I was listening to Ed Schultz’s radio show today, which included an interview with the great union leader Leo Gerard, President of the United Steelworkers, who asked this question: Why do CEOs and executives get the security of contracts? A small faction of unionized employees have such security, but that piece of the labor pie gets smaller every day. The best paid employees – the executives – are also the most secure.
Corporations now specialize in transferring risk from the company and executives to workers. I met with a client today who drives a small truck. His company is being put out of business by competitors that require drivers to purchase their trucks and routes, which is a method FedEx uses for some of its vehicles. When the company is no longer responsible for the vehicle, it can cut its price while increasing its profit. The company wins, so does it customer. Who loses? The employee who now has to own the truck, maintain the vehicle, and eventually replace it.
This example is just one way that workers are carrying the burden of “productivity.” The more a company can ask of its workers: own the vehicle, own your tools, pay for your entire pension, pay for most of your health care; the more it can take as profit. Those who believe in the “free market” will argue that these business models would be impossible if workers did not accept the terms. I think a more accurate way of describing this situation would be that desperate people will make bad choices. Those bad choices will cause all of us to suffer. First we will pay more to support social programs accessed by low wage workers. The next step will be much worse. What happens when wages fall so low that the shrinking middle class can’t subsidize the system that pushes money up? Our lives will be very ugly.
We need a system that offers real security as well as the opportunity for reasonable profit. Our current system is out of balance, asking the least of those who have the most, setting up a system where those who are most secure are getting even more security.
In today’s Chicago Sun-Times, Sandra Guy tells the story of a young man who chose to take part-time jobs over the past four years. He did this to write a book. Now he’s found that he’s not able to save or put money aside for retirement. Sadly, this story does not stop with people who have chosen part-time work. Many Americans are stuck in part-time jobs that offer no chance to save for proverbial rainy day.
Even many full-time employees have faced several years of small raises or no raises at all. One of my clients is married to a corporate lawyer. Her husband has not had a raise in 5 years. His company stopped contributing to 401K savings. This example shows that even accomplished professionals are facing an ever tightening noose of insecurity.
What will we do? Too many people are asking that question.