Truthout: The Last Hurdle for Corporate Capitalism: Deunionizing America

March 11, 2011- The campaign to control private-sector union membership has been mostly successful as corporate US capitalism shifted its attention to the last hurdle to a union-free country: public-sector unions. Critical examination of the connection between money and politics is helpful to understand the explosive and sudden attacks on public-sector unions, especially teachers' unions. Public-sector workers and their unions put to shame private-sector compensation and benefits. They represent the last hurdle for the free rein of corporate capitalism over US politics. Workers in the public sector (both federal and state workers) are five times more likely to be unionized than private-sector workers. According to the Bureau of Labor Statistics, about one-third of public-sector workers are represented by unions (36.2 percent). The collective bargaining agreements in the public sector are not a threat per se to the private sector, but they are a threat to the power of corporate lobbying money. What is at stake is the total control by the corporate sector over the US legislative process, especially in the general election of 2012 and afterward. Labor groups are a major funding source in federal and state elections that offset the power of corporate lobbying money. Labor campaign contributions raise the cost of doing business for corporate lobby groups since they need to overbid labor groups' donations. Therefore, if collective bargaining rights, and with that over a 100 years of socioeconomic progress by the labor movement is undone, then the US capitol will be firmly in the pockets of corporate America. The money-politics nexus explains why politicians are in a rush to rein in public-sector unions.

According to data from the Center for Responsive Politics[1], labor interest groups are the fourth-largest campaign contributors in federal elections (the biggest contributors are the finance, insurance and real estate groups at $289 million in 2010 election cycle). Labor campaign contributions are higher than the campaign contributions by the defense industry and only 30 percent less than those from the health industry. Union-related groups are a lobbying power with which to contend; as in the 2010 election cycle, labor and trade union groups contributed about 92 million dollars, primarily to Democrats. A report by Mother's Jones magazine[2] showed that between 1989-2010, labor groups gave $699 million in campaign donations, which makes labor the sixth-largest campaign donor in that time period, with more contributions than the energy and the defense groups. Also, for every dollar in campaign donations given by the health industry and financial interest groups, labor groups gave almost 78 cents and 29 cents, respectively. Labor groups, therefore, have a heavy political weight in elections. Understanding the attack on public workers from that context can best explain the need for US corporate capitalism to have total domination on US upcoming elections and to make it less expensive to do business in Washington, DC. Weakening the power of labor groups will yield more power and influence to US corporate America in shaping the future of US public policy, especially deficit reduction, trade policy, and corporate tax structure. If the power of labor in politics is subdued, corporate America will have free rein over domestic and foreign policies.

The political campaign against teachers can be deciphered by understanding the political power of teachers' unions. Teachers' unions[3] are the largest campaign contributors among the labor groups and among the public-sector employees. In the 2010 elections, teachers' unions gave about $12 million dollars or 41 percent of all public-sector workers' campaign contributions and 13 percent of all the contributions from labor interest groups. As states try to balance the budget, the stakes are high since cutting public spending is preferred to raising tax revenues. As the discussion about balancing the budget moves to the national level, there is a standoff brewing on what is going to shoulder the cost of reducing the federal budget deficit: labor or capital. Increasingly, it appears that labor will stand to lose significantly in terms of pay and benefit. At a time when US corporate income tax burden is about 1 percent of gross domestic product and 7 percent of US government receipts, both a historic low since WWII [4], the media's visceral attacks are on labor groups as the source of budget woes. President Obama's National Commission on Fiscal Responsibility and Reform made proposals that will have labor pay a heavy price on the road to reducing budget deficit. This is perhaps why Republicans are scrambling to curtail or eliminate public-sector collective bargaining rights. What is at stake is not balancing the budget in the next fiscal year, but sealing the fate of the next presidential election and, with it, deciding who will pay the heavy price of fiscal reforms.

After the current economic slump, which was primarily brought about by decisions at the management level in the public and private sector, US corporate capitalism turned its attention to the last bastion of labor power in the US workforce: unionized public workers at the federal and state level. A job in the public sector, especially at the federal level, is the last oasis of job security and income growth for US workers as wage stagnation is a fact in the private sector. Public-sector jobs typically provide better benefits (not necessarily better pay) for the workers. An analysis by the Center on Budget Policy Priorities reveals that public-sector workers are paid more (6 percent more) than their private-sector peers only for those earning in the bottom tenth percentile. But private-sector workers actually earn more than public-sector workers for those earners in the 50th and 90th percentile after accounting for education and experience.[5] As for benefits, the benefits public-sector workers received are suitable for a country that prides itself in being a first-tier economic power and the best nation on earth. Given that the US federal labor law (The Fair Labor Standard Act of 1938 with it amendments) did not give workers the legal right to receive paid or unpaid vacation, the need for labor unions is, therefore, extremely important to offset a weak national labor law.

When corporate-run media perpetuate, on purpose or out of ignorance, misinformation about public-sector pay and benefits, they are, in fact, committing an injustice to the workers who teach our children and workers who put their lives on the line every day to keep us safe in our homes while earning subsistence wages. Traditional journalism venues have long stopped criticizing most corporations, as they have become focused on selling airtime for corporations and using highly paid talking heads who practice entertainment journalism and not critical journalism that is needed for a well-functioning democracy. Instead of calling for lowering public-sector pay, the media and politicians should be inquiring why private-sector pay is low. Instead of raising the bar, they purposefully aim at a lower standard of living for workers by calling for the Wal-Mart standard to be the golden rule for benefits and pay.


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