← Economic Update with Richard D. Wolff
Loading summary
Transcript1 lines
- [00:10]
A
Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives and those of our children. I'm your host, Richard Wolff. I want to begin today by reminding you that, as some of you have now taken to heart, that we welcome communications from you about stories you think are important and that deserve the kinds of analysis we do on this program. I want to give you again the name of my friend Charlie Fabian, who is handling this process, and he has a website where you can communicate and he will respond to you if you have suggestions, ideas, materials, references and so on. Here is his Charlie, spelled C H A R l I e charlie.info438mail.com Once again, charlie.info438mail.Com the first half of today's program is going to be devoted to unions and striking because that's going on in this country in ways that it has not for a long time, and it doesn't get the attention of the mass media anywhere near related to its real importance in American life and history. And in the second half, we'll have something to say about the old debate between reform and revolution and also the examples in American history when either the market was set aside as an institution we don't want or the market wasn't set aside, leaving us with consequences of the market that we don't want either. These are important topics to bring awareness to in this moment of our history. So let's begin with the unions and the strikes. I'm going to begin with a remarkable story. Graduate student workers, two or three thousand of them, are a feature of many universities. They get away with giving work to their graduate students. Instead of giving them grants so they have the time to study, they give them a job. This is clever because the students need the money, in part because the university doesn't give them a grant, doesn't help them pay. And also the university gets cheap labor this way. And graduate students are smart enough to know exactly what kind of con is being done on them. And the students at Stanford University, a leading institution in this country's higher education world, voted recently, 94% in favor of joining a union. Here's the vote, because the lopsidedness of this vote tells us a lot. In favor of joining the Union, 1,639 votes opposed, 108, no contest. Here they are joining the Stanford Graduate Workers Union. You see, these students are not afraid or shy of understanding that, yes, they are students, but above all, they are workers. And that's how Stanford treats them. They affiliated with the United Electrical Workers Union, an old union. Progressive, more than most unions, the likely choice for a student organization of this kind. Let me remind you also that earlier this year the graduate students at the University of Chicago had a similar unbalanced vote. They voted at the University of Chicago with 1696-155 graduate students at the University of Southern California, at Yale University and at the Massachusetts Institute of Technology have also voted to unionize over the last two years. These are very important for many reasons. These highly educated, energetic young people in our society are choosing unions. They want them, they need them. It is changing the whole face of unionization. And as these young people enter the unions, they're going to be changing the unions too. And that's in a direction very different from the right wing politics that gets so much attention. This is going on a bit below the radar. My next story has to do with the United Parcel Service. Their workers voted 97% and there are a lot of them. Just shy of 350,000 people work for UPS and they voted to go on strike August 1st if their demands for wage increases are not met. They point out the workers there that they were the ones that kept working throughout all the dangerous months of the pandemic. They brought the packages which we did not go to the stores to buy because it was too dangerous. They worked extra, they worked hard. The company made enormous profits. An increase of 70% in their profits between 2019 and and 2022. But they didn't share it with their workers. When do employers do that, after all? Unless they're forced? And by what? By the threat of a strike or the strike itself. The CEO at ups, just so you know, Carol Thome is paid more in a day than the average UPS worker gets in a year. Her salary in 2022, her payments $19 million. But when it comes to sharing the profits of the company with the workers who make it tick, oh no, then there are problems. Here's the third story. This one is about the negotiations and the settlement between the public employees in Germany. Two and a half million of them. Their union or actually unions. But the most important is called Ver Die negotiated a new contract with the government. And one of the things that the union demanded was an increase in wages. But also help in dealing with the pandemic they went through and with the inflation. And let me remind everyone, the inflation in Europe today is twice what it is here in this country. And they got a very good settlement. Number one, every worker gets a bonus of $3,500 to help them with the inflation. On top of that, every worker will get €200. That's about 240 bucks more per month and a 5.5% increase. This is way better than American workers get. That has to be understood. And in Germany, unlike the United States, public employees have the right to strike. And striking is what they did all over the place the last six months. And that's why they got this contract. The leader of the union made an announcement thanking the workers for their willingness and steadfastness to go out on strike, because in the words of that leader, without that, this kind of a settlement would never have been available to the 2 1/2 million German public employees that are the beneficiaries of that strategy. Last I want to talk about a remarkable strike. Three days, July 2 to July 4, in Los Angeles on the part of hotel workers. You know, the people who clean and prepare and cook and do all the other functions that make hotels in general work and that make hotels a very important part, part of the economic foundation of big cities like Los Angeles. Hotel workers unionized under the UNITE Here umbrella are doing pretty well by comparison to hotel workers that are without a union. In many other parts of the country, their average pay is between 20 and $28 an hour. However, the research shows that if you want to live in the Los Angeles or Long beach areas, you need to earn double that $40 an hour if you're going to be able to afford a two bedroom apartment. In other words, if you have a family, if you want to maintain a reasonable household, not elegant, not luxurious, just the basics so that the workers there have been unable to afford housing. So where do the hotel workers live? 20, 30 miles away. Only there can they afford the housing, and so they go there. But that requires many more hours of the day and the week because you have to add the hours of commuting to the time you're getting paid. And not only are you not paid for the commuting, but the commuting costs you money and therefore eats into what's left of the wages that you do earn. This is a common problem, but the difference is the workers there and their union were determined to change that situation. And so they've demanded an immediate increase of $5 an hour. So we're talking 20, 25% here and then two or three years of an additional $3 an hour, $3 an hour and so on, ending up with a increase, if my numbers are correct, of about $11 on a base of 20 to 28. Yeah, that's the kind of increase that you need. And remember, hotel workers had to live through and work through the pandemic and, yeah, they've had to live through and work through the inflation. And those have been difficult. And the hotels are claiming, of course, that they can't afford it. An argument that looks kind of silly. So since the largest hotel in Los Angeles, the Westin Bonafontura, if I've understood the name correctly, the largest hotel in Los Angeles has already agreed with these union demands. So it's all the rest of the hotels that are making the argument that they can't afford it. Here's the bottom line. Working people have had it. They have been abused. They have been unfairly treated. They have been denied a participation in the growing productivity of labor. They have been told during the pandemic how essential they were. They got awards, they got words, but they didn't get the money that they need and that their labor and their labor through the pandemic deserves. And then getting hit with the inflation and now the rising interest rates, of course they're upset and angry. For many American workers, justifiably upset and angry at their squeezed economic problems. They have nowhere to go. They are alone. They. They are isolated. The vast majority of American workers cannot turn to a union in order to conduct a campaign to improve their economic situation because they aren't represented by a union. If you take the private sector, where most American workers work, in the private sector, 6% of workers are represented by a union. 94% don't. But the 6% who have a union have been using the union. And those who don't have a union have begun to learn they need one. They need one for daily survival, to have the kind of chance at a decent life they were led to believe was somehow theirs by being American citizens. The way you get the American dream is to learn that you need a union if you're working. And without one, you are not going to make it if your goal is to live the kind of life you, your family and your community deserve. We've come to the end of the first half of today's economic update. Stay with us. We'll be right back with the second half. Welcome back, friends, to the second half of today's economic update. I want to focus on two important issues in this second half of the program. The first has to do with the market, this institution that we have, that our political, economic, media, academic leaders keep referring to as if it were magic, as if it were miraculous. As if the market is somehow the best institution one could imagine. That is a win win for everybody. This was never true. It isn't true now. But beyond saying that in a general way, I wanted to give you two concrete examples. In the first, markets were so troubling that the President of the United States said, I don't want to use the market anymore. I'm going to distribute things to our population. I'm going to move goods from the producer to the consumer, but not by means of markets and market exchange. I want you to know that story. I've told it before and so I'm going to be brief now. But that's an example of when the market was clearly understood by, by American leaders to be an institution we don't want. And the second example is housing in the United States, where we do allow the market to function, but the results are something most of us don't want. And that's another critique of markets that we ought to keep in mind. So first, a brief summary of the story of setting aside markets. It's early in the 1940s, the United States is going to war. World War II, the President Franklin Delano Roosevelt. The decision to go to war meant in the United States that resources, land, factories, machines, railroad stock, all the equipment needed to produce goods and services was now going to be changed. A huge part of it was, was going to produce for the waruniforms, guns, bullets, planes, ships, leaving only a portion left to produce consumer goods, food, clothing, housing and so on. And the President was advised correctly that there's going to be a problem if you suddenly cut the amount of consumer goods that are available to the population which wants to consume. There's going to be competition, struggle among the people who want to consume stuff because there's so much less stuff being produced for the consumer. If you let the market work. What's going to happen is rich people are going to bid up the price of scarce consumer goods because they can afford to buy them. Poor and middle class people are going to will be unable to afford them. The rich person will bid up the price of milk that he or she wants to feed to their pet cat. But the middle and lower income people will not be able to buy the milk at that higher price which they needed to feed their babies. You're going to have a population bitterly divided between rich and poor because that's how markets work. Markets are institutions that when there's something scarce, whatever it is, those with money bid up its price to get it, and they do. And those without money cannot afford it. Markets favor rich people over poor and middle income people. And to have the society split that way would be very bad for the war effort. The President figured out we need a unified country to fight World War II. Not one in which middle and lower income people are bitter about what they can't afford while they watch the rich buying everything they can think of. It shouldn't be too hard for you to understand. The United States is rather like that now anyway, isn't it? And so Franklin Roosevelt said, we can't have a market. We cannot let a market function so that the prices of our scarce consumer goods go only up and therefore only to the rich. So here's what he markets are gone. Rich person can offer the moon in prices for a quart of milk. Ain't gonna get it. The only way you get a quart of milk is if you have a ration ticket. A ticket produced by the government and distributed to the population according to its needs. It if you have young children, you get more tickets for milk. If you're an elderly couple, you don't doesn't matter how much money you have. Milk was sold if you had a ticket and not sold if you didn't. The market was set aside. I'm not talking about Russia, I'm not talking about a hypothetical. I'm simply reminding us of our own history. Now let me turn to a case where we do allow the market to work and let's see what happens. Housing, houses, apartments, we allow the price of them to be determined by the market. So let's see what we have wealthy people in our society because we live in an economy that gives some people millions and millions of dollars a year for their labor and other people next to nothing. Our minimum wage is $7 and 25 cents an hour. In the United States, nobody's going to get rich or anywhere near it on that. So we have rich and poor, which means the rich people decide where they want to live. For example, in a beautiful city by the water, in a beautiful region of the country, in a beautiful neighborhood within a city. They go there and they want the apartment or they want the house. And because they're rich, they bid up the price. After a while, nobody else can afford a house there or an apartment there and they have to live somewhere else. And so we get a stratified housing. Rich people always live together in a certain place. I don't have to tell you that. You know that if you're an American, you've seen it a million times in your town, in the town next door. In the bigger cities everywhere. We know the regions where the people with money live. We know the neighborhoods where the people with money live. If the people with money decide to move, they go into a new neighborhood and they bid up the price as they buy the apartments, buy the houses. Middle class people have to leave. We have a name for that, gentrification. It's a name when the price of housing, homes or apartments keeps being bid up by the richer ones, forcing everybody else out. And as the rich take over, they force the middle to leave. And what does the middle do? It does the same thing into the poorer neighborhoods. And so what happens to the poorer neighborhoods? They become, yeah, the homeless people because they can't afford an apartment at all. So we get a stratified. The rich neighborhoods, we know where they are. The middle neighborhoods, we know where they are. And the poor neighborhoods and then where the homeless have to go. This is the way the market works. What is scarce, the beautiful neighborhood, the beautiful city, the beautiful region, the desirable one, whether it's a matter of beauty or not. Some people just want to live where the other people are. Rich like them. We know the stories. But I want you to understand it's allowing housing to be governed by the market. The market allocates whatever is scarce to those with the most money. I hope some of you understand with me that it might be a lot better for everyone if our cities were mixtures. High income, low income, middle income. Why should we have segregated cities, which is what we do? Segregated neighborhoods, not necessarily segregated by race. But of course, since we pay white people in this country more, since we pay men more, then the people who aren't men or aren't white are going to be layered down because they are not in the position to afford to live in those cities. Young people coming up can't live where they might wish to because they can't afford it. We have created a segregated system and it's just as bad if it's segregated economically as if it were any different from segregating things racially or by gender or in any other way. If we don't want gentrification, if we don't want those arid neighborhoods where rich people never go out in the street versus the much more lively, often middle income and lower income neighborhoods. If we don't want all of the tension, the envy, the bitterness, and we know where it goes, right? In the rich neighborhood, where the rich people go, they have the money to influence the local politicians so the garbage is picked up better and sooner and quicker and more often, and so on and so on. The schools are better, taken care of, the streets are cleaned better. We know where the rich people live because you feel it the minute you enter the area. And you know when you're not there for the same reason. So the whole system gets segregated, layered by income. Of course, this wouldn't happen if we didn't pay some people enormous amounts and other people next to nothing. If we were much more egalitarian. Liberty, equality and fraternity being the slogans of our revolutionary time. If we had stuck to that, which we never did, we wouldn't have this problem in the first place. But if you give people unequal amounts of money and you allow the inequality to build over time, and then you say, let the market determine our housing, then you get the segregated income based economic segregation that characterizes the cities, the towns, and the housing we all live in. Here's an example then, of allowing the market to distribute housing, the market to distribute where you want to live. Who's going to get access to this land, to that river, to this scenery? Well, then you're going to get a terrible outcome in terms of a divided, bitter, envious system. That's what we got. Letting the market do its work produces a very bad outcome when it comes to housing. My final topic is an old one. It's called in most human history, the debate, the struggle between reform and revolution. Here's the idea. If you think a system isn't working real well, you got kind of two ways to go. Number one, fix it. And there the word is reform. Pass another law, change a regulation, vote out one party, vote in another party. These are reforms. The alternative is to say no, we're beyond that. We need to change the system top to bottom. We need a big change, a revolution. You know, before the American Revolution, all kinds of reforms were pushed for by people. Before the French Revolution, same thing. The problem with the reform is that it fixes the edges of a system, but it leaves the basic system untouched. We did many reforms in this country in the Great depression of the 1930s, the Bank act, the Social Security system, unemployment insurance, government jobs. We made big reforms. But here's what we didn't do. We didn't change the basic way we organize our productive economic system. A small group of people at the top, boards of directors, owners, the people who run business, tiny percentage of our people and the mass of those who do the work. If you leave it that way, if you only fix it, but you leave it that way, you create the incentive for the people at the top, to use their powerful position at the top, to use the profits that flow into their hands in a capitalist system. So that gives them the incentive and the means. You know what they'll do? They'll undo the reforms. The last 75 years have been an American history of undoing the reforms that were achieved in the 1930s. So I ask you, faced with the failures of capitalism in the world today, including in the United States, are we going to make reforms again, or are we going to finally recognize we have to do something about that basic core of the system, the employer employee relationship? That's got to change. We've got to democratize the enterprise, because otherwise, we're not going to fix the system that ails us. Thank you for your attention. And as always, I look forward to speaking with you again next week.