Bill Totten's Weblog

Wednesday, September 06, 2006

Labor Day?

How About Greed Day?

by Richard Reeves (September 01 2006)

Shouldn't they eliminate Labor Day? Or at least change the name to something like "Profits Day"? "Productivity Day"? "Outsourcing Day"? "Middleman Day"? "Money Manager Day"? How about "Greed Day"?

What does Labor with a capital "L", as in "Organized Labor", have to do with life in these United States of America anymore? In the second half of the 20th century, the percentage of American workers in unions decreased from a third or so of the workforce to maybe ten percent - and most union members now are public employees, particularly schoolteachers and municipal workers.

What does labor with a small "l" have to do with anything? "Workingman", once the symbol of what made America great, is now a synonym for failure. Oh, didn't go to college? Didn't go to business school? Benefits, health care - you're kidding, right? Don't have a reservation? Sorry, your credit card has been rejected? Consolidate your bills? Have you thought of sending your kid to Iraq? How about Iran? How about to the VA hospital? Counseling, maybe?

Them that has, gets. Them that don't have, get labor.

Ironically, as we prepare to honor the cities of big shoulders, the news of last week confirmed what we see all around us. On Monday it was reported by the Department of Commerce and the Bureau of Labor Statistics that for the first time since such records began being kept sixty years ago, that as the productivity of American workers increased these past five years, their real wages declined by two percent relative to inflation since 2003. What really went up were corporate profits and executive bonuses. But the record prosperity of owners and management has generally not been shared by workers.

Many workers have also suffered from decreases or elimination of benefits, particularly the rising cost of health care and health care insurance. For the truly poor - one in five persons in New York City, for instance - it may be relatively worse, as the buying power of the minimum wage has hit a fifty-year low. Other statistical reports indicate that in the first quarter of this year, wages and salaries now make up only about 45 percent of the gross national product, compared with fifty percent in 2001 and 54 percent in 1970. You don't have to be Alan Greenspan to know that workers this Labor Day are getting a smaller piece of the American pie.

It is true that average family income has held its own, relatively, during this time. But most economists attribute those numbers to higher compensation in top-income families and the continuing trend toward more members of working families taking temporary or part-time jobs. So who's getting all the new money? Corporations, executives and shareholders, says UBS, the investment bank: "This is the golden age of profitability".

That's part of it, I'm sure. But a story in The New York Times the day before the wage and productivity numbers were released struck me as another key to understanding the more and more visible inequality in the United States as we celebrate the toil and productivity of working men and women. A long analysis by Gretchen Morgenson may go a long way toward explaining the ever-mushrooming growth in numbers and size of new mansions, obscene wooden temples as tribute to giantism, bad taste and too much money in the golden light of eastern Long Island. The headline read: "Analysis Finds Signs of Abnormal Dealings in 41 percent of Year's Biggest Buyouts".

There are three thoroughfares that can get you to high hedges and circular driveways out here 100 miles east of New York City: the Long Island Railroad, the Long Island Expressway, and the cash pipeline from the investment banks and trading houses of Wall Street. Hiring outside firms to do the numbers for the last year, The Times found: "Of the ninety big mergers in the period, shares of 37 target companies exhibited abnormal trading in the days and weeks before the deals were disclosed".

In other words: insider trading. They used to say that behind every great fortune, there's a crime - maybe behind every killer kitchen and great tan, too. Is it un-American to suspect that it is the money skimmed from the labor of what used to be called the masses that is the driving force of such lavish mansionry in the fields? After all, this is the time to celebrate the sweat and toil of the men and women who are building America - for others. Happy Labor Day!

Content (c) 2006 Richard Reeves.

Bill Totten


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