The folk singer Charlie King wrote a song “Bring Back the Eight Hour Day” Listening to it got me thinking about why US Workers Are Overworked and Underpaid.
US Companies don’t like to add fulltime employees to their payrolls because in addition to paying for their work you have to provide a benefit package. Since we don’t have universal health care that usually includes health insurance which is expensive, so they have various strategies to avoid doing so.
At Walmart instead of creating one full time job with good pay and benefits they create two or more part time jobs with low pay and few benefits. Half of Walmart’s employees are paid so little they qualify for Food Stamps and Medicaid. Who pays for Food Stamps and Medicaid? You do! The American taxpayers.
Americans for Tax Fairness has calculated that this costs US Taxpayers $6.2 Billion a year. Walmart’s profit is about $13 Billion a year so about half of the money going to the richest family in the country came not from selling cheap goods but from paying cheap wages.
Another strategy is to get your full-time workers to work overtime so you don't have to hire more people. For hourly workers this is called mandatory overtime; for salaried workers it is often done by implying that to get ahead you have to show special dedication to the job. In 1994 at the GM plant in Flint Michigan this was carried so far that, as Charlie King describes in verse 4 of his song, “Half the town works 60 hours a week while the other half rots on the dole.” The workers complained to the union that the extra money was nice but they were getting home so late and so tired they had no time to spend it or to spend with their families. The union suggested to GM that if they had this much work they should put on a third shift. GM said NO! the union said STRIKE! But that plant, in addition to assembling automobiles, manufactured parts used on other assembly lines. On day 1 the Flint plant shut down. On day 2 two other assembly lines shut down for lack of parts and on day 3 the company, realizing that the strike had already cost them $300 million, gave in and started hiring almost 800 workers for the third shift, most of them people who had worked for GM previously but had been laid off when business slowed.
Charlie King’s song describes it this way.
Well, did you know that the workers in Flint
Went on strike to climb out of this hole?
Where half the town works sixty hours a week
While the other half rots on the dole?
What good is a double-time check
When your town and your family is shot?
We need some enjoyment;
We want full employment.
We will not be bullied or bought.
In the US a 40 hour week with two weeks of paid vacation is customary but it is only custom, not law. According to a 2013 report by the Center for Economic Policy and Research the average private sector U.S. worker receives 16 paid vacation days and holidays. One in four Americans, mostly low paid workers, do not have a single paid day off. Contrast this to Germany where, by law, workers get a minimum of four weeks paid vacation plus 13 paid holidays each year. Every country in the European Common Market guarantees its workers at least four weeks of paid vacation plus a number of paid holidays. Most also get paid sick leave, paid maternity leave and other benefits. Five countries even mandate that employers pay vacationing workers a small premium above their standard pay in order to help with vacation-related expenses,
When the 2008 recession hit many German companies instead of laying off some of their workers reduced everyone’s hours. Everyone shared the pain but no one was out in the cold living on unemployment while looking for a job in a bleak job market. Moreover most workers could get partial unemployment benefits through a Work-Share plan. Germany encourages employers to reduce workers' hours rather than lay them off. The result is that many workers are putting in fewer hours, but still have jobs in Germany. The government makes up for most of the lost pay with money that would otherwise have gone to unemployment benefits. 17 US states have similar benefit programs but they are not widely used.
Why are they so different from us? For one thing most of them believe that a worker who is rested and has a comfortable lifestyle is more productive than someone who comes to work tired from working two jobs and stressed out wondering how he will pay his mortgage this month.
Another reason is that their governments are still putting the needs of people ahead of the needs of business. We used to be the same but in the past 40 years our government has become more concerned about companies than people. “Raise the minimum wage? That will hurt the economy.” “Pipelines vs people? Dig baby dig.” “Do something about Global Warming? That will hurt the coal and oil industries.”
This did not happen accidentally. In 1971 a group of businessmen at the US Chamber of Commerce became worried that the country was becoming “anti-business.” Lewis Powell, who shortly afterwards was promoted to the Supreme Court wrote a plan for making the government more pro-business.
Powell called for forming groups of scholars, writers, and speakers who would promote pro-business ideas through academic publishing, advertising, and lobbying. The memo inspired the creation of conservative think-tanks like the Heritage Foundation, the Manhattan Institute, the Cato Institute, Citizens for a Sound Economy, Accuracy in Academe, and other powerful organizations.
His free-market utopian treatise called for a money fueled big business makeover of government through corporate control of the media, academia, the pulpit, arts and sciences and destruction of consumer protection groups. But Powell’s real “end game” was business control of law and politics, leading to the infamous Citizens United Case that concluded that corporations could spend unlimited amounts funding independent expenditures on behalf of political candidates."
Some have called this legalized bribery.
Powell’s plan was to turn our democracy into a plutocracy. And it is working.
The result is shown in the graph at the head of this article, “The Picket Fence and the Stairway.” From 1947 to 1979 we had a highly progressive tax code, strong unions, good government oversight of business, and good programs to help people and as the cost of living went up all American incomes went up more or less equally. From 1980 to 2009 we cut the top tax brackets, destroyed the unions, told the regulators not to regulate, and cut back on programs to help people. As a result wages at the bottom and middle of the economy stagnated while the income of the top 1% skyrocketed.
It is time for us to wake up and start working to reverse this dangerous plan.
Thursday, Oct 26, 2017 · 9:28:49 AM +00:00 · DaveStump
Update: In response to comments I made two corrections: 1) corrected the spelling of "Louis" Powell to Lewis Powell; 2) Corrected the effect of the Citizens United case from "corporations could give unlimited amounts of money to political campaigns." to "corporations, unions and other organized groups, could spend unlimited amounts funding independent expenditures on behalf of political candidates."
One comment asked about the source of the graph, "The Picket Fence and the Staircase." I first saw it in an April 2012 New Yorker article by John Cassidy. The version I have used was probably derived from Cassidy's article but is visually more pleasing to my eye. Unfortunately while I saved the image I did not save the source citation and am unable to find it at this time. I believe that I added the line for the top 1% and the breakdown of the quintile brackets which were, I believe, in the acompaning article. If I have violated anyone's copyright I apologize. I will write to Mr.Cassidy to see what he can add to this.
I would also recommend the Comment made by NM Ray on Oct 19 at 10:29:45 AM referencing FDR's proposed Economic Bill of Rights.
Finally I note that this article generated a large number of comments regarding labor unions many of which might be of interest to people concerned about that issue.