In the United States, the battles over state budgets continue. Governor Scott Walker claims that his state is at the edge of a financial abyss. And -- even though the state's public employees have offered large financial concessions in an effort to reduce the state's deficit -- the real fight is about removing their right to bargain. Some basic arithmetic provides a little perspective. As Robert Reich points out:
Before Wisconsin’s budget went bust, Governor Walker signed $117 million in corporate tax breaks. Wisconsin’s immediate budget shortfall is $137 million. That’s his pretext for socking it to Wisconsin’s public unions.
This fight isn't about the budget. It's about power. While it is true that the Wagner Act of 1935 did not allow the formation of public unions, it did give unions legitimate legal status. Before 1935, unionization met the legal definition of a "conspiracy." Franklin Roosevelt supported private sector unions as a legitimate countervailing force against the concentration of wealth and power which had led to the Great Depression. Unions were a way to force money down the social ladder instead of allowing the wealthy to simply suck it to the top of the pyramid. For this, and several other reasons, Roosevelt was branded a traitor to his class.
Kevin Drum, in Mother Jones, provides an interesting analysis of what has happened since 1935. In the 1940's and 50's, unions were responsible for the prosperity of the middle class. But, beginning in the 1960's, politicians of both parties -- Democrats as well as Republicans -- began to abandon the working class. Democrats, whose traditional power base was Labour, fought for Civil Rights and against the Vietnam War. But economic justice slipped from their radar screens.
Many people forget that, when Marin Luther King was assassinated, he was leading a strike of garbage workers in Memphis. While it was true that the overwhelming majority of those workers were African Americans, King was not fighting segregation. The Civil Rights and the Voting Rights Acts had been passed. What King wanted was economic justice. "Many white Americans of good will," King said, "have never connected bigotry with economic exploitation. They have deplored prejudice but tolerated or ignored economic injustice." When King died, his fight for economic justice died with him.
Since then, Drum writes, working class wages have stagnated to the point where now:
The entire bottom 80 percent now loses a collective $743 billion each year, thanks to the cumulative effect of slow wage growth. Conversely, the top 1 percent gains $673 billion. That's a pretty close match. Basically, the money gained by the top 1 percent seems to have come almost entirely from the bottom 80 percent.
The fight in Wisconsin has been thirty years in the making. Governor Walker says his state can no longer afford the outrageous demands of public sector workers. But, given the fact that his newly minted tax cuts would just about cover the budget deficit, it would appear that the governor's rhetoric is a smoke screen.
This fight is about undoing the countervailing measures Roosevelt set up in the Wagner Act. Paul Krugman is right. It is about entrenching an oligarchy.
This entry is cross posted at The Moderate Voice.