Andy Schmookler: Working Americans are getting short end of stick
Let me begin by citing a few facts to substantiate a statement I made in a previous column: i.e. that the share of our national income going to the wages of average Americans is at a historic low, while the share going to corporate profits is at a historic high.
The U.S. Department of Commerce, the New York Times reported, gathered data a few years back that showed that corporate profits “are at their highest level in 85 years.”
(Moreover, the corporations have been able to keep more of their profits, because the effective corporate tax rate – what corporations actually paid, after making use of the loopholes in the tax code — was the lowest it has been since 1931. And this was true even before the passage of the recent tax bill, giving still more tax relief to corporations.)
Meanwhile, according to that same report, the percentage of the American economy going to “total wages and salaries” was “lower than in any year previously measured.”
This drop in the share going to American workers, it was reported in 2016, was such that had workers maintained the share of national income (GDP) they’d been paid in the early 1970s, the average American household would have an additional $13,500 in income.
(How much of the strain on American families, I wonder, would be eased by that additional $13,500?)
In other words, as the American economy has continued to grow, this rising tide has not lifted all boats equally. The share going to average Americans has declined, while the wealth going to the economic giants who dominate our economic landscape has increased.
All this shows how the gap of inequality between the richest and the rest has become wider than has been seen in America in living memory.
(Back in the 1950s, while America was attempting to spread democratic governance around the world, it was widely understood that such vast inequalities of wealth created a barrier to a healthy democracy.)
It is in that context that we should consider a decision the Supreme Court recently handed down.
The court just decided that when employees sign a compulsory arbitration agreement, they give up their right to sue an employer who stiffs them. (Those compulsory arbitration agreements are pretty much all over the place – not just for workers, but for consumers as well.) To get the job, the worker must sign.
There are two reasons these agreements strongly favor the company over the workers, i.e., the stronger party over the weaker.
First, the arbitrators have an ongoing relationship with the companies but only a one-time relationship with any individual with a complaint that the company has wronged them. The judge is, in effect, the boss’ friend.
But second, and more important, these agreements block individuals who have been similarly wronged from banding together to bring a class-action lawsuit. Each plaintiff must confront a corporate giant by him or herself.
By depriving workers – and consumers – from gaining strength in numbers, these compulsory arbitration agreements dramatically stack the deck against the single, solitary individual. Which, of course, is why the companies require their employees to sign these arbitration agreements.
Workers challenged these agreements in the courts, saying the agreements violate worker rights, guaranteed by the National Labor Relations Act (NLRA), to join forces in “mutual aid and protection.”
But the court sided with the companies, putting the arbitration agreements companies require ahead of those worker rights granted by the NLRA.
Justice Ginsburg wrote, in her powerful dissent: “Employees’ rights to band together to meet their employers’ superior strength would be worth precious little if employers could condition employment on workers signing away those rights.”
This close, 5-4 decision by the court provides a good illustration of another point I made in a previous column.
In a piece titled “Conning the Many, Serving the Few,” I wrote that while Trump voters have celebrated the appointment of Neil Gorsuch to the Supreme Court, the lives of many of those people, and the lives of their children, will be made harder by that appointment. I wrote:
“On matters that do not affect the interests of America’s corporate system – like the culture war issues of gay rights and abortion – Gorsuch will give the Republican base what they hoped for. But on all those issues on which the rights and powers of average people are pitted against the powers that dominate the American economy (and that increasingly dominate the American government), Gorsuch will almost surely side regularly against the little guy and for the mighty.”
In this case where corporations won at the expense of workers, Gorsuch cast the deciding vote. And it was Gorsuch who wrote the majority opinion.
It seems clear, moreover, that if Merrick Garland – President Obama’s nominee for that seat – had been confirmed (as would have happened at any other time in American history), it is the workers’ rights that would have prevailed.
So it seems that millions of average Americans who “succeeded” in getting “their” guys (Trump and Gorsuch) into power, have been weakened by their “success.”
When we look at how the wealthy few have gained not only a larger share of our national wealth, but also more political and legal power to gain still more wealth, their opening the door for money to sway elections has been one important way.
But another essential part of the strategy has been using the power of money – in generating and disseminating propaganda to the public – to persuade people to support the very people who take both money and power away from them.
Andy Schmookler – a prize-winning author who was the Democratic nominee for Congress in Virginia’s 6th District – has written most recently a series titled “Press the Battle: Fighting for the Soul of America(ns),” at http://abetterhumanstory.org/press-the-battle.