Pity the Millionaires: Killing Unions, the Public Sector, and the Middle Class from Indiana to San Diego – America’s Finest Tourist Plantation

by on February 20, 2012 · 15 comments

in Economy, Labor, Popular, San Diego, Under the Perfect Sun

San Diego Labor rally in front of the County Admin building, Feb. 26, 2011.

In response to last Wednesday’s kick-off press conference for the Millionaires Tax Initiative here in San Diego, Channels 6 and 10 were careful to give well over half of the time in their stories to local right-wing libertarian anti-tax nut Richard Rider.

Rider, the chairman of the San Diego Tax Fighters, opined that:

“If people think that rich people are greedy, why would they think that they wouldn’t move out of state if the taxes got too high? . . . It’s a very interesting conflict in their reasoning.”

Richard Rider.

Other than mischaracterizing a call for the top 1% to pay their fair share to help support education and vital public services as an ad hominemattack on the greedy rich and making the evidence-free claim that an extra 3% in taxes will force Hollywood stars and CEO’s to strap their hot-tubs on their Mercedes and head for Arizona, he was spot on.

For those who are wondering, there is zero evidence to support the claim that higher individual or corporate tax rates in the past hurts job creation or forced a mass migration of afflicted plutocrats. Indeed as Warren Buffet has pointed out, there was actually more job creation when taxes were higher on the rich than they are now.

Other than observing the sadly predictable fact that almost all of the San Diego media are addicted to giving factually challenged right wingers like Rider and the omnipresent fabricator Carl DeMaio seemingly unlimited free air and press time unencumbered by fact-checking, what was most important about the report on 10 News was the last line of the story:

Rider said a better solution would be to privatize everything from prisons to libraries and reform the California pension system.”

This is where we are now: the advocates for radical privatization who are seeking to roll back the twentieth century have been blithely mainstreamed. Some readers may think that Rider’s lust to bust all the unions and “privatize everything” combined with his pity for the blighted rich are so extreme as to take him out of the mainstream of American politics, but this is simply no longer true.

 Broadcasting Live from Shit Work Nation

Recently, with far less fanfare than the Madonna halftime show during the Super Bowl received in Indianapolis, Hoosier Republicans jammed through a bill that made Indiana a “right to work” state, the first in many years.

Despite the fact that there is no empirical evidence whatsoever to support the argument that “right to work” laws create jobs, the GOP in Indiana marched forward nonetheless citing job creation as their ultimate end. Interestingly, there is plenty of empirical evidence that the kinds of non-union jobs that will follow from this legislation will be lower paying than the union jobs that preceded them and that busting unions actually may hurt job creation while weakening the middle class.

In a recent report, “Weak Unions, Weak Economy: Why the Decline of Organized Labor Makes it Harder to Revive Growth,” the nonpartisan public policy group Demos notes:

To understand how a decades-long legacy of union busting is making our recovery harder, consider the role that organized labor has traditionally played in ensuring that working people – who make up most consumers — receive a larger share of the economy’s gains and thus have money to spend consuming.

Unions bargain collectively for better wages and benefits for their members. But unions also raise compensation for workers they don’t represent: a recent study by professors Bruce Western and Jake Rosenfeld finds that by scaring non-union employers into raising wages to avoid unionization, promoting norms of fair pay, and lobbying for public policies that raise wages, unions substantially boost compensation for non-union employees in addition to their own members.

In short, high unionization boosts the share of economic growth going to working people rather than to corporate profits or the very highest earners. That is good for consumer spending given that Americans of moderate means are more likely to spend additional money than the wealthy, who already are consuming at their desired level, or corporations, which may just pile up more cash.  Unfortunately, though, unionization rates have been in decline for decades and the share of national income going to the middle class has fallen too.

Meanwhile, the proportion of pay held by the highest-income Americans has shot up dramatically: in 2007, the top ten percent of households earned 49.7 percent of the nation’s income.

Factors like globalization, technological change, and especially the demand for highly skilled workers that has put a premium on the value of a college education contribute to the divergence between the middle class and the wealthy, but Western and Rosenfeld make a powerful case that the decline of union representation was also a major influence – contributing as much as third to the growth of income inequality among working men since 1973.

Without unions or any other organized force to fight for workers’ share of economic gains, the middle class is dwindling – and so is its purchasing power. This trend was obscured during the early 2000s as Americans tapped credit cards and rising home equity to support their consumer spending. The disempowerment of working people is so complete that American workers have received just over one percent of income growth since the recession technically ended in the second quarter of 2009.

Meanwhile 88 percent of real national income went to corporate profits. “The absence of any positive share of national income growth due to wages and salaries received by American workers during the current economic recovery is historically unprecedented” pronounced economists at Northeastern University who analyzed the numbers. No wonder corporations are sitting on tremendous cash reserves and working people can’t generate enough demand to give businesses a reason to hire.

So if the economic reasoning of the Indiana Republicans doesn’t hold water, what is their real agenda?

It’s simple: if they gut unions’ ability to collect dues, they hurt the political base of their opponents, plain and simple. If it screws the middle class, so be it. The folks at GOP central know that they get a lot more campaign cash from the rich, thus the cries of angry union workers are drowned out by the cha-ching! of incoming cash. Those in the plutocrats’ club also know that (surprise!) the corporate media is doing an awful job of reporting on the real agenda of the right, so the average American doesn’t know ALEC from Adam. So don’t worry, be happy, billionaires.

Out West similar union-busting policies are being pressed by Arizona Republicans who are rushing forward to pass four bills that make Scott Walker’s assault on workers in Wisconsin look meek. Three of them would restrict the way unions collect dues and change the way workers get paid for doing union work. The last bill bans collective bargaining for all state and local workers, including cops and firefighters. Why?

According to the bill’s sponsor, state Arizona Senator Rick Murphy, “It seems as though those employees or at least the unions that represent them don’t care what the burden is on the taxpayer as long as they get theirs.”

Murphy got help crafting these bills from Nick Dranias of the Phoenix-based Goldwater Institute, a libertarian /conservative think tank. Dranias’s complaint: public-sector workers in Arizona make about 6 percent more in salary and benefits than their private-sector counterparts. Thus, the impact of this legislation will not be to bring the pay of all workers up, but rather to drag the pay of public sector workers down. And with no upward pressure on wages, it’s much more likely that non-union workers’ wages and benefits will either stagnate or decline. Take that, middle class! Hey at least the librarians and firefighters are eating shit too, right?

At the Federal level, the Republicans in Congress just held out on reauthorizing the Federal Aviation Administration until it included changes in federal labor law that make it harder to organize unions and easier to decertify them. As Labor Notes, reported:

Two years after President Obama and Democrats abandoned labor’s much-anticipated Employee Free Choice Act, they have refused to block Republicans intent on making life miserable for airline and rail workers. A bill reauthorizing the Federal Aviation Administration, voted up 75-20 in the Senate, changes federal labor law to make organizing more difficult for railroad and airline unions. New rules will make it easier to decertify unions and harder to win elections when employers merge. Only 14 Senate Democrats stood with labor to oppose the measure in a February 6 vote. One independent and five Republicans also voted against the bill. Democrats hold 51 Senate seats.

As this report observes, while the GOP drove this effort, those looking for profiles in courage from the Democrats and/or Obama have had very slim pickings. It should be said, however, that San Diego mayoral candidate Congressman Bob Filner, a senior member of the House Transportation and Infrastructure Committee, voted against the bill in committee.

Welcome to America’s Finest Tourist Plantation

Finally, our local mayoral race is crucially important if you’d like to halt the sprint toward privatization at the local level. As I have pointed out in multiple columns, frontrunner Carl DeMaio is the pure product of the right wing think tanks at the local, state, and national level and is in line with the exact kind of radical privatization that Richard Rider espouses. And if you don’t want to believe me, check out dirtydemaio.com for other sources.

Unfortunately, because of our largely barren local media landscape, DeMaio has been able to promote himself as a populist reformer rather than the tool of monied interests that he is and always has been. From his constant demonization of city workers to his assault on the living wage to his attacks on the very notion of the public sector, nobody loves kicking people when they are down more than Carl DeMaio. His history with Newt Gingrich, his time with the K Street crowd in Washington DC during the halcyon days of the Abramoff scandal, and his intensive tutelage in the halls of the corporate-funded right wing think tanks has prepared him well to bring the dream of the draconian Social Darwinist free marketeers to fruition.

While there are plenty of problems with the Democrats, locally and nationally, any political analysis with even the slightest bit of nuance would suggest that this is a race that Filner has to win or we’ll go from Enron by the Sea to the Wisconsin of the West or perhaps better yet, America’s Finest Tourist Plantation—the utopia of the libertarian right where union busting and privatization will always be on the top of the agenda and creating good paying jobs for working people or doing much of anything to help the middle class is off the table. In DeMaio’s San Diego, profit will be privatized and remain in the hands of a few while risk and responsibility will be socialized. This guy really wants to sell the commons, San Diego. It’s time to get a clue.

As of this writing, San Diego Democrats are displaying their historically predictable lack of cohesion with some, like the brain dead Democrat Lyn Schenk, shilling for local GOP establishment favorite Bonnie Dumanis or others pining after the Ken Doll of the Tea Party and Grover Norquist crowd, Nathan Fletcher. The alternative is to elect the most progressive mayor in the history of San Diego, Bob Filner. If local Democrats and progressives can’t get behind that, we’re all going to pay a very steep price.

{ 15 comments… read them below or add one }

avatar doug porter February 20, 2012 at 11:26 am

“America’s Finest Tourist Plantation” = Brilliant! I nominate this to replace “Enron By the Sea”.


avatar Russell Buckley February 20, 2012 at 12:01 pm

You seem not to understand the enormous difference between public sector and private sector unions. Private sector unions must bargain with employers who can only afford to devote a certain amount to salaries and benefits lest they become uncompetitive. Think why GM went bankrupt. There is a balance that keeps salaries reasonable or companies fail (unless rescued by the government using taxpayer $). Not so in the public sector. Public sector unions fund and therefore control most of those who approve salaries and benefits – paid for with other peoples (taxpayers) money. Virtually every public sector organization in our state is going broke because of obscene pension promises alone. Since you are into class warfare, you might want to check out the two very distinct classes that public sector unions have created within the formerly middle class – public and private sector workers. 500 City of San Diego retirees presently receive pensions over $100,000. Those pensions are paid for by those who must get by on Social Security and whatever they could save. p.s. the only way that those pensions come as close as they do to being affordable is because they are invested in one of those corporations you bash so thoughtlessly.


avatar Ian Duckles February 20, 2012 at 4:03 pm

So why is the solution to this always to make everyone worse off instead of bringing private sector employees up to the level of their counterparts in the public sector?


avatar KeninSD February 20, 2012 at 4:12 pm

Russell, your typical but wrong attack on workers is shameless! Unions didn’t bankrupt GM, or Chrysler. Poor management, poor and dangerous products and spending untold millions, if not billions, of dollars on fighting safety and environmental upgrades, did, along with lousy investment decisions.
Unions don’t make product decisions, management does, unions don’t unilaterally design and authorize labor contracts, management and labor leaders do. Management is to blame for corporate failure and resulting bankruptcies, not unions or workers.
Public employee unions bargain fairly for their pay and benefits packages, in full view of the public. Public employee unions made sure their members contributed their share of any and all retirement plans, the city elected to “defer” their contributions into some far off and fuzzy future. Guess what, their crystal ball blew up and the future they didn’t count on happened. Now they blame employees, shame, shame, shame on them, and you, for refusing to place the blame on failure where it belongs, on the management (elected politicians) that made the poor investment decisions and a public that expects services at no cost by refusing reasonable tax increases, and those who pander to this ridiculous philosophy.


avatar Domenico February 20, 2012 at 5:13 pm

If unions are causing all these problems, why is it that in Germany, where they have much stronger unions, things are just fine? Is it because in Germany they invest in education? Is it because German corporations don’t export jobs? Is it because they have have good government health care? Unions only exist because management failed to take care of its workers.


avatar KeninSD February 20, 2012 at 6:26 pm

Well said! And your comments certainly leave our boy scratching his head with how to respond! The right has never accounted for the tight coupling of successful union organization to a thriving middle class and higher standard of living for all. They deny the boom post WWII and the contrast of their union busting since the late 70’s to today.


avatar Russell Buckley February 20, 2012 at 4:32 pm

Because Ian, there is simply no way to pay everyone the salaries, benefits, and especially pensions that we give to public sector workers here in California. You couldn’t begin to milk the private sector for a fraction of what that would cost! What you end up with is an equally poorly paid group – think East Germany vs. West Germany or North Korea vs. South Korea.


avatar Russell Buckley February 20, 2012 at 4:58 pm

Kenin for sake of brevity, I will limit my comment to the public sector unions. First, contrary to what you say, the bargaining is not in full view of the public – Unions keep it secret by invoking the Brown Act. In La Mesa, where I live, pensions are contracted thru CalPers. Like most cities and districts, until a year or two ago, La Mesa employees paid nothing into the system – taxpayers paid it all. Now, after “reform” taxpayers pay about four times the amount that employees do – even though the system was designed to operate like Social Security in that cost was to be shared 50/50 between taxpayers and employees. Currently taxpayers pay three times the percent typical in the private sector to provide La Mesa public employees their lavish pensions. Have you no sympathy for the hard working couple trying to make a living by operating a restaurant – who must pay more into Social Security than public sector workers pay into CalPers – for about one third of the benefits, at a much later age — who are then are taxed to pay for the much more lavish pensions enjoyed by the privileged class. Have you no sense of fairness? Shame on you.


avatar KeninSD February 20, 2012 at 5:27 pm

The Brown Act only applies to public entities such as municipal and state officials who wish to hide their actions, not unions.

Public workers don’t have “lavish” pensions. They gave up SSI for a pension system as part of their compensation and are now being forced to abandon them for 401k plans (another rethug ponzy scheme!). As for La Mesa specifically, vote out the politicians who signed the contracts, if you don’t like them. Or, run for office yourself, and see how beating up union workers does for you. BTW, unions help keep overall pay higher, and have built the middle class that you are no doubt a part. Your restaurant owners depend on a thriving middle class to enjoy profit from their labors.

The only reasonable question here, is why you hate workers, union or otherwise. Your viewpoint shows a distinct class bias against them. If you understood public and private collective bargaining and its effect on higher pay for all workers, you would probably stop your uneducated rants against them and more local workers of all pay scales could enjoy the cuisine of your restaurants in La Mesa.

If you liked the late 19th and early 20th centuries, your hope for no union representation will bring a replay of serious class divisions, long hours for little pay, child labor and unsafe working conditions. Welcome to our past. We tried it and moved on. You might, also.


avatar Russell Buckley February 20, 2012 at 5:54 pm

Kevin – the Public officials bargain with unions – the Brown Act is used to keep negotiations closed to the public. That is a fact that even your fantasies can’t change. I enjoy an honest dialog with people who have different viewpoints- but my time is too important to waste talking to someone who only tries to “win an argument” with evasions and distortions, rather than having an honest discussion that might enlighten the issue.


avatar KeninSD February 20, 2012 at 6:22 pm

Well Russell, it was you who stated that unions use the Brown Act to keep negotiations from the public, I merely corrected you. And, typical of those whose assertions have been betrayed as wrong, you respond with the usual rightie response, nothing left to say, pretend that I’m the problem and not your point of view.

As you are such a busy guy, no doubt busy looking for support from the DeMaio camp, I wish you well in your continuing denial of the facts.


avatar johnnnym February 20, 2012 at 8:01 pm

I have never visited this site before, but rude smearing of others seems to be common in the comments section as well as the reporting section. It would be better if you talked to the issues without insulting people.

I don’t know all the details of the pension issue, but one of my neighbors who worked in the public sector brags his pension is $150K. I worked for a private company and my pension is $435/mo. I also have a 401K.

Maybe you could try to relax a little and think about whether this is fair and equitable instead of whether it protects your turf.


avatar KeninSD February 21, 2012 at 10:54 am

Well, Johnnym boy, I only respond in kind to smarmy comments that try to deflect the topic away from the failure of their remarks, as yours does at the end. I have no turf to protect, I’m just making an honest effort to respond to incorrect assertions and side with workers who are unfairly assaulted with libertarian drivel in forums like this.

As for your neighbor, good on him! His participation in his pension plan shows that it works. Your’s hasn’t, how is that his fault and why should you begrudge his honest efforts?

If you think this through, you should be asking why you haven’t done better with your retirement savings. It could be that you weren’t as diligent as he, it could be that his union protected his rights as a worker and you are alone, it could be that he earned more over his working life than you, so far.

It could be that 401k plans reward the banks with more of your cash than pensions, and you are left with playing wall street craps with the rest of your financial life, as expected by the people who designed them and forced them on American workers!

Organized workers aren’t the enemy that brings down corporate enterprise that rabid righties want them to be, they are your neighbors who wanted to provide for themselves, their families, their future the same as you do.

This economy has struggled for longer than it should. American workers, union or not, did not bring it crashing down. The emerging recovery has shown the lie that better times brings decent jobs back without a union to protect worker interests.

Have you looked at the cash that the leading public corporations and banks have in their accounts? Have you looked at the rewards they give themselves? Have you had a raise lately? If so, was it anywhere near theirs?

The issue is how the rabid right is taking away every workers rights to feed their greed by busting unions and writing laws to make organization difficult, if not impossible. The issue is your right to a decent wage.

The issue is how soon do you want the working conditions and wages in the U.S. to be that of a third world country so that international corporations can be more profitable?

That’s your choice, that’s the direction this country is going. How soon do you want to get there?


avatar ralph swanson February 21, 2012 at 9:06 am

Thanks for the article.

It may help to realize that Libertarianism seeks dialogue on complete replacement of current coercive programs with non-tax based voluntary ones as the correct engines for e.g. ending poverty, local corruption with taxes that benefit selected elites such as local activists such as Mr. Rider has identified, etc.

While there may be problems as far as local legislative prefrences for unions which pro-Libertarian activists criticize, Libertarianism stands alone in advocacy of unionism as a core right of agency. The founder of the international movement is a staunch retired union member who thinks everyone would benefit if more people belonged to at least four.

For info on how people are using voluntary Libertarian tools on similar and other issues, please see http://?www.Libertarian-Internation?al.org , the non-partisan Libertarian International Organization……


avatar The Gunny February 21, 2012 at 7:47 pm

Rider is nothing but a tool and always will. That guy is no better than bullyass Krvaric. Both of them need a boot in their collective asses


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