In his “Understanding lost jobs” column (May 18), Richard Berman’s concern for America’s unemployed was indeed heartwarming and reassuring. That is, until you realize he represents the anti-labor interests of investors and corporations.
According to online SourceWatch, Berman’s Employment Policies Institute “is one of several front groups created by Berman & Co., a Washington, DC public affairs firm owned by Rick Berman, who lobbies for the restaurant, hotel, alcoholic beverage and tobacco industries.”
Berman’s main argument was against raising the minimum wage, but he also advanced the usual corporate agenda for maximizing corporate profits and keeping wages stagnant. Naturally, he opposed high taxes on (wealthy) individuals and businesses, and government’s “half-baked stimulus schemes.”
He came up with the usual lobbyist’s conclusion: “The sooner government gets out of the way, the faster we can move ahead.” This is another way of saying that corporations and businesses should be able to do whatever they want, without regard to their own workers, the environment and the overall economy.
According to Berman, we should rely on the good intentions of corporate America and minimize government’s legitimate role of refereeing and protecting the kind of capitalist economy that benefits all classes of citizens.
Those who find his arguments persuasive should review virtually his same arguments that were used to oppose the Fair Labor Standards Act of 1938. That legislation established a minimum wage of 19 cents per hour, time-and-a-half pay for over 40 hours a week, and prohibited children under 16 from working full-time, non-farm jobs.
The Bermans of the era predicted an economic Armageddon because “socialism never works.” They claimed that, instead of reducing the 19 percent unemployment rate of the time, the added costs to businesses and industry would actually make it much worse.
Actually, the unemployment rate went down from that point on, the 40-hour workweek became standard, adults made enough money so that their children could attend school instead of having to work, and America began building the most vibrant middle class in history.
It took World War II, however, to give government the moral and political courage to adopt policies that brought a semblance of economic justice for America’s workers. To finance the war, government raised the top income tax rate to 88 percent, where it remained for the next 20 years, and instituted an excess corporate profits tax, since the war was a windfall for the military-industrial complex. It paid millions of unemployed Americans for their military service and financed the production of airplanes, tanks, jeeps, and so on. These actions developed the need for support industries and businesses, and created a huge supply of consumers with money to spend.
Investors and private industry were certainly involved, but it was a deficit-spending, high-taxes-on-the-wealthy government that stimulated an economy that benefited workers as well as investors, and that got us out of the depression. After all, investors simply aren’t going to invest in new businesses when consumers don’t have money to spend on products and services.
When Berman complains that “For low-margin businesses like restaurants, paying a dishwasher nearly $10 per hour is simply not practical,” he ignores the long-term implications of chronic low wages and the disastrous growth in wealth disparity between rich and poor.
Our country’s problem isn’t dishwashers who are making too much money; it’s the corporate CEOs, their investors, and the established wealthy and powerful who — through their lobbyists — are in control of Congress. Their major goal is to maximize corporate profits and minimize labor costs. They’ve done everything from giving us globalization — the greatest killer of good-paying-jobs they’ve ever come up with — to manipulating the prime interest rate. (If the economy is “healthy” and corporate profits are increasing, the Fed will leave the prime interest rate alone. If it is “overheating,” meaning wages are going up, it is time for the Fed to cool the economy down by raising the prime.)
Let’s face it. If you want to understand what’s going on in our economy, remember that lobbyists legally represent the interests of those who are paying their fees — not the interests of those they write about. I’ll place my money on columnists like the one Berman criticized: Bob Herbert of the New York Times, who is paid to be a legitimate journalist. That’s not to say Herbert had to be right when he recommended raising the minimum wage, but at least his professional standards did not encourage him to deliberately deceive the public.