Lessons for Labor Day

By Katrina Vanden Heuvel
The Nation

Friday 01 September 2006

CEO's in the oil and defense industries are making out like profiteering bandits. Wages for American workers are declining while their productivity is rising. Recent polls show that workers feel pessimistic about their economic prospects. And a new US Census Report reveals growing poverty, especially among children.

Happy Labor Day.

The 13th annual "Executive Excess" report from the Institute of Policy Studies (IPS) and United for a Fair Economy indicates that "the CEO's at the top 34 military contractors have enjoyed average paychecks that are double the compensation they received in the four years leading up to 9/11."

George David, CEO of United Technologies - the maker of the Black Hawk helicopter - pocketed $200 million since 9/11, explaining, "Obviously, military was a big bang for us in the post-September 11 period." UTC is currently suing the Pentagon to stop the release of documents pertaining to Black Hawk quality-control problems.

These 34 defense CEO's have been paid nearly $1 billion since 9/11. As soldiers have made the ultimate sacrifice for our nation, the average army private earns $25,000 per year while the average defense CEO makes $7.7 million.

As IPS's Sarah Anderson writes, "Imagine how it must feel to be risking your life every day on the front lines in Iraq, knowing that military contractors are getting grotesquely rich in the comfort of their executive suites? No wonder we're seeing the US Marine Corps having to force their reservists back to the battlefield."

Derrick Jackson of the Boston Globe concludes, "There is no evidence of a [defense] contractor having a soul in the 13th annual Executive Excess CEO survey...."

The oil barons are also enjoying the spoils of our energy crisis. Last year they averaged $32.7 million in compensation, 518 times more than the average oil worker. Chuck Collins and Eric Benjamin write, "Big Oil CEO's should be held to account for their failure to dedicate their mountains of excess cash toward seeking new energy sources that move us beyond fossil fuels."

But the fact is that what is happening in the numb-to-greed defense and oil industries is not dissimilar to the rest of our economy. According to the Washington Post, "the top fifth of American households received 50.4 percent of all income last year, the highest proportion since 1967, when the census bureau started following that trend. The biggest gains were concentrated in the top five percent."

Steven Greenhouse and David Leonhardt write in the New York Times that "wages and salaries now make up the lowest share of the nation's gross domestic product since the government began recording the data in 1947, while corporate profits have climbed to their highest share since the 1960's."

According to Greenhouse and Leonhardt, the median hourly wage since 2003 - adjusted for inflation - has declined 2 percent since 2003 while productivity "has risen steadily over the same period." Moreover, as Paul Krugman points out in an op-ed, "The most crucial benefit, employment-based health insurance, has been in rapid decline since 2000." In fact, according to the Center for American Progress, "the number of people living in the United States without medical insurance rose 2 percent-1.3 million-to a record 46.6 million over the last year alone as health-care costs climbed three times as fast as wages.

Jared Bernstein, of the Economic Policy Institute, told the Times, "If I had to sum it up, it comes down to bargaining power and the lack of ability of many in the work force to claim their fair share of growth.

Nevertheless, George Bush claimed this month, "Things are good for American workers." According to the polls, American workers disagree.

An "overwhelming majority" of adults feel workers have "less job security... than 20 to 30 years ago." A majority feel their incomes are lagging behind inflation. And more than twice as many people feel the economy will worsen next year than believe it will improve.

As AFL-CIO president, John Sweeney, told the Times, "Economic trends have strained working families to the breaking point. Workers are not sharing in the wealth they helped create, and our nation's economic recovery has not been a recovery for workers at all."

Anna Burger of Change to Win added, "These [poll] results tell us that five years into an economic recovery working families are feeling battered and are losing hope for the future."

This week's US Census Report suggests that the American people's perceptions are far more accurate than the galling assertions of the man who would be Hereditary King. In the nation's capital itself, poverty rose in 2005 by more than 10,000 people last year to 104,000. And 1 out of 3 children in the Compassionate President's city now lives in poverty.

According to Krugman, the Census Report indicates "that in 2005, four years into the economic expansion, the percentage of Americans with private insurance of any kind reached its lowest level since 1987."

Our nation has seen some miserable times when it comes to numbness to greed, and we are in another such period now. The question is: what to do?

The civilizing advances in our country, when it comes to working people - child labor laws, collective bargaining rights, Social Security, Medicare, decent and secure pensions, Head Start... all of these were fought for by movements, and then advanced by progressive legislators.

Krugman reaches a similar conclusion, writing that current times call for "a smart, bold populism. All we need now are some smart, bold populist politicians." I'd argue that to fight for shared prosperity isn't really that bold these days-it's really about rebuilding America and its social contract.

So, on this Labor Day 2006, let's support policies and ideas that will make this economy work for those who have helped create this country's wealth. For a start: Stop the assault on labor and strengthen collective bargaining. Then, let's pass universal health care and a living wage, craft trade and industrial policies that create jobs and restore workers' rights, and rebuild our ravaged pension system. These are just a few steps toward a more humane, decent and rational system that would fulfill America's promise.

While too many "New" Democrats have forgotten how to stand up for the working class, there are still enough that this November taking back Congress will mean taking back our country from the GOP's callous policies that have sped the decline of workers in America.