How do we make this economy work for most Americans? That is the question at the heart of this ad, appearing in The New York Times on September 16, 2008.
The worst financial crisis since the Great Depression has now made the front pages, as fears spread about the possibility of a global recession.
But this immediate crisis was triggered in part by what was happening over the past seven years, when the economy was growing, when Treasury Secretary Henry Paulson was hailing "the strongest global economy I've seen in my business lifetime" when President Bush and, as late as September 15, Sen. John McCain were declaring the "fundamentals of the economy are strong."
Through much of the period from 2000 to 2007, as the economy was growing, profits were up, productivity was up, but the most productive workers in the industrial world, who work the longest hours, didn't see the rewards. In fact, as our fact sheet shows, median household income actually went down $324 in real terms. Something is fundamentally wrong.
But this isn't just a story of one presidential term. Over the last 30 years, conservatives and their ideas dominated Washington. Both parties joined in. Under Reagan and Clinton, banks were deregulated and a casino financial system grew in the shadows. Under Reagan, taxes were lowered on the wealth and raised on work. With the crushing of the air traffic comptrollers union, Reagan declared open season on unions. A thriving industry of firms exists simply to advise companies on how to squelch the first signs of worker organizing. The agencies protecting worker rights on the job were disemboweled. The minimum wage lost value as each attempt to increase it was met with fierce opposition from business. Companies under pressure from speculators and global competitors began shredding the promises once made to workers — cutting health care, abandoning pensions, ignoring rules on hours and overtime. Undocumented workers were easily exploited. Even Microsoft, the most profitable monopoly of the time, resorted to using "permatemps" — permanent temporary workers — to avoid paying folks real time.
For 30 years, in this era of market fundamentalism, the typical household has fallen behind. Two incomes are now needed to provide what one once did. People work longer hours. Under Bush, this all came to a head. The economy thrived, but people did not. Debts rose. Most went without health care. Poverty rose. This cannot go on.
What's needed is a fundamental change of direction. Instead of trickle-down growth, we should be driving the economy from the bottom up. Instead of focusing on freeing up capital and executives, we should be empowering workers. The IAF ad features three fundamental reforms that reflect a growing consensus among progressive economists.
First, empower workers to organize. Unions remain the best way to provide workers with the ability to gain a fair share of the profits they help generate, and to enforce agreements on hours, conditions and treatment. The Employee Free Choice Act gives workers the right to choose how to organize a union — either through by getting a majority to sign membership cards or by holding an election. Since the companies have perfected the techniques of suppressing elections, card check is already spreading, even without a change in the law. The corporate lobby says this allows Big Labor to intimidate workers into joining the union, but the real threat is the systematic abuse by companies of the basic human right to organize.
Second, forge a public social contract to replace the private one that the companies are now shredding. Mandate companies to provide basic health care, contribution to a public pension, paid vacation and sick days, and a decent minimum wage pegged to inflation. These mandates can be phased in over time. But the point is to set, as other industrial countries do, a minimum standard in law so that companies can't compete on the low road by driving wages and conditions to the ditch. This may require a change in America's global strategy — change.
Third, make full employment the stated goal of our economic policies. That must be the objective of the monetary policies of the Federal Reserve as well as the fiscal policies of the administration and Congress. Over the last 30 years, market fundamentalists‚reflecting the priorities of Wall Street's investors — have made inflation the priority, not full employment. But wages rose across the board only‚Äîas in the last years of the Clinton administration — when the economy neared full employment. When jobs are plentiful, workers can negotiate a better deal from their employers because they are better able to abandon a bad deal.
