Class War in America: the Book |
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This work is licensed under a Creative Commons Attribution-Noncommercial-Share Alike 3.0 License. Feel free to download this material for personal, not-for-profit, use. If you duplicate it for others, attribute it to Charles M. Kelly, and with a link to this site. Print copies are still available at Amazon and Barnes & Noble, and used copies are widely available on the internet. PREFACE American
capitalism was on a roll in 1962 when I started my management-consulting
career. Our country had overcome a major depression, won and paid for a
world war, created outstanding colleges and universities across the
nation, financed an advanced
education for millions of GIs, and built a huge number of effective
corporations.
People
remembered the wretched excesses of the wealthy and powerful of earlier
times and, through enlightened politicians and legislation, created an
economic system that was fundamentally fair to both investors and workers.
Not only did investors become wealthier and more numerous, but a typical
working-class American—working only 40 hours a week—could support a family
of four. The
income and wealth disparities that existed in the 1920s had been slightly
reversed in the ’40s and ’50s, and were largely stagnant in the ’60s and
’70s. Except for minorities, this was probably the best of times ever for
working-class citizens in a large country. But
that’s not all. American capitalism was beginning to have a sense of moral
responsibility. Progressive managers believed that loyalty meant
something, and that it was earned and owed, by both employee and owner.
Large companies all across the country shifted their management strategy
away from brute force, threats and intimidation, toward improving the
“quality of work life.” By
building a climate of fairness and openness, they tried to create a sense
of community. People could identify with, and take pride in, their
organizations. They saw a close relationship between their own interests
and the interests of their companies. Many
smaller companies succeeded and prospered because workers started with the
business and accepted low wages and hard working conditions. The implied
promise from the corporate executive or business owner was: “Work hard
with me, grow with me, and you will share in my prosperity.”
Since
they felt they had a stake in the business, millions of workers put their
best efforts into “quality circles,” productivity improvement teams and
special task forces to help their organizations become more efficient and
profitable. When they expressed concern that their greater efficiency
might lead to headcount reduction, they were promised that, no, that
wouldn't happen. Management
consultants like me, business owners, and high-level executives explained
that as productivity and profits went up, as technology improved and as
the economy grew, everyone would benefit. Work would become less
stressful. People would have a better quality life at home with their
families. Eventually, they would get more vacation time, better medical
care and possibly a 35-hour workweek. At
the time, I did not believe that I was lying. After all, that had been the
trend during the ’40s, ’50s, and into the ’60s. We had become a modern,
enlightened country. We believed that honest work deserved to be fairly
compensated—according to this
country’s improving standard of living, and this country’s cost of
living.
Then
the 1980s arrived with a vengeance. Apologists for the wealthy and
powerful sold a new set of values to the voting public that allowed
pro-business, anti-worker politicians to get elected. They, in turn,
changed our economy from one that benefited both investors and workers, to
one that now benefits investors at the expense of workers.
Once
the balance of power shifted totally in their own direction, the
philosophy of conservative politicians, business owners, investors and
high level executives mysteriously changed—back to the way it was
pre-1930, when fairness and justice had no place in business
decisions. With
their newly acquired set of old robber-baron values, investors can now
confiscate the wealth that workers, professionals and low-level managers
have produced over the decades and invest it outside our country—purely to
benefit themselves, and with no regard for those who originally produced
the wealth. Today,
the chief executive officer’s only responsibility is to himself and his
stockholders. Workers have the same status as machinery and are steadily
losing whatever human rights they once had. It’s a ruthlessly one-sided
arrangement. No matter how much time and effort workers spend in improving
equipment or work procedures, they don’t share in the benefits. They not
only have no vested interest in the organization, their work doesn’t
become any easier or less stressful. It
gets worse. As a work group becomes more effective, it increases the
likelihood that some of their members will be fired, and those who remain
will have to work harder than they did before, with incomes that don't
keep pace with inflation. Workers are told that “competition demands
it”—despite record corporate profits and skyrocketing incomes for
executives and investors. Of course, executives and stockholders exempt
themselves from participating in the cost-cutting competition and get
fabulously rich in the process. Although
we can’t legislate morality, we can legally require behaviors that voters
consider moral. We also can destroy the legislation that protects those
moral values, and that is exactly what pro-business politicians, both
Republicans and conservative Democrats, have done. As
a result, between 1979 and 2000, the stock market rose over 1100%, but
real wages for the bottom half of America didn’t keep up with inflation.
As Business Week put it,
What’s
happening is that a new class of left-behind workers is being created,
encompassing a large portion of the workforce. They have jobs, sometimes
with high salaries, but while their New Economy counterparts’ earnings
soar, the left-behinds are struggling to post small real gains in income.
That’s why, despite the overall prosperity, many households keep taking on
more debt…. But for the foreseeable
future, most Americans will be locked into Old Economy jobs without much
hope of big income gains.1 Unfortunately,
only about 20% of working Americans are employed in the “New Economy,”
and, as will be pointed out later, their high incomes are coming at the
expense of the 80% employed in the “Old Economy.” Of course, the investors
and high-level corporate executives in the old economy make sure that they
are largely immune to the sacrifices forced onto the low-level old economy
workers who are stuck in this country’s labor market. By manipulating that
market—as well as the technology, world trade and international investment
markets—investors and executives actually benefit handsomely from their
own industry’s decline in this country. Despite
all this, in 1999 wages for many workers started to rise faster than
inflation—by about 3-miserly-percent. Better late than never, but that
pitifully small increase is probably an indicator that our country’s
one-sided economic boom is near its end. The
recent two-decade increase in the disparity in wealth and income between
the ultra rich and the poor-and-middle-class is not, as the apologists
claim, because the wealthy work harder or are more successful on a level
playing field. It’s because corporations now have all the power, and they
have conveniently shifted their values from fairness and reciprocal
loyalty to survival of the fittest. Right
now, investors and business owners are the fittest, and fairly-paid
workers are on the verge of extinction. Admittedly, there is a benefit to
investors for their new found values: their high-level executives don’t
have to be hypocrites any more by promising that they will be fair in
their future dealings with workers. When employees are powerless, threat
and intimidation are quite effective, and artful deception is not
required. So
don’t buy the popular delusion that today’s income disparity is the result
of natural economic forces that should not be controlled. This delusion
leads to a sense of futility and the search for scapegoats, and makes it
impossible to attack the origins of the problem. Too many people blame
·
The Internal Revenue Service (instead of the Congress that shifted tax
burdens from the rich to the middle class), ·
“Big Government” (instead of the Congress that passed the free-world-trade
and anti-labor laws that sold out working-class Americans), and
·
Liberals (who, admittedly, fought for the rights of minorities to compete
with white males for jobs—but they are the same people who have always
fought for anyone unfairly
treated, including workers of all categories). All
that count in today’s economy are power and the laws that control incomes.
As we enter the new millennium, voters had better figure out which
politicians have the interests of our total society at heart, rather than
just the interests of the “educated,” the established and emerging rich,
and the powerful.
Charles M. Kelly
Tega Cay, South Carolina
April, 2000
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