[S10 E40] New
On this week's show, Prof. Wolff talks about the Geneva, Switzerland vote that's raising the minimum wage to $25.16/hour or over $50k/year; GOP block federal aid to cities and states; economics of police brutality; 20th vs 21st century depressions; and lastly, how profit motivates capitalists to market fake, toxic hand sanitizers. On the second half of the program, Wolff interviews John Samuelsen, International President of Transport Workers Union (TWU) in the US.
About our guest: Transport Workers Union (TWU) International President John Samuelsen represents over 150,000 members across the airline,railroad, transit, universities, utilities, and services sectors. Samuelsen, a former President of TWU Local 100 in New York City (the union’s largest local), he became the 10th President of the International on May 1, 2017. A Brooklyn native, Samuelsen was hired by the New York City Transit Authority (NYCTA) in 1993 and was assigned to a subway track gang in Brooklyn. By fighting hard ford for his fellow workers, he rose steadily through union ranks to his current leadership position. He still maintains an active public role in New York politics and advocates on behalf of all TWU members.
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Transcript has been edited for clarity.
Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives — jobs, debts, incomes — our own, and our children's. I'm your host, Richard Wolff.
I want to begin today with something really remarkable that didn't get the attention (hardly surprising) that it deserves. I want to tell you briefly about the city of Geneva, in Switzerland. They very recently had an election. And the 500,000 — half a million — voters in Geneva (it's a big city) passed a law, a new minimum-wage law. And I want to tell you what they decided to do, in the middle of the covid pandemic, which has affected Switzerland, of course, and the economic global crash of capitalism, which has affected switzerland, of course. Here's how the Swiss people and the Swiss voters reacted. They decided that the way to recover their economy, and to deal with the difficulties of the pandemic, was to increase the minimum wage. Ready? Here we go. The minimum wage is both leveled at an hourly rate and a monthly minimum. Hourly minimum: $25.16 per hour is the new minimum-wage law passed by a majority of the voters. On a monthly basis, it comes to — ready? — $4,453.74 a month. That's the minimum you can earn. And for those of you that are mathematically challenged, we're talking $50,000 per year is the minimum wage.
Please think how different this reaction is of the people of Geneva, when compared to what the voters in the United States and Britain, for example, did. In Britain they reacted to economic and cultural difficulties by blaming and scapegoating the Europeans and voting to separate out, to leave. In the United States, a long period of decline of the middle class led to electing Donald Trump, and all that has followed from that. The Swiss, also affected by these same swirling problems, reacted in a very different way.
Well, let's take it a step further. What's going to happen now? Well, the business community is yelling, as usual, quite expectedly, and they're threatening to leave Switzerland, you see, and go to where wages are lower. Well, let's play the game of tit-for-tat here, okay? If Swiss industries go, no problem, if you think about it. Why? There are literally tens, hundreds of thousands in Geneva and elsewhere in Switzerland who would be perfectly willing to come and work if the government responded to a company threatening to leave by saying, fine, you leave, but we're going to take your office, and we're going to take your machines, because that's in the national interest, and that overwhelms your particular private interest. And we will take these over and run them as government enterprises, with all the Swiss people needed to run them. And you know something? We'll take advantage of this new opportunity and convert many of them into worker co-ops and give workers the chance to show what they can do if running a business in a way that's more consistent with Swiss law than those of you that are running away. Beware of what you threaten, lest it may in fact happen.
I want to turn next to the ongoing saga, at least as of the moment that I'm doing this talk, between Nancy Pelosi and Mr. Mnuchin at the Treasury, acting for Mr. Trump. They can't come to an agreement over whether to save the cities across this country, and the states. Because, you know, if you have a pandemic and you have tens of millions of people unemployed, well then they don't earn money and they don't pay taxes, you know. And then if the cities and towns don't have any money, and the states don't, because the taxes aren't coming in, so what are they going to do? They can't borrow money for their ongoing budget because that's against the law in the United States; they can't do what the federal government does. So they really have no choice but to cut programs. Let's see, in the middle of the worst pandemic in a century, in the middle of the worst depression, we're going to cut back on what the government can do to try to help you through.
This is so crazy that even the people who like capitalism understand we're in an absurd situation. But what have we got? Struggles between Republicans and Democrats. And not just here in the United States — the British have it the same. Boris Johnson against Sadiq Khan, fighting over whether to fund the subways. When a country goes like this, breaks apart, and they fight each other, these political leaders, you know what loses? The economy as a whole. You don't run the subways in London? Are you crazy? That's the British economy in trouble making itself worse. Here in the United States, if you bankrupt the cities — even if it's Democrat cities versus Republican — the fallout from that will affect everybody. The narrow political advantage is swamped by the social damage, and that's a sign of a system falling apart. We need a unified response. It's much more urgent than anyone is willing to admit.
I want to turn to a touchy subject: police brutality and repression. And I want to say it as bluntly and clearly as I know how. We are in a period of extreme economic crisis. We are in a situation as bad as the Great Depression, which transformed the 20th Century. This one is transforming the 21st. In that situation, our economic system hurts the people in the middle and the bottom the most. Those at the top have the resources to get through it. Okay. If you damage — as severely as we have, in as short a time as we have — the mass of people in the middle and the bottom, here's what's going to happen. You're going to drive a number of them over the edge. What do I mean? Mental stability, that could be one. Physical health, that's certainly another one. Willingness to do extreme actions to get through a crisis, for sure. And that includes what? Some criminal activity: petty stealing to get by, breaking the rules to get by.
Now, what do we do in this society of ours? We throw the police at this problem. That doesn't work well. And you know what? The police, put up against this deteriorating social situation, take out their frustration, their upsets, their inability to solve these problems, in some cases, by brutal actions. I am in no way excusing them. There is no excuse for what has been done. But it's only going to get worse. And it is economically lunacy what is being done. It is destroying the network of this society, the relationships among people, the holding together of a diverse society. This is self-destructive behavior, folks, whatever else you may be told.
Nothing illustrates it more than the case of one Luther Hall, in St. Louis, Missouri. In 2017 there was a case there. Two white policemen grabbed a middle-aged black protester named Luther Hall and beat him terribly. It took him months to get over it. This would not be an unusual situation, unfortunately, were it not for the fact that Luther Hall turned out to be an undercover cop, a policeman, and he blew the whistle. But for everyone like this there are a hundred, or maybe a thousand, who weren't undercover police people. There is no excuse. And the system presided over by Mr. Barr, and Mr. Sessions before him, and Mr. Trump bears major responsibility.
And is there a solution? You bet. Here's a simple solution: Give everybody a job. Go back to the Employment Act of 1946, which said it's the obligation of the government to give everybody a job. That's what the debate in Congress about that act was all about: Give everybody a job, give them a decent job, and a decent income. You know what? It's cheaper to do that, if I have to say it, than to have an army of police, very expensive, killing people — that's why we have Black Lives Matter — and doing unspeakable damage to the long-run viability of this society. Bad investment, bad policy, cruel, and unjust. Wow. You want a sign of a system that isn't working well? There you have a dozen signs all wrapped into one.
Next update — brief but profound. The 20th Century in the United States and elsewhere was shaped by the Great Depression of the 1930s. That depression produced in the United States the New Deal, a radical shift to the left in politics. And we got Social Security, and unemployment compensation, and public jobs, and a progressive President Roosevelt, and all the rest that I've talked about on this program many times. The rest of the 20th Century was the attempt of the business community and the Republican Party to roll back everything that had been achieved in the 1930s. In other words, the whole century was shaped first by the convulsion, then by the left-wing response to it, and then by the right-wing undoing it.
We're going to have the same this century. We're in the first step, the convulsion. And we're already well through the lurch to the right — not the left this time — which suggests to me that the rest of this century will be the left undoing the catastrophes of the Trump period.
Last item. You've heard me often talk about how the profit motive and capitalist competition are not the benefits, are not the wonders, that the economics profession teaches (and I know it well, being part of the profession), or that the media celebrate, or that the uneducated politicians (and unfortunately, that's a clear majority) keep repeating. And so I want to give you an illustration, right now, today, of how the profit motive produces, alongside whatever benefits you can show, terrible costs that need to be shown as well. So, we have a profit system that did not mean, did not mean, that the companies that could have produced masks, gloves, ventilators, and hospital beds — we have the capacity — they didn't do it. They didn't produce them. That's why we weren't prepared for the covid virus. They didn't produce them; they didn't store them and stockpile them in warehouses, where people who needed them could access them if and when they got sick. You know why they didn't do it? Because it wasn't profitable. The profit motive made us unprepared to sustain public health.
But here's what else the profit motive did: According to the FDA this last week, there are dozens of toxic hand sanitizers for sale all over the internet and in stores. Seventeen people have died from using them, and countless injured. Methanol is in many of them, which is very dangerous. Profit is dictating all that behavior. Competition to get profit is ripping us off at a time when we can't possibly afford it. The profit motive? A very mixed blessing at best.
We've come to the end of the first part of today's show. Before we move on, I want to remind you that we've just released my third book with Democracy at Work. It's called The Sickness is the System: When Capitalism Fails to Save Us From Pandemics or Itself. It's a compilation of essays that aims to explain how and why capitalism is the sickness underlying all the symptoms. You can get your copy today at democracyatwork.info/books, our website democracyatwork. I want to also thank our Patreon community for their ongoing and invaluable support. If you haven't already, please consider going to patreon.com/economicupdate. Please stay with us; we will be right back with today's guest, the International President of the Transport Workers Union, John Samuelsen.
Welcome back, friends, to the second half of today's Economic Update. And today's second half is a special pleasure for me, to welcome to the microphones and to our cameras John Samuelsen. And I want to introduce him to you as a really important part of the American labor movement at this point. He is the International President of the Transport Workers Union, a union that represents over 150,000 members across the airline, railroad, transit, universities, utilities, and service sectors. He was formerly the president of TWU Local 100 in New York City, the largest single local of that union. A Brooklyn native, Samuelsen was hired by the New York City Transit Authority in 1993, was active and militant, and moved all the way up through the union movement to his current leadership position. He still plays an active role in New York politics and advocates on behalf of all TWU members. During his time as president, the TWU has been focused on new worker organizing and growing the union by 15,000 members in over 20 successful organizing drives. The TWU is currently leading the charge in fighting against offshoring the maintenance of US passenger aircraft to foreign countries and defending jobs against displacement through automation — a problem for many, many working people in this society.
WOLFF: So first of all, welcome, John, and our appreciation for your giving us your time today.
SAMUELSEN: Thanks very much for having me.
WOLFF: My pleasure. Okay, let's begin with a slightly different ordering of the questions, because of what's going on in the country right now. There is bickering — to be as polite as I know how — between Republicans and Democrats in Washington over providing long-needed help during this pandemic to cities and towns. As everyone knows, when you have tens of millions of people unemployed the way we do, when you have hundreds of thousands of businesses closed the way we do, the tax revenues flowing to cities and states are very badly impacted. Because cities and states are not allowed to borrow for ongoing budget, they can't respond in the way the federal government does — which means we are threatened with massive losses of jobs and of public services at a time when we need them more than ever because of the pandemic and because of the unemployment. This is a crazy way to organize a system, but I wanted your opinion, because transit workers, and the provision of proper transportation, is a key part of urban life. And if cities can't do it, well, I have no idea what follows. I want your thoughts on this whole issue.
SAMUELSEN: Well, I think it's — first of all, it's utterly ridiculous that there's even a discussion about state and local money being a stumbling block right now for a bailout for a subsequent Cares Act bailout. So it's played itself out in the media that there has been a willingness perhaps to bail out, to do a subsequent Cares Act bailout, except that state and local money has been this stumbling block, that the White House, or the Republicans in the Senate, or the Republicans in the House don't want to engage in any kind of money or the delivery of money to state and municipalities. That's clearly part of an anti-urban agenda on behalf of the Republicans. It's politics at its purest and its most vile.
Even if the federal government engaged in a subsequent bailout for public transit agencies, it really wouldn't matter if they didn't bail out municipalities and states, because governors like Newsom in California or Cuomo in New York would just strip public transit agencies — and really health, and hospitals, and every other public service that they provide — they would strip those institutions of money and put it right into the general state coffers if those institutions were bailed out directly by the federal government. So a state and local bailout is absolutely required as part of any other federal bailout or any other subsequent Cares Act bailout. So right now, or at least as has been reported, any kind of federal bailout that doesn't include state and municipal money is kind of a waste of time. A comprehensive bailout must include state and municipal money, or it'll kind of implode upon itself.
WOLFF: Right. It seems to me, as an economist, that you're also shooting yourself in the foot if you allow the urban centers to have inadequate transportation. We've known for two centuries that adequate transportation is a key part of the economic system we live in, and shortchanging it is going to be self-destructive in terms of all of its social impacts.
SAMUELSEN: Yeah. Public transit systems across the country represent the nucleus of several regional economies. And while the Republicans, nationally, may believe that bailing out public transit is not a big thing, what they're going to see is that regional economies, one after another, are going to begin to tumble like dominoes if they're not bailed out. So one regional economy going down is something, but when they all start going down, one after the other, because of this pandemic and the associated economic collapse, that's going to be a national travesty.
WOLFF: Okay. Given all that's happening to working people over the last several decades — the shrinkage of benefits, the shrinkage of real wages when you adjust for prices, the growing gap between rich and poor — is there happening, can you tell us from inside the American labor movement, is there a developing consciousness, awareness of American workers that they've been on the short end of the stick for quite a while now? Worse under the Republicans than under the Democrats, but the trend, unfortunately, pretty clear. And the way I would like to pose this question is I'm old enough that I remember my father telling me about this wonderful labor leader and pointing to pictures of him in the newspaper. And the name stuck in my mind because my father was so excited. The man's name was Mike Quill, and he was a leader of your union. Is there anything like, let's call it for lack of a better term, a resurgence, or a remembrance, or a return to the kind of leadership and followership that Mike Quill represented?
SAMUELSEN: I believe that there's a resurgence in consciousness among working people that the trade-union movement is necessary, perhaps like never before, certainly on the economic side. But COVID-19 has raised an awareness among working people that a collective approach to the bosses is necessary to save lives during this age of COVID-19. If it were not for the trade-union movement, if it were not for workers standing together, back to back, thousands more would have perished from COVID-19. I think when this pandemic is behind us, there's going to be a massive organizing boom in America. We're seeing that already. Our phones are ringing off the hook, particularly in the transport sector, about workers trying to join the trade-union movement. Right now the TWU and many of our sister unions are doing a lot of virtual organizing, which we would have never been able to do before but for trying to figure out new ways of doing business in the age of this pandemic.
So workers have lifted their heads off the pillow, so to speak, and have come to a full understanding about how important this trade-union movement is. And I think we are going to see a new age of workers standing up to the bosses, standing up in such a way that they're not going to let the bosses kill them. And this pandemic has had a lot to do with it.
WOLFF: Could you just, John — I don't mean to interrupt, but this is so important — could you help us, why is this happening? Given what you've just said, how would you help us understand why workers are feeling more pro-union, for lack of a better term?
SAMUELSEN: Just in this transport sector alone — in public transit, in the airline industry, in the railroad industry — in those sectors alone, the indifference, the lack of care, the desire to either make a profit or the depraved indifference of not wanting to provide a mask or basic sanitary workplace conditions of these bosses, which led to workers getting sick and perishing in the line of duty to COVID-19. And the only way, in many cases, of workers to go home in one piece at night and not spread COVID-19 to their families was to stand together and fight back. And workers in unions survived much better than workers not in unions. Workers in unions were able to get access to sanitary conditions and masks in ways that workers not in unions were not able to. So just in that way.
Now that we're facing catastrophic economic conditions, workers in unions are faring much better than workers who are not in unions. And it doesn't take a rocket scientist. If you're a worker — and workers certainly, you know, workers have a high intellect — they look around and they see the treatment that workers in unionized industries are getting, and they want it. And they're going to get it too.
WOLFF: Okay. Let me get at this from yet another direction. In most European countries, almost all of them, they've had the same kind of troubles with pandemic that we have — not as bad, because their governments behaved differently — but one of the things that was really stark in the difference was that in countries like France, and Germany, and Italy, and beyond, they did not resort to mass unemployment. They just didn't do it. When the government went to the business community and said, okay we're going to help you through this crisis, there was an unspoken, often unspoken, condition: We will help you with money, you can't lay people off. That's the deal, no unemployment. So for example, at the beginning of the pandemic, unemployment in Germany was five percent. Today it's six percent. If you take a country like Italy, it has less unemployment now than it did a year ago, the whole pandemic.
But in this country we forced 50 million-plus people to go file for unemployment. How is it possible for the United States to have treated its workers so badly? That on top of all the anxiety of covid and everything else, you now have to worry whether you're going to get your job back, under what conditions. It's downright cruel, and it didn't have to happen. And in Europe, do you know how they explain this (because I've asked)? They explain it, they say the unions and the left, political left in Europe, would never have allowed it. If you had caused unemployment like this, those people would have been in the street. What happened? How do you explain this?
SAMUELSEN: Well, certainly the union density is higher in Europe. But aside from that, there's a long tradition in Europe on the left. And the social democracies of Western Europe, the culture in Western Europe, has led to this. This is not the first time this happened, right? These short-term work programs happened in the 2008 recession across Europe. There's just a long-term culture of supporting businesses and supporting workers that doesn't exist over here.
And isn't that the shame of it, that the Republicans in the United States would call the Europeans “socialist,” and meanwhile these socialists in Europe did so much more to support businesses and families. So-called Republicans in the United States and their “family values” are shamed by what they would view as socialists in Europe that supported families and small businesses across the board, and kept people on the payroll. And in one of the great cruel ironies of life, in Europe they kept families on the payroll where medical benefits are provided by the government. In the United States the Republicans kick people off the payroll, where you basically have to stay on the payroll in order to maintain your health benefits, where it's absolutely backwards.
So yeah, the social democracies of Europe, and particularly Western Europe, kept everybody on the payroll. It meant for a smooth transition back into a post-covid world. In the United States everything is in tumult, in chaos. And you saw the latest jobs report — it's a complete disaster, and potentially getting worse and worse. And meanwhile, Europe is well situated under these so-called socialists. The social democratists are well situated to recover from this pandemic.
WOLFF: John, I think you have made the case better than I could. That's exactly the point we try to make on this program. Don't get thrown away, or deflected, by bad words or bad associations. Look at what the reality is and learn from it.
Thank you very much, John. We've run out of time, but I really appreciate your taking the time and giving our audience a perspective from inside the labor movement. Very, very important. Thank you.
Transcript by Marilou Baughman
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