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Krugman: Employee Free Choice Key to Economic Recovery
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In the latest issue of Rolling Stone, Nobel Prize-winning Princeton economist Paul Krugman has written an open letter to President Obama detailing the steps needed to end our economic crisis and turn the country around.
Krugman’s prescription includes quick and large-scale actions to save jobs, rebuild infrastructure and protect those whose health care, housing and retirement have been put at risk—but it also includes longer-term strategies to make sure America is “a more just and secure society.” High on Krugman’s list? In addition to health care reform and an economic recovery package, he stresses restoring workers’ freedom to form unions and bargain for a better life by passing the Employee Free Choice Act.
…you can do a lot to enhance workers’ rights. One is to start laying the groundwork to pass the Employee Free Choice Act, which would make it much harder for employers to intimidate workers who want to join a union…the legislation will enable America to take a huge step toward recapturing the middle-class society we’ve lost.
Krugman looks at another time when the United States and the world faced a serious threat to economic prosperity—the Great Depression—and says one of the most important factors to help the economy rise out of the Depression and into growth was what he describes as the “Great Compression”—the change from an unequal and economically divided society, rife with poverty, to a strong middle-class society. The ability of workers to form unions and bargain, made real by reforms to labor law, pulled the economy into prosperity:
…one important factor was the rise of organized labor: Union membership tripled between 1935 and 1945. Unions not only negotiated better wages for their own members, they also enhanced the bargaining power of workers throughout the economy. At the time, conservatives warned that wage gains would have disastrous economic effects—that the rise of unions would cripple employment and economic growth. But in fact, the Great Compression was followed by the great postwar boom, which doubled American living standards over the course of a generation.
As we’ve stated before, the economy is reeling from inter-related crises in housing, credit, manufacturing and health care, and one of the big factors fueling the nation’s economic crisis is the fact that workers have lost power in the workplace and have fallen behind as a result. Krugman, an economist respected around the world, recognizes that restoring balance to the economy will depend upon restoring power to workers.
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9 Comments
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Krugman is right on, as usual. I want to place more emphasis on AFFORDABLE CO-OP HOUSING. We need to build housing which is not subject to crazy price bubbles and collapses. Affordable co-op housing controls the price at which a member-owner can sell his home when he wishes to move away. Affordable housing cooperatives are successful. We need more.
“Union membership tripled between 1935 and 1945. Unions not only negotiated better wages for their own members, they also enhanced the bargaining power of workers throughout the economy.”
The period just after WWII that lasted until about 1970 can never be revisited. In this period, when returning GIs received the GI bill to pay for a college education, when homes were affordable, when jobs paid more than just a “living wage” but allowed for paid vacations, health insurance, etc. was rally the high point of U.S. capitalism. as far as working people are concerned. The rest of the world was devastated by world war.
U.S. employers could pay for all the benefits that went with the job. The health care system was privatized then and investor profits were generated by the health insurance plans of millions of well-paid workers.
Since about the 1970s the decline in U.S. capitalism became evident. Wages for working people have actually declined over the last 30 years and not kept up with inflation. As far as most working people are concerned the U.S. is becoming a “third world” country, with a tiny elite of millionaires and billionaires,
and the rest forever in debt, millions without health insurance, having to have two incomes for family survival. Why is our public school system being destroyed? etc.
Why has U.S. capitalism declined? How has U.S. capitalism changed so profoundly? What must working people and the labor movement to go meet the new conditions that are impoverishing us all?
1. The philosophy of the trade movement has been a “business partner of capitalism”. The main way unions have organized has been to organize at existing corporations. By threatening the strike if demands were not met, some unions were able to make demands that corporations thought they could meet over time.
The unions delivered discipline of the work force, worked to prevent wild cat strikes, etc.
2. Capitalist globalization has essentially destroyed this “business partner” relationship. Companies, especially in manufacturing and labor intensive industry, found they could no longer compete. Labor and other benefit costs typical of U.S. workers minimized and eliminated profit. Thus millions of jobs have left the U.S.
3. Capitalist globalization is also affecting workers throughout the world as capitalists in other countries (Europe, etc.) have also realized they can make more money elsewhere even if products had to be shipped back to the home country. Also companies have cut back on vacations, employer benefits were possible and made these nationalized benefits with universal health care, national child care, etc.
4. But here in the U.S. the labor movement continues to maintain the myth that all is need is to give money (billions and possibly trillions of public money) to the capitalists (banks, auto maker owners, etc.) with the hope that some of this money will “trickle” won to the employees that are lucky enough to get a job.
5. U.A.W. organized workers have been massively fired, factories closed, and existing workers have had to take huge wage cuts, their pension plan now is now administered by VEBA
etc. etc.
6. Working people and the organized labor movement has once again endorsed the Democratic Party, hoping that the EFCA act will pass, hoping that it will make a difference. Again this ACT
assumes that that any business that labor attempts to organize will stick around to endure the organizational effort. It can only agree to terms that make it competitive with every other company in it’s industry, most of which are probably unorganized.
THE IRON LAW OF CAPITALISM IS ALWAYS TO MAXIMIZE PROFIT. CAPITAL WILL ALWAYS SHUT DOWN IF PROFITS ARE MINIMIZED SO THAT THE INVESTORS WILL NOT LONGER INVEST. CAPITAL DOESN’T CARE HOW IT MAXIMIZES PROFIT. THE HUMAN BEINGS INVOLVED AS EMPLOYEES ARE NOTHING BUT HUMAN RESOURCES TO BE USED, USED UP, AND FIRED WHEN CHEAPER LABOR IS ELSE WHERE.
7. What are the needs of working people? Working people need food, clothing, shelter, health care, education for their children, etc. CAPITALISM TODAY IS UNWILLING AND EVEN UNABLE TO PAY FOR ALL THE ESSENTIAL NEEDS OF IT’S OWN EMPLOYEES.
THUS CAPITALISTS HAVE MOVED THEIR INVESTMENT TO UNPRODUCTIVE FINANCIALIZATION. (Stock market, housing finance, etc.) This has been very unregulated, the profits so immense (never possible in labor intensive but productive capitalism), that vast corruption and greed has become the normal means today of capitalists making vast profits.
8. For working people to meet their needs, for the labor movement to represent their needs, THE LABOR MOVEMENT MUST DECLARE IT’S END OF BEING A “BUSINESS PARTNER TO
CAPITALISM”. IT MUST BREAK WITH ALL POLITICIANS AND PARTIES WHO FOREVER SUPPORT THE NEEDS OF CAPITALISTS AND NEVER THE NEEDS OF THE VAST MAJORITY OF HUMAN BEINGS… WORKING PEOPLE.
9. Thus:
1. Break with the Democratic Party. Start a new anti-capitalist socialist political party that would transform the economy to providing for the needs of the people to live, and not to maximize the profit of corporations and individuals already bloated with millions and billions of dollars from “bailouts”, tax breaks, subsidies.etc.
2. Start a new mass media in opposition to the capitalist controlled media to educate, inform and organize all working people as to the needs of the people. Their is no “voice of labor”
ANYWHERE in the mass media.
3. Run supporters of a socialist platform for election at every level of government, local, state, federal. Make teachers, parents and working people head of school boards, city and state government.
4. TO IMPLEMENT FINANCIALLY:
a. END ALL FOREIGN WARS. CUT THE DEFENSE BUDGET BY 50 PERCENT. SHUTDOWN ALL 700 FOREIGN BASES.
b. establish a universal national single-payer health plan for
all humans living in the U.S.
c. massively upgrade public education
d. re-instate taxes on corporations and progressive taxation
on the wealthy.
e. Maintain a protect all programs essential to working people. i.e. SOCIAL SECURITY, MEDICARE, SECTION 8 HOUSING, FOOD STAMPS. ETC.ETC.
f. CREATE MILLIONS OF JOBS IN ESSENTIAL PRODUCTIVE WORK FILLING NEEDS OF SOCIETY FOR INFRASTRUCTURE REPAIR, HOUSING, PUBLIC TRANSPORTATION, NEW ENERGY
SYSTEMS TO ELIMINATE NUCLEAR, FOSSIL FUEL BASED SYSTEMS.
This is what is needed if this country’s working people are to survive.
Well said, Jerry! You might have added one more thing though. If corporations are allowed to continue to hire “Permanent Daily Hire” like myself, then, the “Employee Free Choice Act” will NOT be worth the paper it is wriiten!!! Peace and God bless.
Ron–
Jerry Wells thread-bare arguments for setting up a Communist state are absurd. The state will take over the Unions and everyone will be oppressed. Just as like what happened in the Soviet Union, Red China, Cuba, East Germany, and every other Communist nation.
Communism fails absolutely.
The Employee Free Choice Act is vital to Workers, but if there is a tyrannical government in place, it will mean less than nothing.
Americans need the Employee Free Choice Act. We deserve the right to chose whether or not we want to be able to collectively bargain. We deserve the right to protect our interests, which includes job safety, health care, and a living wage. After all, doesn’t management act in its own best interest? So why not us?
I winder what is so difficult to understand if the working families have money to spend, then the economy problem is solved by new car purchases, etc. etc.
We must remember that the EFCA is an amendment to the National Labor Relations Act, as amended. So, it only covers workers in the private sector and postal workers.
The first point is that it only affects workers in new organizing.
The second point is that it doesn’t delete the secret-ballot language of the act; but rather, adds majority sign-up as another option for the workers involved to consider. A group of workers would be either certified by the secret-ballot vote or by majority sign-up by the NLRB.
It restores the decision to the workers involved.
Krugman is right; the underlying premise to a strong nation is a strong economy. A strong economy depends on two very important elements: jobs (for everyone who wants one), and a fair living wage (one that enables people to pay for what they need and for recreation and leisure as well). The only way we can have fair wages is by bringing back unions so workers can negotiate. Give workers the ability to increase their standard of living.
What is very sad is that there are many in the corporate and political elite class who have come from families that have struggled during the great depression. In fact, no one was immune from this disaster. These people making the decisions to let things continue the way they are should read their history about the causes and effects of the “Great Depression”. FDR had the right vision in fixing that mess, but it took years. The current capitalistic mess began during Reagan, with the new age of deregulation, and a weakened central government. The idea was to let people fend for themselves, and let their employers give them a limited amount of tidbits, at their discretion, for their employees’ survival. THIS DOES NOT WORK. A strong economy, necessary for a strong nation, needs a strong government with a significant and responsible social structure in place. Capitalism can work very well as long as these conditions are implemented as well.
I do not agree with Jerry Wells about making our government socialist, but I do agree with the financial implementation he proposes: that is, we should end foreign wars, shut down the 700 bases and cut the defense budget. We should upgrade public education, tax corporations, no matter where they are located. Reinstate progressive taxation. We MUST have universal health care. We MUST maintain our social programs, such as Social Security. We MUST provide for jobs by bringing the base of our economy back here (manufacturing, infrastructure, renewable energy, transportation, etc.).
There are ways to fix this mess. It can be done with a little bit of insight and a lot of simple common sense.
How many companies that are recipients of Bailout money are using that money to fight the EFCA?