Saving capitalism, p.28
Saving Capitalism, page 28
The convenient fact: Timothy Curry and Lynn Shibut, “The Cost of the Savings and Loan Crisis: Truth and Consequences,” FDIC Banking Review 13, no. 2 (2000): 26–35 (https://fdic.gov/bank/analytical/banking/2000dec/).
Between 1979 and 1989: Tim Opler and Sheridan Titman, “The Determinants of Leveraged Buyout Activity: Free Cash Flow v. Financial Distress Costs,” Journal of Finance 48, no. 5 (1993): 1985–99 (http://www.jstor.org/stable/2329077?seq=1#page_scan_tab_contents).
The party was temporarily halted: See Jesse Kornbluth, Highly Confident: The Crime and Punishment of Michael Milken (New York: William Morrow, 1992).
“We have one job”: Ian Somerville and D. Quinn Mills, “Leading to a Leaderless World,” Leader to Leader 1999, no. 13 (1999): 30–38 (http://onlinelibrary.wiley.com/doi/10.1002/ltl.40619991307/abstract).
When Jack Welch took the helm of GE: See Jack Welch, Jack: Straight from the Gut (New York: Warner, 2001).
“Chainsaw” Al Dunlap: John Byrne, Chainsaw: The Notorious Career of Al Dunlap in the Era of Profit-at-Any-Price (New York: HarperBusiness, 2003).
When Dunlap moved to Sunbeam: Ibid., pp. 123–24.
the nation’s productivity has risen 65 percent: Josh Bivens, Elise Gould, Lawrence Mishel, and Heidi Shierholz, Raising America’s Pay: Why It’s Our Central Economic Policy Challenge, Briefing Paper #378, Economic Policy Institute website, June 4, 2014 (http://www.epi.org/publication/raising-americas-pay/).
During the Clinton administration: Lawrence Mishel, The Wedges Between Productivity and Median Compensation Growth, Issue Brief #330, Economic Policy Institute website, April 26, 2012 (http://www.epi.org/publication/ib330-productivity-vs-compensation/).
Nearly one out of every five working Americans: U.S. Bureau of Labor Statistics, The Employment Situation—November 2014, U.S. Bureau of Labor Statistics website, December 5, 2014 (http://www.bls.gov/news.release/pdf/empsit.pdf).
By 2014, 66 percent of American workers: American Payroll Association, “2013 Getting Paid in America Survey Results,” 2013 (http://www.nationalpayrollweek.com/documents/2013GettingPaidInAmericaSurveyResults2_JW_001.pdf).
more than 80 percent of large and medium-sized firms: Employee Benefit Research Institute, “EBRI Databook on Employee Benefits,” ch. 4, “Participation in Employee Benefit Programs,” table 4.1a, Employee Benefit Research Institute website, March 2011 (http://www.ebri.org/pdf/publications/books/databook/DB.Chapter%2004.pdf).
Today, a third of all workers: Ruth Helman, Nevin Adams, and Jack VanDerhei, The 2014 Retirement Confidence Survey: Confidence Rebounds—For Those with Retirement Plans, Issue Brief No. 397, Employee Benefit Research Institute website, March 2014, p. 18 (http://www.ebri.org/pdf/surveys/rcs/2014/ebri_ib_397_mar14.rcs.pdf).
the portion of workers with any pension: Rebecca Thiess, The Future of Work: Trends and Challenges for Low-Wage Workers, Briefing Paper #341, Economic Policy Institute website, April 27, 2012 (http://www.epi.org/publication/bp341-future-of-work/).
In MetLife’s 2014 survey: MetLife, Benefits Breakthrough: How Employees and Their Employers Are Navigating an Evolving Environment, 2014 (https://benefittrends.metlife.com/assets/downloads/benefits-breakthrough-summaries-2014.pdf).
the Panel Study of Income Dynamics at the University of Michigan: Jacob S. Hacker, The Great Risk Shift: The New Economic Insecurity and the Decline of the American Dream (New York: Oxford University Press, 2008), p. 31 (https://pages.wustl.edu/files/pages/imce/fazz/ad_11_3_hacker.pdf).
In the 1970s, the typical drop: Ibid.
By the mid-2000s: Ibid., p. 32 (https://pages.wustl.edu/files/pages/imce/fazz/ad_11_3_hacker.pdf).
America’s largest employer was Walmart: Brianna Cardiff-Hicks, Francine Lafontaine, and Kathryn Shaw, “Do Large Modern Retailers Pay Premium Wages?” NBER Working Paper No. 20313, National Bureau of Economic Research website, July 2014, p. 9 (http://www.nber.org/papers/w20313.pdf).
average hourly wage of Walmart workers: Shelly Banjo, “Pay at Wal-Mart: Low at the Checkout But High in the Manager’s Office,” Wall Street Journal, July 23, 2014.
And because more than a third of workers: See David Madland and Keith Miller, “Latest Census Data Underscore How Important Unions Are for the Middle Class,” Center for American Progress Action Fund website, September 17, 2013 (https://www.americanprogressaction.org/issues/labor/news/2014/09/18/97477/new-census-data-once-again-illustrate-importance-of-unions-to-the-middle-class/).
fewer than 7 percent: U.S. Bureau of Labor Statistics, “Union Members Summary,” economic news release, January 24, 2014, p. 1 (http://www.bls.gov/news.release/pdf/union2.pdf).
real average hourly pay in Germany: Leonhardt, “The German Example.” (http://www.nytimes.com/2011/06/08/business/economy/08leonhardt.html)
the percentage of total income going to the top 1 percent: See Anthony B. Atkinson, Thomas Piketty, and Emmanuel Saez, “Top Incomes in the Long Run of History,” Journal of Economic Literature 49, no. 1 (2011): 41–42.
When railroad workers went on strike: See Robert E. Weir, Workers in America (Santa Barbara, CA: ABC-CLIO, 2013), p. 365.
President Grover Cleveland dispatched: U.S. Strike Commission, Report on the Chicago Strike of June–July 1894, 53rd Congress, 3rd sess., Sen. exec. doc. no. 4. (Washington, DC: Government Printing Office, 1895), pp. 18, 19.
“organized labor knows but one law”: Quoted in “Facing the Issue,” editorial, Public Policy 8, no. 24 (2013): 376; D. M. Perry, “Labor Unions Denounced,” Public Policy 8, no. 20 (1903): 319.
Congress passed the Clayton Antitrust Act of 1914: 15 U.S. Code § 17, “Antitrust Laws Not Applicable to Labor Organizations,” October 15, 1914.
Congress finally and forever legalized them: See “Labor and the Sherman Act,” Yale Law Journal 49, no. 3 (January 1940): 518–37.
The National Labor Relations Act of 1935: See Frank Levy and Peter Temlin, “Inequality and Institutions in 20th Century America,” NBER Working Paper No. 13106, National Bureau of Economic Research website, June 27, 2007, p. 16 (http://web.stanford.edu/group/scspi/_media/pdf/key_issues/politics_research.pdf).
After the legendary Treaty of Detroit: Ibid (http://web.stanford.edu/group/scspi/_media/pdf/key_issues/politics_research.pdf.
Ronald Reagan’s notorious firing: See Harold Meyerson, “Class Warrior,” Washington Post, June 9, 2004 (http://www.washingtonpost.com/wp-dyn/articles/A26543-2004Jun8.html).
In what would become a repeating nightmare: Greg J. Bamber, Jody Hoffer Gittell, Thomas A. Kochan, and Andrew von Nordenflycht, Up in the Air: How Airlines Can Improve Performance by Engaging Their Employees (Ithaca, NY: Cornell University Press, 2009), p. 125.
Northwest Airlines threatened bankruptcy: See Peter Rachleff, “Workers Rights and Wrongs,” Dallas Morning News, November 4, 2007 (http://aviationblog.dallasnews.com/2007/11/labor-historian-looks-at-the-r.html/).
the airline outsourced most of their jobs: Ibid (http://aviationblog.dallasnews.com/2007/11/labor-historian-looks-at-the-r.html/).
In 2002, United Airlines entered bankruptcy: “Court OKs UAL Wage Cuts,” Los Angeles Times, February 1, 2005 (http://articles.latimes.com/2005/feb/01/business/fi-ual1).
the Taft-Hartley Act of 1947: See Elise Gould and Heidi Shierholz, The Compensation Penalty of “Right-to-Work” Laws, Issue Brief #299, Economic Policy Institute website, February 17, 2011 (http://www.epi.org/files/page/-/old/briefingpapers/BriefingPaper299.pdf).
even the old heartland industrial states: See “2012 Right-to-Work Legislation,” National Conference of State Legislatures website (http://www.ncsl.org/research/labor-and-employment/2012-right-to-work-legislation.aspx).
the board imposed minuscule penalties: For a discussion of the weakening of the National Labor Relations Board, see Dean Baker, The End of Loser Liberalism: Making Markets Progressive (Washington, DC: Center for Economic and Policy Research, 2011), p. 29.
that decline parallels the decline in the share: Madland and Miller, “Latest Census Data Underscore How Important Unions Are for the Middle Class.” (https://www.americanprogressaction.org/issues/labor/news/2014/09/18/97477/new-census-data-once-again-illustrate-importance-of-unions-to-the-middle-class/)
14 THE RISE OF THE WORKING POOR
the poor have “this idea”: See Paul Krugman, “Those Lazy Jobless,” New York Times, September 21, 2014 (http://www.nytimes.com/2014/09/22/opinion/paul-krugman-those-lazy-jobless.html?_r=0).
America’s poor work diligently: U.S. Bureau of Labor Statistics, A Profile of the Working Poor, 2010, U.S. Bureau of Labor Statistics website, March 2012 (http://www.bls.gov/cps/cpswp2010.pdf).
One-fourth of all American workers: Rebecca Thiess, The Future of Work: Trends and Challenges for Low-Wage Workers, Briefing Paper #341, Economic Policy Institute website, April 27, 2012, p. 4 (http://www.epi.org/publication/bp341-future-of-work/).
average incomes for the bottom fifth dropped 8 percent: Jesse Bricker, Lisa J. Dettling, Alice Henriques, Joanne W. Hsu, et al., “Changes in U.S. Family Finances from 2010 to 2013: Evidence from the Survey of Consumer Finances,” Federal Reserve Bulletin 100, no. 4 (September 2014): 9, 12 (http://www.federalreserve.gov/pubs/bulletin/2014/pdf/scf14.pdf).
According to a study by Oxfam America: Oxfam America, From Paycheck to Pantry: Hunger in Working America, Oxfam America website, p. 3 (http://www.oxfamamerica.org/static/media/files/From-Paycheck-to-Pantry-Oxfam-FeedingAmerica.pdf).
Low-paying industries such as retail: National Employment Law Project, The Low-Wage Recovery: Industry Employment and Wages Four Years into the Recovery, Data Brief, National Employment Law Project website, April 2014, p. 1 (http://www.nelp.org/page/-/reports/low-wage-recovery-industry-employment-wages-2014-report.pdf?nocdn=1).
they generated 44 percent of the jobs: Ibid (http://www.nelp.org/page/-/reports/low-wage-recovery-industry-employment-wages-2014-report.pdf?nocdn=1).
By 2014, its real value ($7.25 an hour): U.S. Department of Labor, “History of Federal Minimum Wage Rates Under the Fair Labor Standards Act, 1938–2009,” U.S. Department of Labor website. Figures were adjusted for inflation using the CPI (http://www.bls.gov/data/inflation_calculator.htm) (http://www.dol.gov/whd/minwage/chart.htm).
it would be $10.86 an hour: Ibid (http://www.dol.gov/whd/minwage/chart.htm).
“The big danger of minimum wage”: Elias Isquith, “Koch Brothers’ Top Political Strategist: The Minimum Wage Leads to Fascism!” Salon, September 3, 2014 (http://www.salon.com/2014/09/03/koch_brothers_top_political_strategist_the_minimum_wage_leads_to_fascism/).
“the main recruiting ground for totalitarianism”: Ibid (http://www.salon.com/2014/09/03/koch_brothers_top_political_strategist_the_minimum_wage_leads_to_fascism/).
“we could potentially virtually wipe out unemployment”: Antoine Gara, “Would Killing the Minimum Wage Help?” Bloomberg Businessweek, June 30, 2011 (http://www.businessweek.com/magazine/would-killing-the-minimum-wage-help-07012011.html).
Research by Arindrajit Dube: Arindrajit Dube, T. William Lester, and Michael Reich, Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties, IRLE Working Paper No. 157-07, Institute for Research on Labor and Employment website, November 2010.
Other researchers who found contrary results: Ibid (http://irle.berkeley.edu/workingpapers/157-07.pdf).
Dube, Lester, and Reich also found: Arindrajit Dube, T. William Lester, and Michael Reich, Minimum Wage Shocks, Employment Flows and Labor Market Frictions, IRLE Working Paper No. 149-13, Institute for Research on Labor and Employment website, October 2014 (http://irle.berkeley.edu/workingpapers/149-13.pdf).
52 percent of fast-food workers were dependent: Sylvia Allegretto, Marc Doussard, Dave Graham-Squire, Ken Jacobs, et al., Fast Food, Poverty Wages: The Public Cost of Low-Wage Jobs in the Fast-Food Industry, U.C. Berkeley Labor Center website, October 15, 2013, p. 1 (http://laborcenter.berkeley.edu/pdf/2013/fast_food_poverty_wages.pdf).
Big Macs cost only thirty-five cents more: William Finnegan, “Dignity: Fast-Food Workers and a New Form of Labor Activism,” New Yorker, September 15, 2014 (http://www.newyorker.com/magazine/2014/09/15/dignity-4).
According to the National Employment Law Project: National Employment Law Project, “Big Business, Corporate Profits, and the Minimum Wage,” National Employment Law Project website, July 2012, p. 1 (http://nelp.3cdn.net/e555b2e361f8f734f4_sim6btdzo.pdf).
Three-quarters of these employers: Ibid (http://nelp.3cdn.net/e555b2e361f8f734f4_sim6btdzo.pdf).
an average of $24 million a year: Catherine Ruetschlin, Fast Food Failure: How CEO-to-Worker Pay Disparity Undermines the Industry and the Overall Economy, Demos website, 2014, p. 2 (http://www.demos.org/sites/default/files/publications/Demos-FastFoodFailure.pdf).
Walmart’s CEO received $20.7 million: Jessica Wohl, “Wal-Mart CEO’s Pay Jumps 14.1 Percent to $20.7 Million,” Reuters, April 22, 2013 (http://www.reuters.com/article/2013/04/22/us-walmart-pay-idUSBRE93L16320130422).
the wealth of the Walton family: Josh Bivens, “Inequality, Exhibit A: Walmart and the Wealth of American Families,” The Economic Policy Institute Blog, July 17, 2012 (http://www.epi.org/blog/inequality-exhibit-wal-mart-wealth-american/).
only 26 percent of jobless Americans: Josh Bivens, “Poverty Reduction Stalled by Policy, Once Again: Unemployment Insurance Edition,” The Economic Policy Institute Blog, September 16, 2014 (http://www.epi.org/blog/poverty-reduction-stalled-policy-unemployment/).
The share of recipients with earnings: See Dorothy Rosenbaum, The Relationship Between SNAP and Work Among Low-Income Households, Center on Budget and Policy Priorities website, January 2013 (http://www.cbpp.org/files/1-29-13fa.pdf).
The poverty rate in 2013: Office of the Assistant Secretary for Planning and Evaluation, “Information on Poverty and Income Statistics: A Summary of 2014 Current Population Survey Data,” ASPE Issue Brief, U.S. Department of Health and Human Services website, September 16, 2014, p. 3 (http://aspe.hhs.gov/hsp/14/PovertyAndIncomeEst/ib_poverty2014.pdf).
“How do we help people at the bottom”: “Piketty v. Mankiw on Economic Challenges and Inequality,” On Point with Tom Ashbrook, radio broadcast, April 29, 2014 (http://onpoint.wbur.org/2014/04/29/piketty-mankiw-inequality-america-middle-classgross_ch13-15_122914.docx).
Once the middle class exhausted all its methods: For a full discussion of middle-class coping mechanisms, see Robert B. Reich, Supercapitalism: The Transformation of Business, Democracy, and Everyday Life (New York: Alfred A. Knopf, 2007).
Shortly after World War II: See Daniel Aaronson and Bhashkar Mazumder, “Intergenerational Economic Mobility in the U.S., 1940 to 2000,” Journal of Human Resources 43, no. 1 (2005): 139–72.
43 percent of children born into poverty: Pew Charitable Trusts, “Moving On Up: Why Do Some Americans Leave the Bottom of the Economic Ladder, but Not Others?” Pew Charitable Trusts website, November 2013, p. 1 (http://www.pewtrusts.org/~/media/Assets/2013/11/01/MovingOnUppdf.pdf).
the average gap on SAT-type tests: Sean F. Reardon, “No Rich Child Left Behind,” New York Times, April 27, 2013 (http://opinionator.blogs.nytimes.com/2013/04/27/no-rich-child-left-behind/).
On their reading skills: Program for International Student Assessment, “Reading Literacy: School Poverty Indicator,” National Center for Education Statistics website, 2012 (http://nces.ed.gov/surveys/pisa/pisa2012/pisa2012highlights_5d_1.asp).
The achievement gap: Kelsey Hill, Daniel Moser, R. Sam Shannon, and Timothy St. Louis, Narrowing the Racial Achievement Gap: Policy Success at the State Level, University of Wisconsin–Madison, Robert M. La Follette School of Public Affairs website, May 2013.
According to the Pew Research Center’s analysis: Richard Fry and Paul Taylor, “The Rise of Residential Segregation by Income,” Pew Research Center Social and Demographic Trends website, August 1, 2012 (http://www.pewsocialtrends.org/2012/08/01/the-rise-of-residential-segregation-by-income/).
The federal government provides: Mark Dixon, Public Education Finances: 2012, U.S. Census Bureau website, May 2014, p. xi (http://www2.census.gov/govs/school/12f33pub.pdf).
Most states do try to give more money: See Michael Leachman and Chris Mai, “Most States Funding Schools Less Than Before the Recession,” Center on Budget and Policy Priorities website, revised May 20, 2014 (http://www.cbpp.org/cms/?fa=view&id=4011).
The result is widening disparities: See Andrew Ujifusa and Michele McNeil, “Analysis Points to Growth in Per-Pupil Spending—and Disparities,” Education Week, January 22, 2014 (http://www.edweek.org/ew/articles/2014/01/22/18wop-states.h33.html).
The wealthiest, highest-spending districts: The Equity and Excellence Commission, For Each and Every Child—A Strategy for Education Equity and Excellence, U.S. Department of Education website, 2013, p. 18 (http://www2.ed.gov/about/bdscomm/list/eec/equity-excellence-commission-report.pdf).
“Parents’ foundations”: “Keeping Schools Local,” Wall Street Journal, August 24, 1998 (http://www.wsj.com/articles/SB903734220651863000).
the United States is one of only three: Eduardo Porter, “In Public Education, Edge Still Goes to Rich,” New York Times, November 5, 2013 (http://www.nytimes.com/2013/11/06/business/a-rich-childs-edge-in-public-education.html?pagewanted=all&_r=1&).
