold changed hands in this last month. It's a Bugatti, which was sold for $11 million. An illustration of inequality if you actually need it. The next update has to do with the city of Lordstown, Ohio, where the General Motors plant that has existed there for many, many years finally closed its doors, dumping yet another large group of working people into unemployment, plunging the city of Lordstown into God knows what kind of cutbacks in public services and depression. Back in the 1970s, General Motors reached an all time high employment of 618,000 employees. Today it has 103,000. From 618,000 to 103, a tiny group of people, the boys of directors of General Motors, made the decisions that deprived half a million workers over these years of their jobs, their incomes, their pensions, their futures. It's extraordinary. The real wage that is the money paid to auto workers today, adjusted for inflation, is lower than what it was 15 and 20 years ago, that's what the automobile companies didto make money abroad to move their factories around the United States to get away from the rules and regulations, to save on wages. They made money at the expense of literally millions of family members in this country. And you all should understand it and think about what that means. And then there was a decision of the Trump administration and the Federal Reserve a couple of weeks ago to, to reduce banking regulation. That took my breath away. We've had 10 years during which first the banks went bankrupt in 2008 because of the fancy gimmicks, asset backed securities and credit default swaps. You remember the language when they mishandled the world's credit system and we all collapsed. Then we had 10 years in which the big banks literally did every illegal and unethical thing imaginable. They manipulated interest rates, the Libor scandal, they got caught manipulating foreign exchange rates, they got caught charging people for fees they shouldn't have. They got caught mismanaging the mortgage crisis, you name it. Oh, I forgot, laundering criminal money. Shouldn't forget that. They got caught. They paid billions in fines. After a record 10 years like that, the logical thing is to give them less regulation. I told you it'd take your breath away. But that's what we have. You know, Mr. Obama didn't do much for banking regulation. He got through the namby pamby Dodd Frank bill which didn't regulate much, and Mr. Trump is reducing that too. It's interesting if you look at the Trump administration, the new budget has an enormous increase for the military and this deregulation, that's an enormous good thing for the banks. And the tax cut of December 2017, that's an enormously good thing for employers everywhere. As the corporate tax got slashed, he may not be able to solve our trade problems. He may not be able to give you a job, he may not be able to give you a decent income. He may not be able to help your kids with their college education. But taking care of the military, the banks and corporations is very good at that. And that's something else you ought to think about when you think about this government. Oh, and I left one thing out. The Consumer Financial Protection Bureau announced that it's relaxing the rules governing payday lenders also. Oh, how charming. While you're helping the military, the banks and the corporations, and while you're reducing the control over the banks, you, you're relieving the payday lenders. You know, the people who charge workers who've got too much month at the end of the money, extraordinary levels of interest to get a little bit of help. Wow, what a government. Whatever that means. It all adds up to making America great again, don't you think? We've come to the end of the first half of Economic Update. I want to thank you all. I want to ask you, and please to remember, subscribe to us on our YouTube channel. It's an easy way to be supportive of us. It's a simple click for you, no cost at all. Make use of our democracyatwork.info and rdwolff with 2F's.com. those websites allow you to communicate directly with us through email and with a click to follow us on Facebook, Twitter and Instagram. Finally, of course, as always, our thanks to the Patreon community whose support, whose encouragement and whose partnership with us in bringing these messages to a larger community are enormously appreciated. Stay with us. We have an excellent interview. We'll be right back. I would like to take a brief moment to tell you about my latest book. It's called Understanding Marxism. Marx was a social critic who identified capitalism as not an end of human history, but rather merely the latest phase of human history, which, as we now see, needs a transition to something better. You can get your copy of Understanding Marxism Today by Simply going to lulu.com that's l u l u.com and searching for understanding Marxism by me, Richard D. Wolff. We are also very proud that this book is the first one published by our group, Democracy at Work, and we're proud to be able to bring it to you at this time. Welcome back, friends, to the second half of Economic update. We're going to be continuing our theme about the endless war between employers and employees and what it means and how it works. And we're going to do that with my guest. He's been a guest on Economic Update before. He's a reporter by the name of Bob Henley. So it's a pleasure to welcome you back.
- [12:01]
B
Thanks.
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A
Just to remind everyone, Bob Henley is an award winning print and broadcast investigative journalist. Not too many of those left these days. He's a staff reporter with the New York City based Chief Leader, a newspaper that has been covering public employees and public employee unions and the civil service since 18, 1997. Been around a long time. He is a regular contributor as well to Salon magazine where he writes on the economy and labor. He's been published in an enormous array of publications. I'm going to mention a few the Guardian, the New York Times, CBS, Money Watch, PBS NewsHour, NPR, C Span, the BBC and CBS's 60 Minutes. So it is with great pleasure that we have a really professional journalist with us today. Let me begin with a story that I know you covered, that I want you very briefly to tell our viewers and listeners about the fire departments in our cities, particularly here in New York City, but across the country, have to work in close proximity with a group of workers called emergency medical technicians, people who are often in a position literally to save our lives, and yet they get paid very differently. And I want you to tell us why that is and why that has become a big news story in the last few weeks.
- [13:26]
B
Well, you know, this issue is each municipality is different. And so New York City has a unique history where historically the EMT service was part of the Health and Hospitals Corporation. Rudy Giuliani, Republican mayor, pulled it away from health and hospitals and gave it to the fire department, which was having some struggle because structural fires were down. And like throughout the rest of the country, they needed a mission. So emergency medical service became that mission. And what ended up happening was we're now in a situation where these EMTs have to wear bulletproof vests because they're in harm's way. They have to respond to counterterrorism situations, live fire events, if you will. But this workforce that is involved with emergency medicine is primarily composed of women and people of color. They make some $40,000, $45,000 a year compared to the fire department side, the fire side, which can make $85,000 a year. And so as a consequence, you have people leaving the EMT service going to talk about perverse incentives to go to the fireside. And so we have a relatively inexperienced EMT corps here in New York City. What that means is that we know from peer reviewed medical science it takes about six years for people to get the kind of experience that you need to be really good at this job. Through capital, being on top of labor and driving these decisions, we have a workforce that's not experienced when it comes to EMTs, a constant churn of these people that cost money to train and also a high burnout rate. Because one of the things that's happening is they leave the EMT core so quickly that, that they all have 700 vacancies at a time, which means people are working extended periods of hours, overtime, even to the point where they get injured. We know that when people work a lot of stressful occupation and work many hours, they're more likely to injure themselves. In fact, working tired is considered now by occupational scientists working impaired. So that's the situation we have right here in New York City. And they're looking for equity. They want to be brought up alongside of the firefighters because they're first responders.
- [15:39]
A
And what I find so striking, again, is that obviously we want emergency medical technicians who save lives almost as a matter of their regular job to be given the respect, to be given the salaries that they deserve and that we who need their services to deserve. This is a system where they have professors of economics like me explaining that the market is a wonderful institution that gives people the income they deserve and that creates incentives for people to specialize in learning so they can do a good job. You've just told us a story that this system stinks at that, that it rearranges itself.
- [16:22]
B
It's worse than that. And I'll give you an example. New York City has relatively a high level of compensation for EMTs, considering the national situation where pay averages $16 an hour, $33,000 a year to save people's lives. So you have a situation where people are working other jobs and are fatigued when they're trying to save lives. And if we pull back and say we're concerned about patient outcome, remember that logic from Obamacare, and we're concerned about long term healthcare costs. The most important, an important period of time, if you need intervention, is what they call the golden hour. That's the first hour that it becomes apparent to other human beings around you that you need medical attention. That's where we're cheating people the most and cheating patients and the workforce at the same time. This is a prime example of what I call late stage vulture capitalism at its worst.
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A
Yeah, it reminds me of a teacher who once looked at me when I was explaining wages and said to me, give me an explanation for why it's the case that we pay more to the people who park your car in a parking lot than we pay to the women who take care of children in daycare centers. Right. Everybody knows that the early years of your life are very crucial to your development. So we pay less to the women into whose hands we put our children than the people who park the vehicle in the parking lot. It's a sign of a system that doesn't work well when these stories are so eager. But I want to move our attention another place. Recently, because you're a labor reporter, we have been hearing stories about a proposal coming from the most progressive parts of the Democratic Party, Alexandria, Ocasio, Cortez and others, about a Green New Deal. Right. I'm struck by that. I'm struck by putting these terms together. The New Deal, which really was a massive program to help working people and green a recognition of the ecological disaster we are living through. Tell us a little bit about why that's in the news and what you as a labor reporter picked up on as this is being debated.
- [18:29]
B
Well, unfortunately, I think in our Twitterverse that we're in, it got off to a bad start because the right wing reactionary media picked up on something that wasn't in the actual legislation, but in a frequently asked question support document that had been put out around the same time. And there was a reference very far down that the system, the economic system that was being visualized would provide money and support for those people that were unable or unwilling to work. And so out of 2,000 words, they zeroed in on that and they didn't reflect on the fact that right above that was referenced in to something that I'm sure your viewers and listeners are familiar with, Franklin Delano Roosevelt's second Bill of Rights, which was given as part of a State of the Union address in 1944, which really talked about the fact that this country was at a point where it had gone as far as it could in terms of delivering on the Bill of Rights a political document, but it had fallen far short because so many people were in need. And he extorted the American population not to accept this circumstance where so many people were doing without, because then the republic wouldn't really achieve its potential success. And so he talked about work as a right, as something that needed meaningful, dignified work was something that people should have as a right. They didn't focus on that part because really the Green New Deal is all about work.
- [19:48]
A
You know, it strikes me when Social Security was put forward by FDR as part of the whole New Deal, it was opposed by right wingers and socialism. The same story. When unemployment compensation was proposed in the 1930s, the right wing again attacked it. When federal jobs, of which there were 15 million, were proposed and put into effect. It was opposed by these people. They are always the same ones who find some little detail like this and become enraged around their anxiety that actually helping people who need it is some sort of threat to their society. It's a bizarre kind of reaction.
- [20:33]
B
I would say that part of the problem is I have a few critiques about the Green New Deal. I do think they need to work higher up into the preamble, a reference to Franklin Doleano Roosevelt's second Bill of Rights, because I don't think it's taught, I don't think people even know it exists. So there's this sense of historical continuity with the mainstream of American history. The other thing is I don't think they come directly from at a critique of late stage vulture capitalism the way they need to. They really need to lay out for people that the problem with fossil fuel generated vulture capitalism is that it privatizes the profits and socializes the environmental waste and degradation similarly, and they need to make this point as well. Automation does the same thing. These great geniuses of high tech things that we worship are basically repurposing taxpayer funded Pentagon research which then they privatize the profits and then socialize the idle people and it becomes a cost externality for them, but it becomes our problem to deal with the mass of individuals with nothing to do.
- [21:36]
A
I'd like to also just personally attack this notion that people who don't want to work. Let me be an economist and explain why this is not what you might think. In the aftermath of the crash of 2008, we saw in the United States a tremendous drop in what we call the labor force participation rate. It was particularly middle age white males, more than anybody else, who didn't quote unquote, want to work. By the way, these are the people who put Mr. Trump in office, right? They were angry. They were takingthey found the good jobs with good pay and good pensions and good benefits taken away from them and they were told, hey, go get a job, be a greeter at Walmart, go flip hamburgers, go. And they said, wait a minute, we've given 20, 30 years of our lives, we've worked very hard, we've accumulated skills. Everyone has said we did good work. You're just throwing us on the we're not going to do it. We're going to go home and take care of an elderly person. We're going to go home and help out with the children. We're going to go home and build another wing on the house that we need. Don't tell us we're unwilling to work. You've deprived us of the conditions. If Franklin Roosevelt were here, he'd say we're devoted as a nation to giving people a good job and a good income. And if we can't do that, we can't turn on them and say you're unwilling to work.
- [23:09]
B
Right. I do think that one of the problems here is that we have to reframe the debate and look at the fact that people did come up with social utility. They did care for grandchildren, they got involved in the lives of their children by helping them with taking care of their grandchildren. And so to come back in the labor force means disrupting the real political economy that is of consequence to them. Similarly, we've had, because of the traumatic nature of what we've been through with this, with capitalism, we're in a situation where we have this growing ranks of disabled with all kinds of issues related to the random and capricious nature of capitalism that has inflicted psychic trauma on millions of people where they had a job one day in social standing and then were stripped of all of that. So I do think that we do need to reframe this discussion and really look at the fact that the Green New Deal is about a broad based bottom up prosperity that heals the planet.
- [24:10]
A
That's right. And that let's have a Green New Deal so that we change the conditions. For those who might say today I'm unwilling to work or be accused by someone who's kind of cruel in their mentality, give them the conditions and we'll see that they're going to be willing to work. By the way, the so called unwilling are coming back into the labor force the last two or three years, but not because the jobs are better, but because we've kept them out of work so long that they've used up their savings, they've used up the resources of their families, they're coming back. And to say to them that they ought to, that we have no obligation, that this is a system that has no obligation to a person who's given his or her life of work, but to say, okay, we're going to pay you now next to nothing, put you in poverty, that's the fastest growing part of our labor force, that's a failure of the system. And it ought to be the system that's up there to be criticized, not those people who react to its failures by saying there's better things I can do with my time than work at an unskilled job for $15 an hour, given what I've done all my life.
- [25:17]
B
Right. I mean, one of the things that's happened that people aren't paying attention to is first of all, we've mentioned this before. The decline in American life expectancy is a tangible thing three years in a row, first time that's happened since World War I. And then on top of that, you have a situation where because of the decline of the social contract about work, the degradation of it, we have millions of people that are waiting by the phone to be told they could work that particular day, particularly young people. And so they're in this situation right now where we have a thing that's happening where there are millions of American young people from 16 to 24 that aren't in the labor force participating, aren't going to school and aren't working. This has never happened before. This is a global issue where capitalism is really failing the future. So we need to have a conversation about how do we engage young people to get the sense of the rhythm of work, and what do I mean by that? And this is where labor really has to come out in full force in supporting the concept of the right to a job. There's something we learn as a teenager or when we work a summer job where we put our interests and our indulgences to the side to serve someone else. This is the core function of the value of work. And I don't care whether it's for remuneration, but if you're doing where you're putting your needs secondary to someone else, that's service. And we've had a society for too long that has not been keying into this key fundamental human aspect of service. This is what we all should be living our lives for. We've gotten away from it with this concentration of the dream of America is to be idle but wealthy, Right?
- [26:53]
A
The joke is the people unwilling to work who really pull it off with no one saying boo. Are the people rich enough to not have to work, rather than to solve its problem?
- [27:03]
B
And we tax our capital less than we tax the labor of people who earn their living by working.
- [27:07]
A
But it is for me, just one last time, there's something very ugly. It's like people who beat their children and when confronted with doing that, say, well, I got beaten. You know, that's a reason not to do it, not a justification for doing it. To say to a person who says, I don't want to live anymore, to say, well, we're not going to help you. We're not going to see that. Oh, you must be suffering to feel that way. Nah, you have to live anyway. What is this? A person who says they don't want to work is a person who doesn't want to be part of the community. That's a problem. We should help that person, and we should for sure provide them with a decent opportunity before we ever open the door to being hostile and cruel and critical. The people who say to those unwilling to work, those are the people who are doing nothing to create the conditions that would make those people actually become workers alongside the of the rest. Rest of us.
- [28:04]
B
I think that it's instructive to remember that in terms of universal income the concept that you have to lift all boats have as divergent supporters as Martin Luther King and Richard Nixon. Let's not forget that.
- [28:16]
A
Folks, we've come to the end. I hope you will agree that this is a really important set of questions about working people. The right to work, the right to a job, the right to be treated decently by one another and the right to be paid for the importance of the work that you do and for the importance of you as a person raising a family and living a life. It's not a system that could treat people as disposable. When capitalism does that to its employees, it's not that different from what masters did in the way they treated their slaves as another working animal. It's an important lesson. Thank you very much for being with us and I look forward to being with you again next week.