[S10 E45] New
On the first half of this week's show, Prof. Wolff discusses labor's gains and losses, and the refutation of the claim that China's spectacular economic growth is a product of capitalism, not socialism. The second half of the show features an interview with investigative reporter Bob Hennelly on labor in the U.S. today, with a particular focus on public employees.
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, incomes, debts — our own and our children’s. I'm your host, Richard Wolff.
I want to begin with, in a way, the good news and the bad news coming out of the election. Not the good and bad news that you already know about, but a couple of items, two or three in fact, that I think didn't get the kind of attention that they deserve. So I'm going to have two good newses and one bad news, and I'm going to sandwich them between one another.
The first good news is a ballot issue in the state of Florida. Florida went for President Trump, but the same people who voted Trump in also raised the minimum wage for people in Florida. An awful lot of people in Florida, both in agriculture and in the service industry, get paid very, very poorly. And a minimum wage of $15 an hour did pass, and pass well, in the Florida vote. The bad news about it is that the $15 doesn't kick in until 2026, which means that between now and then the inflation will erode what the real meaning of $15 an hour is. But it's better than what existed before. It's a plus.
More important is a minus. And the minus happened in California. It had to do with something called “Proposition 22.” And the basic point of that proposition — which passed in California, even though California went overwhelmingly for Joe Biden — is it allows Uber, Lyft, and other service-car, or vehicle-driving, entities to treat their workers as contractors, rather than as employees — something often called the “contract economy,” or the “gig economy,” words like that.
I want to drive home to you that this is extremely important. It is a defeat for the entire working class. And that means the majority of us here in the United States, the overwhelming majority of us, who are employees — whatever legal label is attached to it. What Uber and Lyft got was an exemption. They don't have to protect their workers, their employees, by the simple device of calling them something else. You're not my employee; you're a service provider with whom I have a contract. You're a gig worker.
And in case there was ambiguity — and of course there was — and in case there were lawsuits — and of course there were — here is a ballot, the people voted, to allow them what? To exempt workers from — and here's the key point — 150 years in this country, maybe more, during which working people fought like hell for all kinds of protections. You know, the length of the working day, so you can't be made to work more than eight hours a day because that's the law — that had to be fought for in this country for a long time; that you can't be physically abused; that you can't hire children; that you can't impose on your workers sexual services, through a harassment procedure; that you have to have a toilet; that you have to have clean air; that you can't verbally abuse . . . . You get the picture? Loads of protections. And a lot of those protections — insurance policies, so if a worker gets hurt, there's a . . .— all of those protections apply to employees. And Uber and Lyft don't want to pay those costs. They don't mind that their workers are therefore not protected. It's profit in their pocket because they don't have to pay for the protections. That's what the law was there to force them to do, and they just got out of the law.
And you know what's going to happen now? Forty-nine other states are going to see the same effort made in those states. And man, if it can work in California, it's going to be easier in many other states, for all the reasons you know. And is it only the Uber-, Lyft-type of businesses? No, anybody now who employs a worker to do a service can try to reclassify that worker as a gig worker, rather than an employee, saving them money. This is an attempt to roll back the history of working people 150 years in this country. Make no mistake. That's why Uber, Lyft, and the others spent over $200 million on this obscure little vote.
And here's the punchline of punchlines: Many people were told in California to do this, pass this, because it will enable poor people to get a job driving a car, because they're having such a hard time. And a lot of the votes that gave this gift to business were well-intentioned people who wanted to provide an opportunity. You know, it's like those people in Florida who voted to raise the minimum wage. Think about it. An ad on the TV screen: Don't you want to help a poor person make a living, driving a car, for their family? Reminds me of nothing so much as 100 years ago when, to keep child labor going in America — the awful process of making five-, six-, seven-year-old kids work all day in a rat-infested sewing shop — and you know what the ads then said? Poor people need for their children to work. If you don't let their children work, they'll be even poorer. Yeah, you frame the question that way and you can pull off a kind of defeat of the working class.
Something needs to be done to undo this. And the legislatures in California and across the country — and maybe a job for the new Biden administration — is to take steps to prevent this from happening. Federal law can trump (pardon the expression) state law. That needs to be done.
But now the other side again — Portland, Maine. Here's a remarkable story. In Portland, Maine — Portland is one of the major cities in the state of Maine — in Portland, Maine, a group of local progressives — roughly half in the progressive alliance of Portland and roughly half in the Southern Maine chapter of Democratic Socialists of America — they got together and put up some ballot initiatives, bringing rent control, bringing a rent commission, to help tenants against landlords. And also raising the minimum wage, with a new idea that you get time and a half during an emergency — like the one we're living through. What an initial interesting set of ideas. But here's more: They won. They won it all. The votes went for them. Look what America can do.
Last point: The socialists and the progressive alliance together raised about $46,000 to fight for this. And the local business community — which, of course, doesn't want to pay higher wages, doesn't want to have rent control — they raised $650,000 to fight it. Notice something? People beat money. And if you look at the national election, Democrats in many of the races they lost (below the president) spent much more than the Republicans. Think about it.
The last economic update we have time for in today's first half of the show has to do with China. And I'm going after it this time in a slightly different way. I notice in a number of media interviews I've been doing recently, and debates, when China comes up, the people who don't want to face what the Chinese have done have come up with an interesting argument that I want to refute. Here's their argument: Yes, China is growing very fast. Yes, they admit, China is growing much faster than the United States. And that's been going on for 25 years — yes, they admit that too. But here comes the kicker that they come back with: That's only because 25 or 30 years ago China gave up being a socialist country and brought in capitalism. Oh, this is a lovely story.
So now, having tried to deny that China has caught up and in some ways already surpassed the United States, we're going to admit it but say that's because of capitalism not because of socialism. Let's see. Some of the highest rates of growth happened under Mao. Let's remember — Mao lives until 1976. He's in charge of Chinese economic development, from the time of the successful Chinese Communist Revolution, 1949, until his death,1976 — so roughly the first 25 years of the People's Republic of China. Some of the highest rates of growth happened at that time, during his leadership. Likewise some of the lowest, and you know why? Because they were recovering from something when Mao took over in 1949.
Let me remind you what the Chinese economy had as a problem. Number one, they were one of the poorest countries on earth. Number two, Japan — one of the richest countries on earth — had invaded China in 1931. They had fought a war with the Japanese from 1931 to 1945. That's a very long time. Then China was part of World War Ⅱ. And when World War Ⅱ was over in 1945, China had a civil war between the right wing and the Mao wing. Very poor country, decimated by invasion from Japan, decimated by World War Ⅱ, decimated by a major civil war that lasted four years, from 1945 to 49. That means the first 25 years of China's development were a matter of recovery, of trying this and that — the communes, the Great Leap Forward, the variety of efforts. Yeah, he had some very high rates of growth, and some very low ones, but eventually they settled on a plan, which was in place in 1976 when he died.
The notion that the economic growth achieved since the 1970s — which has always been in the five percent and higher range, which is much higher than the United States ever got in that period — the notion that that's all due to what happened after Mao is a kind of crude effort to deny to what they did in China the credit to be given to what Mao initiated, what Mao went through to establish both the recovery of China and the basis for growth. It's a cheap shot.
One more step in all of this. In many parts of the world, “socialism” means that the government has an enormous control over what happens. Yes, there may be private enterprises — there are, for example, in many of the Scandinavian countries — but they call themselves socialist, and they have for decades, because the government regulates, controls, and operates many of the industries. That's what the Chinese mean by “socialism.” It is not like the United States. It is precisely a place for private capitalism, no doubt, under the control, the limit, and the regulation of a powerful state apparatus. That's what they mean by “socialism,” and that's what's achieved China's remarkable growth. The idea that it's only the capitalist sector that gets the credit, and not the whole society, is pure ideological nonsense.
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 recently published 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 we ought to worry about. You can get your copy today at democracyatwork.info/books. I want to also, as always, thank our Patreon community for their ongoing and invaluable support. It helps make this show possible each week. So if you haven't already, please go to patreon.com/economicupdate. You'll find all our programs. Sign up today. And please stay with us; we'll be right back with today's guest, investigative reporter Bob Hennelly.
WOLFF: Welcome back, friends, to the second half of today's Economic Update. It is with real genuine pleasure and anticipation that I welcome back to our microphones and cameras a frequent guest on this program, investigative reporter Bob Hennelly. He's a print and broadcast journalist who reports for The Chief Leader, which has been covering public unions since 1897, and in recent years has broadened its coverage to include the entire labor movement. And that's what we're going to be talking about today. Bob's writing regularly appears in Salon, The Raw Story, Insider New Jersey, and The AlterNet. You have seen him on Democracy Now, PBS Newshour, and heard him on NPR. So please join me in welcoming Bob to this program once again. Thank you, Bob, for joining us.
HENNELLY: Thanks for having me; it's a pleasure.
WOLFF: Okay. In the wake of a historic election, I think it's fair to say, what I want to ask you about is the kind of immediate next crisis we face. At the time of this program, it's really a matter of a few days before the United States Supreme Court is set to hear a case brought by the Trump administration, seeking to throw out the Affordable Care Act. And one of the implications of that would be to strip first responders, health-care professionals, and all those folks deemed essential workers since February of this year — people on the front lines of the pandemic — they would now no longer be covered for the pre-existing conditions which they may have in fact contracted while saving all the rest of us from what is already a terrific pandemic danger to us. Tell us about this case and what its implications are for the vast majority of Americans who work for a living.
HENNELLY: Well, this is — you've put your finger on probably the most underreported aspect of the entire Affordable Care Act debate. Throughout the election, and particularly with the battle over the Supreme Court nomination, the Democrats did make an effective argument about the broad impact of the loss of ACA on the United States as a whole. But what was missed (and I would refer to much like hidden figures, if you will) is the civil service, the respiratory therapists, the EMTs, the nurses, the sheriff deputies — indeed the entire public infrastructure of individuals that are out there responding to this pandemic in all 50 states and territories — who by dint of the fact that they have been responding, have been exposed, and their families. That's what makes this such a unique challenge historically.
WOLFF: And we're talking about millions of people here.
HENNELLY: Right. You're talking certainly in the tens of thousands. And we know, for instance, that the health-care professionals — The Guardian’s doing a pretty good job, and Medpages as well, keeping track of the loss of health-care folks. About a thousand people — that's considered low by some estimates — have died already. In the case here in New York City, just to give you a sense, we lost over around 130 transit workers. It's estimated that 300-some-odd civil servants of various titles outside of transit were lost. Six detectives from the NYPD — who in the initial phase of this pandemic, as required by law, were going into all the homes where someone had died in their home to document it and speak with the family — six of those individuals died. And one of those detectives who perished ended up exposing his wife and his two young children. And if it hadn't been for the union wrapping around that family, they would have had a dramatic problem.
So this is the implication of the loss of that. And I might add also that what's being underreported — because of the fact, I guess, America can only do one big story at a time — is that this “transition,” quote unquote, is happening at a time of unparalleled public health peril in the history of the United States, with this epidemic full-blown in every state that I can see. And a lack of consensus is revealed by the vote itself on how to go forward in the debate. It's important to know, despite the celebrations and the spontaneous dance parties, that Donald Trump got several millions of votes — more this time. And the actual Democrats lost traction in the House.
WOLFF: Yeah, and tell me if I'm correct. Millions of — I believe it’s now over 10 million — people have contracted the disease in this country. Right? And we know that all kinds of symptoms
can take all kinds of time to manifest themselves in these people. Is it then not the case that if you do away with the pre-existing-condition situation, these people may be deprived in the future of health insurance based on suffering they've undergone during this pandemic?
HENNELLY: Exactly. And the other thing about this — and I wish there'd be some polling done by these large hill organizations about the range of knowledge about the disease. Because, unfortunately, the debate about this pandemic, the campaign, came to personify two polar opposites. In the case of the Biden/Harris ticket, it was one where wearing a mask was considered the civic thing to do, a considerate thing, a collective thing to do. Whereas not wearing a mask was identified with Trump/Pence, and it was a sense of individual liberty and prerogative. And so that still is the state of this conversation in this country. And so you're right that what's happening is — we know, for instance, that, by some research, at least a third of the individuals that had been crossed with disease, that had a bout with it, are dealing with long-term implications. And so we're talking about potentially millions of individuals who are going to be permanently disabled.
And then another chunk of the workforce — and we've seen this so tragically — were women, who have lost at least a generation of workforce participation. I know you've covered that. We've seen women — of course, because of the patriarchal nature of late-stage vulture capitalism — being forced to stay at home, abandoning their career, to take care of both the people that may be ailing from the extended family, and doing the homeschooling because of the collapse of public education as we knew it.
WOLFF: Yeah. You know, there is an old saying that how a society treats the frontline essential workers — those people charged with what can be called basic public health of the community — that how a society treats them tells you a lot about what a society really means when it values human life, when it values the basic benefits of a society that is civilized, where people take care of each other. If I understand you rightly, both from your writings and what you've said on this program, we're not showing real well in this country in terms of how we are treating all of those frontline people, even beyond what has been noticed, which is they are often among the poorest paid.
HENNELLY: Right. Well, this is so true. And one of the things about this is that there is great concern that individuals who are — and remember, the United States is a mixed bag when it comes to labor; you have your right-to-work states — and there's great concern among the emergency medical technicians, among the nursing profession, that if you happen to be so unfortunate as to be doing this essential work in a red state or right-to-work state, where they've been in denial about the pandemic, unlike in the Northeast, they're seeing their members perish — and then not even seeing an honest declaration that they died in relationship to the pandemic.
So there is a growing movement to have a permanent registry, if you will, to memorialize the loss of life, to honor people. Because we, this country, every time we've had a war, Rick, as you know, we throw up a monument in the town square. Well, the trade unionists I'm talking to are saying, listen, this is not just about honoring their sacrifice but holding us responsible to future generations for our failure to really deal with this pandemic. And we knew that if we had listened to labor every step of the way, we would not have had the same kind of disastrous results.
WOLFF: Is this part of a general Trump attack on the public service? In other words, what you're saying, really, about the pandemic, is it part of a broader assault on the whole public sphere, public service, public workers, provision of public goods for people who rely on them as part of their standard of living?
HENNELLY: Yeah. I would say that this, of course, has roots back to the Reagan era. And certainly we know the damage that was done to the labor movement here in the United States when Reagan unilaterally forced out all the air traffic controllers who were trying to raise the profile of serious issues that endure to this day about air traffic control. And it's true that Trump certainly gave voice to something that had been ruminating in the far right wing. But what happened is, the Heritage Foundation and the Cato Institute, these ideological fringe groups, had a seat at the table, or were indeed given positions inside the government, along with commercial-sector lobbyists — right? revolving door-itis — where they have gone about the business of dismantling the engine room of the civil service, at the federal, state, and — depending on where you live — even the city level, if it's been in Republican hands.
WOLFF: And this atrophy, if you like, this breaking down of public services — you put that together with a Great Depression which we're living through so that the private sector is not employing people. We have the crazy quality of American capitalism that — just when people need public services more because their jobs are gone, their income is impacted, their public health is . . . — just as we need more public service, we face a lack of revenue at the state, and federal, and local level, and compounded by an ideological warfare against the public sector. It's really an unspeakable breakdown of the system.
HENNELLY: Well, and that's the thing that was so disconcerting about the fact that if you go just down the ballot and don't look at the top presidential thing, that we see that, for whatever reason, Trump still has traction in many, many union households, depending on which poll you look at. And so what is happening right now is, I just got a release from the National Association of Counties — not a Marxist front group — who says that close to a million public workers have been laid off since February. And that is continuing to happen. And so in much of America, in many of the places that Donald Trump still carried the vote — I'm thinking of upstate New York, places where the manufacturing base was long eroded because of multinational policies that the United States facilitated, that you've covered in such detail in this program — all that's left, Rick, all that's left is the prison and the hospital. And now we're seeing that those places of employment, those are really kind of — that's it. That's the backbone, what's left.
And we're seeing that undermined by the refusal of the Republican Senate still, as we speak, to do the second round of stimulus. And even a more cynical act, which was not to do what was done in Western democracies — they're more pro-humanity — the business of holding back the $600 additional pandemic relief to try to support people to keep the quarantine. So yeah, it's a race to the bottom like we've never seen.
WOLFF: Is there any light in the tunnel? Is there any upsurge? I know you've been in touch with some of the union leaders. Is there any organizing going on? Is there any labor response — you know, the way there was eventually in the 1930s, the last time we had a depression like this?
HENNELLY: Well, what we're seeing is that individuals that are represented by a union — and there's some data — are faring better in the pandemic, in the sense that they will have at least, for instance, if they're required to have a quarantine of two weeks, that's paid. We're seeing that. There's a much greater likelihood of having PPE, personal protection equipment, if you're in a unionized environment. What is really stark is what's happening in so many places where, as we know, so many essential workers, particularly in the food sector, in distribution, aren't. And those folks are — look at what happened even in the meatpacking industry, where there was representation. So it's a mixed bag. But it seems that consciousnesses are being raised and people are being radicalized.
WOLFF: Bob, that's a very important, and a little bit of a hopeful, ending for us. Thank you so much for joining us again. And I will be coming back to you, because I'm hoping for — as I know many Americans are — for a response of the labor part of our society, of the vast majority. Something like what happened in the 1930s. It took a few years to get going then. Maybe we've learned. Maybe we can catch up. Thanks again, Bob, and I look forward to our next time.
And to our audience, thank you for joining us. I hope you found this as interesting as we did bringing it to you, and I look forward to speaking with you again next week.
Transcript by Marilou Baughman
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