The Predatory Economy

Ready for '08 | Speaking at the Council 93 (Massachusetts) 18th Biennial Convention — held in Danvers in November — about the importance of political activism.
Photo Credit: Linda Corcoran

Message from the Secretary-Treasurer

By William Lucy

The current economy is not working for working people. The average price of gasoline is approaching $3.00 a gallon and experts agree it could be $4.00 a gallon come spring. If you use heating oil, you’ll pay an average of $319 more this winter than last. 

As if that isn’t bad enough, we now have one fore closure filing for every 196 households. Subprime loans, accounting for many of these, target people who would otherwise be unable to buy a house. But the problem is that they can’t afford the loan either. Despite the administration’s plan to freeze some adjustable-rate subprime loans, it’s too little too late. Meanwhile, personal bankruptcies went up 48 percent in the first half of 2007.

But these bankruptcies are not isolated phenomena. With skyrocketing medical costs and 47 million Americans without health insurance, people are skipping mortgage payments to cover hospital bills. These are symptoms of the monster that’s been feeding on workers and growing in strength during the current administration: the “Predatory Economy.”

Economic Security — Going, Going, Gone

Federal Reserve Chairman Ben Bernanke finally admitted that surging oil costs, a housing slump and a credit crunch will slow the economy even more and increase inflation. But he says that the nightmare of the 1970s’ “stagflation” — slow economic growth paired with high inflation causing high unemployment — will not rear its ugly head again. I say, don’t count on it. Under Bush, we’ve lost over 3 million higher-paying manufacturing jobs. These are usually replaced by low-wage, non-unionized service jobs.

Middle-class families (defined as a family of four with a median income of $48,201) are increasingly living from paycheck to paycheck. Over a quarter spend 30 percent of their incomes to cover housing costs. One in four has at least one member without health insurance. One in five has less than $100 in discretionary income.

With a median debt of $3,500 and median net assets of zero, less than one-third of middle-class families have economic security — emergency savings, retirement savings and funds to help children move toward economic security.

A Level Playing Field

For years, the strength of the American labor movement mitigated these problems. One out of three workers belonged to a union. Even non-members had a higher standard of living thanks to unions.   

History has taught us that the right to organize and bargain collectively levels the playing field. Union workers earn 30 percent more than non-union workers. Eighty percent of union workers are covered by pension plans versus 47 percent of non-union workers. It’s easy to see why labor unions built the solid middle class in this country.

Despite the clear advantages of unions, membership is down from 25 percent in the late 1970s to 12 percent today. Wages are stagnant, while productivity and corporate profits are up. Health care and other costs are dangerously increasing. If we want all the boats lifted and not just the yachts, we need to re-build, re-organize, and re-energize the labor movement. And we don’t have a moment to lose.

That’s why we need the Employee Free Choice Act, which would allow workers to form unions by signing authorization cards without employer intimidation.

Nothing short of social and economic reform will close the increasing divide between the haves and the have-nots, and pull us out of a looming recession. We must reinvigorate labor so we can elect a new President in 2008 who will help us once more create an economy that works for everyone.