Beginnings 1978

Welcome to Working Class Weekly

A few words of introduction:

The Great Recession of 2006-9 prompted me to begin this blog in 2010. I abandoned it in 2012 for reasons I do not remember.

The current world wide situation as of March 2025 prompts me to go back in time again to 1978 when I first entered the factory.

Maybe my story will shed some light on how Democrats in the US lost the working-class and how Donald Trump was elected President for the second time.

Sometimes I also think of the blog as Blue Collar Economics 101.  Economics from Main Street rather than Wall Street.

The Factory:

 I lost my job of four years in 1976 due to the mid-seventies recessions.  I bounced around for a couple of years working in a Nursery, as a Park Ranger, for a couple of environmental organizations and day-care.

 In 1978 I wiggled my way into a seasonal job as a “box boy” in a factory, bringing materials to various part of the facility as needed.

 Luckily the economy improved and within months I was accepted in training for a more skilled job.

 The “Neckties”:

 The company was growing under new management and soon began to expand. To get the capital to expand, they put more pressure on the workers—as did the corporations as a whole after the recession of the mid-seventies.

 Soon men with neckties and  clipboards were walking around with timers. Clearly they were trying to find ways to lower our piece work based on a system that analyzed the times of our various movements while working.

 The moral was terrible.  We hated being watched every minute, knowing that nothing good would come from this.  We were angry. The anger turned to discouragement.

 A bunch of us were sitting together at lunch one day. My co-workers were expressing frustration with these timers.  All throughout my upbringing I could not stand the hopelessness that shows on good working-class people.  I was starting to steam.

 One of my mentors told me that you should not appeal to people on the basis of painful emotion (such as anger).  But it seemed like our lunch break needed something that would break the sour mood.

 I, on the spot, invented a tactic that I later called “hard talking”. In a growling voice I said, “They give those guys a college degree, a necktie and  a clipboard and then they come out here and make our lives miserable.  Don’t let ‘The Neckties’ get you down! ”. 

We went back to work.

 People had known me as a quiet guy to that point. And I was still a bit isolated.

 When I came in on Monday, all of the men had on their Sunday suit coats and neckties and the  women had dress pants, Sunday blouses, ear-rings, make-up etc.  All of them were working and laughing and having a heck of a good time. They looked fantastic. 

 It was quite a contradiction to the tendency to think that we were just a bunch of losers. 

 A supervisor from another section came walking through our shop, looked up and laughed at what he saw. 

 But as he kept walking through, his facial expression dropped into something like:  “Is this the beginning of a revolution?". I liked the look on his face as he chewed on that thought.

 Do not criticize a worker’s work.

 As the whole US was trying to expand and cut costs, all of the  best materials that we used were being sent oversees where workers, paid less than us, made high end products. 

 It was enough  that the poor materials make our work harder.  We were on piece work and it took more time to work with this low-quality material.  Then management made the mistake of criticizing the quality of our work.

 People in our trade were known as a rowdy bunch.  It was a brutal job.  As one of the older men said—it is a job that breaks you down rather than builds you up.

 We could tolerate a lot of abuse but one thing that our trade would not stand for was criticizing the quality of our work.

 The buzz went around during lunch. We were going to stop working in protest.

 We (there were fifty of us) demanded a meeting with the manager.  We were asking that the criticism end and that we get better materials. 

 You have to understand that we did not have a union. How could we pull this off without losing our jobs? Some of us, on our arrival, began to work on make solid relationships within our shop.  This meant finding ways to break through differences in gender, race, etc. and all of the other grudges that develop under the stresses that exist in a factory.

 But more and more people coalesced into a unit of trust with each other.

 After lunch two of the firebrands had stopped working and were glowering at the few that were still working.  This did not look good, so others of us got busy going around talking to folks.

 The firebrands said, “Well the Asians won’t back us”.  I asked “Did you talk to them?”.  “No.” (Sheepishly).

 I had been making friends with them. I asked them if they knew what was going on. They had no idea.  I told them what we were doing and why.  One translated to the others.  He then said to me that he really didn’t care about the issue.  I said, “OK I  just wanted you to know.”

 But he spoke to the others. They stopped working and began doing things like sweeping up around the benches. 

Homework for Organizing 101: "How to be the person who people will trust even if they don't agree with you?"

 By this time only one person was working, so I went over and started listing to him rant to me on how this kind of thing never works.  People never stand up for each other. I am a patient listener so when the Manager of the facility came out no one was working.

 There are more significant details to the story but one important fact:  There were no visible leaders. There was no one that the manager could fire.  He was like a cat in a barnyard with the Barn Swallows flying from each side and pinning the cat on the ground.

 That is what good organizing can do.

 We did not get better materials but the criticism stopped and they gave us a 50 cent piece rate increase for toughest shoes. 

 We laughed because we had not asked for money, just respect.  However we did not quarrel about the money.

 About six months later they fired the manager. We knew why.

 A seasoned and successful union organizer later told me that the “bread and butter” issues are not what wins union drives—it is the demand for respect.

 This I believe explains where some election drives have failed also—something to keep in mind.

 The next post will cover the Reagan Era and its impact on the working class.

 

 

 

Who is the "Middle Class" Anyway?: December, 2010

A few words of introduction:

Welcome to Working Class Weekly

The current situation world wide has prompted me to revive this blog that began in 2010 just after the "Great Recession" in the United States.

Perhaps you get your information on the economy from academics, economists, politicians and the like, but rarely from the working class--the people on the front lines of the economy and without whom the economy would collapse.  

We had a brief look at their significance during the COVID crisis. People cheered "Essential Workers". After the dusts settled, that quickly went away but the anger of much of the working class did not. We then went back to "the middle class". That didn't make a lot of us feel better either. You will hear more about that below.

We are a diverse bunch of people but there is an unrest that is becoming evident around the world.

So, Blue Collar 101--the nuts and bolts of our economic system.  Straight from the front lines.  Enjoy!

The posts below go backward in time to 2010 to 2011. 

Check them out and the next series of posts will be "A Time Line of the United States Front Line Workers from 1978 to the Present."

Who is the "Middle Class" Anyway?: December 2010

 The politicians and pundits nowadays speak about the "middle class". Where did the working class go?

This term paints us all with the same brush. The politicians and pundits hope to cast their nets as widely as possible and draw us all in around their vision and their ideology.

The reality is that that amorphous "middle class" as they characterize it is a widely diverse group of people facing a wide variety of economic conditions and challenges from elders to youth, disabled and able-bodied, the fairly well off to the constantly struggling. We are divided by race, gender, ethnicity, sexual preference, ....

The attempt is to bring us along.

I like the term "working class" for the vast majority of us.

Why? Because that is who we are--that is what we do-work--production--and our position in society as workers most closely and accurately defines our relationship to the economic system. And the economic system more than any other single factor, other than the geography and political system, influences the life that any person on earth lives.

I built my first house when I was eight. It was my great uncle's house. He was the brains behind it but everyone we could find who could swing a hammer played some role. My mother's brother did the wiring and one of my Dad's friends did the plumbing. They were not paid for their labor--we did the same thing for them when the time came.

All the men had their regular jobs and then worked on their houses or someone else's house after work or on weekends.

The women worked pretty much all of the time housekeeping or raising children. Some were also employed. This was back "in the day"--in the post WWII boom in the USA--and the division of work between men and women was different than it is today, when it takes two employed people to even come close to owning a house here in the USA.

The first job that I can remember was following my grandfather around the garden as he turned it over--by hand--in the spring. My job was to pick up worms to use for trout fishing and put them in coffee cans. I learned to pay attention to things and to be methodical. I admired my grandfather's strength even though he seemed very old to me. 

He grew up a farm boy with nine siblings and knew everything one needed to know about tending a garden. He had shoveled coal into the steam boilers on the freight trains and knew how to handle a shovel or a garden spade. When he stood on the ground he was planted into the earth like an oak. He looked like he belonged there.

Nowadays the trend is to call all workers "Middle Class". Bill Clinton was the first President I can remember who was sort of in love with calling us the "Middle Class". A few times he did talk about the working class, but the "Middle Class" has generally been more popular among our politicians and leaders because it makes it sound like everyone is making it, that everyone is doing well. 

I think this is an allusion.  I don't know if it is intentional or just the way the disconnection of those that facilitate our economic system perceive things. So the language of economics and class just drift that way.

By world standards I, as a citizen of the USA  am doing well.  I should not be complaining. But on the scale of things here in the USA I am right out there on the front lines. Many of my friends are looking up to the bottom of the "middle". I have been a front-line worker for 30 years. 16 in production work and 14 in the service industry. Such a change is the trend in the USA today and I am right with it. As is often the case that change cost me $2.50 in hourly pay. The cost of living, of holding a job, doesn't always match up to our wages.

I like the word "Working Class" better than "Middle Class" to describe me and the people I work with.  We get paid for the direct production of goods or services. The economy goes up, we work; the economy goes down, we don't work. 

I like to say: If capitalism hiccups we know it. The stock market takes a dive and the next week we may have fewer hours. Some weeks or months later we feel the layoffs. The words "Middle Class" are used to lump us all together and I think they are meant to blur some important distinction, to make us feel like we have some status or some control over our lives but sooner or later that wears off.

Sadly, I think it also puts a greater distance between us and the poor, despite the fact that during that decade of jobless recoveries it was said that nearly half of us were two weeks without a paycheck away from poverty. 

There is a subtle or sometimes not so subtle idea that if you fail in this society it is your fault.  As I said above these ups and downs are not the fault of any working class or poor person. It is a necessity of the system that there be unemployment in order to keep wages low.  I like to listen to economists.  They pretty consistently think that 4% unemployment is idea to keep our system in business.  Hhmm. At one point they were tossing around 5% as a possible ideal.  Sure that would drop wages and fuel the production for a while but then there is the problem of who will they sell their wares or services to? Racism is a cloud drifting through this quagmire.  It is easy for burdened white folks to scorn those who are still trying to rise from the effects of slavery, the Reconstruction and Jim Crow.

Maybe the scorn for the poor, is a generational thing.  My generation grew up with parents of the Great Depression.  It was tough for everyone.  My Mom knew a woman whose husband was one of those Wall Street guys who threw himself out of a window.  She had no skills other than Mom of four children and house keeper--not to denigrate that--it was just that she had no skills that paid money.  

She was clever though. She went to the library and picked out some books on fortune telling. It was a time that people were scared and looking for some hope and in this tourist town there were lots of people who were hoping to know what would happen and a fortune teller was as close as you could come to a therapist.

One side of my family barely made it through.  Family issues, pneumonia before the era of antibiotics and other issues almost did them in. I asked once to my Mom, "Were you poor?"

She said, "I suppose we were but then again everybody was (not quite true).  We got by.  People helped each other.  If you needed a quart of milk maybe your neighbor had extra. r if they needed flour maybe you could give them some."

At least in my family and in the culture of that time there was pride in being poor, being resilient, clever.  There were songs we sang lauding poor people "Oh, we ain't got a barrel of money, maybe we're ragged and funny but we travel along singing a song, side by side.    

When we first got a TV, a favorite show was "Leave It to Beaver".  Beaver was a young boy and walking along a railroad track he came along a raggedy man sitting aside the track.  They talked for a while and innocently he asked the guy, "What do you do for work?" The actor was great. His expression showed he was fighting with his shame and then he got control of his emotions, thought for a minute, and said, "I am a philosopher." 

Beaver asked "What is a philosopher?".  The tramp says, "It is someone who thinks about things." Beaver was impressed and decided that that was a great thing to be.  He told his Mom that he had met a philosopher and could he come to dinner.  She said yes and so it was.

I miss that.  It is very painful to me to see how the working class has been turned against the poor. I did not see this coming and I feel sad about the hard edge in our society now.

 I have not given up.  Apparently that gene has been passed on to me. The classes in Sunday school enforced what I saw in my family.  I am very pleased with them and myself and all of the people around me despite our differences.  I learned that there is something good about not caring very much about the idea of people being "better" or "worse."

Again...

 March 2011

Again, some media outlets (notably Forbes magazine and The O'Reilly Factor) are blaming budget crisis on politicians who "made pension promises to the public employee unions that cannot be met".

No mention whatsover that these pension funds were drained by a crashing stock market. They are trying to manipulate our anger and direct it to the politicians and to the unions and away from regulation of Wall Street. Wall Street does not want regulation.

O'Reilly says that Walker's Wisconsin is an example of how democracy works. Though he freely admits that the public is wary of Governor Walker's attack on unions. Governor Walker says his limiting of collective bargaining and paring down of union benefits will create 250,000 jobs.

Really?

Yes, this is the same supply side economics that reduced wages and benefits for workers over the last couple of decades and brought about at least one "jobless recovery". Shall we call Walker's move the last test of supply side theory?

O'Reilly says that if Walker fails to create those jobs that then he deserves to be voted out. Will he hold him accountable to that?

It is hard to see how paring down paychecks in Wisconsin will create the demand to support those new jobs.

Having O'Reilly swing his support to unions over supply-siders would be an interesting paradigm shift.

I have always suspected that O'Reilly, like many of the talking heads of the right, ride on the wave of resentmentful working class purely for personal economic gain, while being the agents of big money. If the public anger begins to shift I think O'Reilly will go wherever it leads. The Fox Network makes big money by manipulating and riding public anger.

Like Dorothy in the Wizard of Oz, I think soon the American public will see the man behind the curtain in the Emerald City of our economy. I think many of them have already. Perhaps ironically Governor Walker is to credit for making the contradictions of his economic theory more obvious.

Blue Collar Economics 101

Welcome to Working Class Weekly.

Our origins, beginning October 2010:

Let's get right down to it. It is 2010 and the world economy is still reeling from the dramatic crash of 2008. Economists have all kinds of ideas about what could be done but none of them can tell you with any certainty when--or if--things will take an upturn.

If the economists hint too strongly that there is something that is fundamentally wrong with our economic system, they will lose their jobs. Their job is to convince people like you and I that if we invest our labor and hard-earned dollars in this economic system we will come out ahead of the game.

Well, as a factory worker, I don't make those assumptions. I have seen things go south for workers for at least three decades now.

I will lose my job if I don't make my production and quality quotas and show up for work on time, but I won't lose my job if I tell you that the economic system is fundamentally flawed.

So, from the mind of a factory worker--Blue Collar Economics 101:

Many of you lost big chunks of money from your 401K. As a friend of mine said, "When you lose money in the stock market where does it go?".

Good question.

Let me share a little known fact about about this thing called a "Depression". Oh, OK, if you insist, I will call it a "recession". Not very convincing to those on the hurting end of it but I can work with it for now.

Depressions--or "recessions"--are accompanied by a dramatic transfer of wealth from those lower on the economic scale to those higher on the economic scale.

You could almost say that this transfer of wealth is one of the things that most characterizes a depression.

Before the Great Depression of the 1930's eighty per cent of farms were family owned. After the recession 30% were. This is a dramatic concentration of wealth transferred from those at the bottom of the economic scale to those at the top.

The current real estate foreclosures? Same deal. Corporate bail-outs? Same deal. More wealth being transferred--being moved away from people like you and I and concentrated in the hands of people at the upper levels of our economic system.

In the case of home foreclosures it is people's life savings being transferred. In the case of corporate bail-outs it is our tax money. No matter to those at the top where it comes from as long as they maintain their dominance in the economic system.

The A-student of Blue Collar Economics asks, "What about my 401k?". Go to the head of the class. And sorry you got burned in the recession. Same deal though. "Thanks for letting us play with your money at your expense. By the way you don't have as much as you used to before you let us invest it for you."

And don't blame yourself if you weren't the A-student. We had some of the "brightest minds" in the country telling us to invest our future in this booming economic engine.

The head of the Federal Reserve Alan Greenspan who was the nearest thing to a god in the financial world admits that he blew the call on the economy.

It is no wonder we were confused. We wanted to believe. The American dream dies hard. 

So just know--this current recession that is causing your depression is nothing new. It is the cyclical nature of a system that requires illogical growth and investment in financial instruments that have only speculative (and no inherent) value and are not regulated in any way that protects the consumer. 

It is the nature of an economy that relies on consumption and at the same time keeps the profits from getting into the hands of the consumer. Deregulation in theory reduces costs for consumers but it often comes with tax cuts for the corporations, taxes fall onto the consumers, the gained wealth is not shared with consumers which in the end lessens demand.

So the game grinds to a halt and the deck is reshuffled. Who will end up holding the cards this time? Who will rewrite the rules of the game?

We Can't Afford Teachers?

A friend posted the following on Facebook:

My son's teacher, pink-slipped

Last week, California's budget cuts put a pink slip in the hand on my son's teacher, Irma Navarette, one of the best educators I've ever met.

Robert Reich put it this way:

"Last year, America’s top thirteen hedge-fund managers earned an average of $1 billion each. One of them took home $5 billion. Much of their income is taxed as capital gains – at 15 percent – due to a tax loophole that Republican members of Congress have steadfastly guarded.

If the earnings of those thirteen hedge-fund managers were taxed as ordinary income, the revenues generated would pay the salaries and benefits of 300,000 teachers. Who is more valuable to our society – thirteen hedge-fund managers or 300,000 teachers? Let’s make the question even simpler. Who is more valuable: One hedge fund manager or one teacher?"

Only One Reason: March 10, 2011

There is only one reason for right to work legislation or limits on collective bargaining. It is to reduce the wages and benefits of all workers--union or not. No employer or politician fights for these measures so that they can raise workers wages or provide them with more benefits or to work for a fairer deal for their employees. It is all about a concentration of wealth and power.

When they remove provisions of contracts that have been negotiated with the workers it is to drive more money into the hands of the wealthy to remove the limits on their concentration of their wealth.

Regarding workers in the public sector: it is not about balancing a budget. The unions have agreed to economic concessions. Just before these take-aways from workers, tax breaks for the wealthy added millions to budget shortfalls.

It is all about transferring wealth from those who create it to those who hoard it. It all adds up to increasing the gap between the tiny minority of the super rich and the vast majority of working people.

In the end this system is unworkable. It starves our economic engine of the fuel that it needs to run--wages.

Layoffs, decreased wages, will only deepen the economic crisis.

Mark Shields on Unions: March 8 2011

"Inside Washington" on Public Broadcasting hosted a panel discussion on various issues, one of which centered around the protests in Wisconsin over the Governor's attempt to limit collective bargaining rights for state employees.

Mark Shields, a noted commentator and columnist, was uncharacteristically passionate about the role of unions in the United States.

Here is the transcript in part:

MR. SHIELDS: Let’s be very blunt. The United States workers would never have had a five-day work week, an eight-hour work day. We would never have had minimum wage laws, child labor laws, health and pension benefits, without the skill, the passion, the commitment, and the clout of organized labor. Owners and employers just didn’t voluntarily wake up one morning and say, let’s be nice to the workers. So unions made a difference in America’s landscape. Do they make a difference every day? You better believe it.

At the same time, the same people, my good friend Evan, whom I respect enormously, endorses and embraces private sector unions, which now have fallen in strength to the point where they represent one out of 12 workers. They’re defanged. They’re basically powerless, okay? When they represented 35 percent of workers, a generation ago, not Evan, but many on the right said, they were a threat to American democracy. They’re a threat to the American way of life. Now public employees have the same right to collective bargain that any employee does. And it’s that simple. How does a school teacher, a lone school teacher negotiate with the city of New York or the city of Milwaukee. You’ve got to pool your resources to do that.

…..

MR. SHIELDS: Here’s the rub. Yes. This is ground zero in the fight for collective bargaining for unions. But here’s the rub. Between 1989 and 2009, the average hourly wage – the median hourly wage for the American male fell by 2 percent – fell by 2 percent. All of the concentration was in the top 1 percent, 56 percent of all the economic growth was in the top 1 percent. Thirty six percent was in the top one-tenth of 1 percent. The bottom 90 percent got 16 percent. That’s why this tension exists right now.

People in Wisconsin have had their own lives decimated and threatened and they bought into, quite frankly, the specious argument that the enemy is not the economic system that’s rigged against them with a tax system that’s exploitative. Somehow it’s a social worker [who wants to protect her rights to collective bargaining.]

Sharing the Pain: March 1 2011

Gasoline and home heating oil prices are rising in advance of anticipated disruptions in availability.

Yet employees and pensioners are asked to accept freezes in cost of living increases for increases that have already happened.

Is there a double standard for the ordinary person vs. a huge corporation?

Exxon Oil registered the largest profit of any corporation every in the last quarter of 2009 yet there is little talk of regulation, freezes or cut-backs on government benefits for industry there. (Halts on drilling in the Gulf are being lifted even as baby dolphins drift up onto Gulf beaches.)

The people who are pushing freezes and cut-backs on wages, benefits, jobs and collective bargaining rights for the working class are against regulation of industry and business.

Public employees have to "share the pain" with taxpayers?

Can we "share the pain" with Corporate America?

Abundant Wealth: February 28, 2011

It is so strange that there are all of these budget stand-offs when we live in a country of such abundant wealth.

It is hard for me to believe that we cannot keep a disabled senior on social security pension warm in his home for the winter.

Or that a friend cannot afford to take her heart medication since she lost her job.

I walk to the harbor and look at money tied up to moorings bobbing up and down in the water and vacation homes worth millions lining the shoreline that are lived in only part of the year.

It will take a lot to convince me when a Senator or a Governor says, "We can't afford to pay these benefits or we can't keep these government employees on our payroll."

Will There Be Another "Jobless Recovery"?: December 23, 2010

Lunch conversation with some of my work mates last week was on the issue of hiring.

People were hoping that with an uptick in holiday spending, more people would be hired to help out with the work. Folks are tired from working long hours through the summer and into the peak Christmas season. Even part time workers have been pressured into cranking up their hours. Yes, it's good for paying the bills, but hard on the families--particularly parents that do not have much flexibility with childcare arrangements.

My friends were hoping that the company would hire some of the temps brought on for the seasonal rush as permanent full time employees.

My guess is that they will not.

Why do I think that? History.

The bounce back from recession of the early '00's has been called "the jobless recovery". Economic activity increased but hiring did not.

The company that we work for is a good reflection of what goes on in the country at large.

During the recession of the '00's sales remained flat. To increase profits the company decided to increase market share--to go out and grab business from their competition.

Before this time labor costs--the wages and benefits that workers receive--had made up more than half of the company's annual budget. The company decided to bring labor cost down and shift their budget toward marketing and advertising.

They made this shift by laying off employees, increasing production quotas and decreasing benefits for those who remained.

After the layoffs the budget for advertising and marketing was well over 50% and labor costs were well below 50% of the budget.

Accrual of vacation and sick pay was reduced. Employees picked up larger percentages of health insurance costs.

The government reported in the next year that US productivity increased, but that families were working longer hours to maintain the same standard of living which they had previously enjoyed.

That was no surprise to me. That was what I and my fellow employees were doing.

This trend has continued through the current period. All of this is consistent with "supply side" economics as advanced by the Regan administration in the 1980's.

The widespread corporate strategy of laying off workers of course did nothing to stimulate the economy. Though some of our competitors went out of business, company sales remained flat.

As the economy increased a little in the middle of the decade economists began to worry about "the jobless recovery". They knew that a strong recovery could not happen without either an increase in wages or an increase in employment and neither was happening.

This still remains a concern of most economic analysts.

Will the recent increase in sales and profit cause our company--and others--to hire new employees?

Most stockholders are looking for larger profits and more return on their investments to make up for their losses in the Great Recession of 2008-9. There is still great fear about the future of the economy.

Companies will be much slower I think to hire.

What incentive to they have to hire? With unemployment high labor costs are low--they have a pool of people desperate to work under any conditions.

I think companies are going to play it conservatively--still shifting their attention toward increasing market share, being competitive, rewarding stockholders and reducing labor costs.

Yes, hiring would stimulate demand and lift the economy but what corporate leader is going to go down that road? Our current economic plan encourages the short-term gain over the overall good.

In fact a report today reveals that US companies have created more jobs overseas than they have domestically. Labor is cheaper there and with the infusion of new cash flowing into foreign investments the rate of growth of those economies exceed that in the US.

This does not bode well for the worker or for the economy. The gap between the wealthy and the working class will continue to grow until we whose labor generates those profits organize and demand a greater share of the wealth which we create.

Will there be another "jobless recovery"? I do not think such a thing is possible.

What's in Your Wallet? December 7, 2020

U.S. corporations earned profits at the highest annual rate ever in the third quarter of this year.

Wow!

This is kind of making supply side economics look bad, don't you think? Where is the trickle down?

Well, Bill Gates and Warren Buffet are urging their fellow billionaires to give $600 billion dollars, or half their wealth away to charity. There's some trickle down. See, The Giving Pledge http://www.givingpledge.org

But wait? Isn't that 600 billion pretty close to the 700 billion that the top 2% of the US wealthy will get with the extended tax cuts? Hmmn. 

Even with all of that generosity there's a 100 billion net gain still going from the bottom to the top of the economic spectrum, by my reckoning.

Why not just tax the earnings of these folks?

I know, its just my opinion, but I think those earnings are a bit excessive. Let's just say that is not the way I was raised.

My co-workers and I have worked hard, built the reputation of many a company by the quality of our work and the most we ever got was $14.00 an hour.

Or the billionaires could back a living wage for their employees and those of their vendors and associates?

It would be interesting to know how many of the companies that experienced increased profits got those profits by cutting their work force this year, sending them onto unemployment and leaving the rest of their employees to work harder.

And how do you feel about receiving charity? Would you rather have a raise? Job security?

Or how about universal health insurance? It is said that 70% of Americans are for it.

Or perhaps they could dump their billions into our pension funds that have been shrunk by collapsing stock prices that came about through deregulation of securities. It would be nice to know in retirement that your pension was secure. Well, hell, most of us don't even have pensions any more. And, boy, did those 401k's take a hit in the last couple of years.

Sure it's great to put money into homeless shelters but how about a nationwide freeze on job layoffs? That would take care of a lot of homelessness. It would also add tax dollars to fight the deficit. 600 billion could go a long way to making that happen. All we are saying is that we want to keep working. Paying taxes is fun compared to unemployment. Let us, please.

I will let columnist Bob Herbert have the last word on the current economic situation:

"Recessions are for the little people, not for the corporate chiefs and the titans of Wall Street who are at the heart of the American aristocracy. They have waged economic warfare against everybody else and are winning big time.

The ranks of the poor may be swelling and families forced out of their foreclosed homes may be enduring a nightmarish holiday season, but American companies have just experienced their most profitable quarter ever. As The Times U.S. firms earned profits at an annual rate of $1.659 trillion in the third quarter — the highest total since the government began keeping track more than six decades ago."

What Would You Do with $700 Billion?: Dec 7, 2010

The Republican Party bludgeoned President Obama with the national debt figures and managed to scare the hell out of enough people to take back the Congress of the United States.

But was that just a political ploy? 'Cause now they want to add 700 billion to the debt in tax savings for the wealthiest two per cent of Americans. Hmmn.

Not Just Me December 5, 2010

As a follow up to my last post: I read in the paper today that the nonpartisan Congressional Budget Office (US) says, regarding the extension of tax cuts for the wealthy, "increasing the after-tax income of businesses typically does not create much incentive for them to hire more workers."

They go on to say that demand is the principal driver of those decisions.

Basic blue collar economics. A factory worker can tell you that.

But if you need to hear it from the "neckties", there you have it.

US Unemployment Rises Dec 3, 2010

An announcement today that US unemployment is up .2%. Republicans are going to hold up extensions of unemployment benefits until Democrats agree to give tax breaks to the most wealthy Americans.

Ending unemployment payments is not going to create the demand that the economy needs to get moving. It will only deepen the crisis.

This is basic blue collar economics.

The only news that the people at the top seem to be paying attention to is the stock market. It has gone up in the last week. And those who earn their income from stocks would really like a tax break. Perhaps they have some sense that today's market value of their stocks is not exactly money in the bank.

Snap quiz for students of blue collar economics: Which is the most important driver for the economy, the price of a share of stock or the amount of money in the wallet of the average American?

Take your best guess

Extend the Bush Tax Breaks for the Wealthy?: December 1, 2010

"Supply Side Economics" came along with Ronald Reagan. The idea was that if we take care of the wealthy they will take care of us.

Supposedly if we lowered their taxes they would invest their extra money and that would provide jobs for the rest of us. "A rising tide raises all boats." was the saying.

What actually happened was that--little known fact--the Reagan tax cuts ran up the largest deficit since the debt that funded World War Two. Social programs for working class families and poor were cut, unemployment began to be taxed and workers began to be taxed more and more for the cost of Social Security. Social Security retirement age was increased.

The first big layoffs of my career happened with the stock market crash at the end of the Reagan era.

And since Reagan took office, families are working more hours to maintain the same levels of income they once enjoyed and the gap between the richest and poorest in the nation has widened considerably. Rates of indebtedness have increased and savings decreased for the average US family.

It was called trickle-down economics but so far the flow in wealth has been the other way-- from those that produce the wealth on the front lines of industry to those who control it at the top. Executive wages have increased and bonuses gone through the roof while average families work harder to make ends meet.

The tax burden falls more and more on working and middle class families as the wealthy get tax breaks and shelters for investment income.

Extending tax cuts for the rich will not provide more jobs.

Why? Because the problem is demand. There is none. The working and middle class do not have the cash to create demand. There is no demand for goods and services and there won't be until the average family has money in its pocket.

Companies will not hire workers when there is no demand. They are not going to hire people just to be good guys. That is not what they do.

They want to get the price of their stock high and that is what they will do. They will try to grab market share, increase advertising, pay off debt, but they will not be creating jobs until the working and middle class have money to spend.

Cutting taxes for the rich will mean cutting government which will mean laying off workers which will mean less income tax revenue for governments which will lead to more layoffs which will necessitate more government cuts and less tax revenue again--a downward spiral.

All of the government layoffs will mean less demand for products and services because unemployed people do not have money to spend.

Cutting off unemployment insurance will have the same effect. No money in your pocket, no spending it--less demand for goods and services.

A downward spiral.

The supply siders said, "A rising tide raises all boats." The reality was that "a rising tide raises all yachts." Wages are the engine of the economy and this is not where the money was going.

The economy will not rebound until the flow of wealth from those that produce to those who hoard it is reversed. The money needs to flow back into the hands of the people who create it--the working class--the front-line workers of our economic system. We are not expendable, to be ignored. We are the people who support the economy and make it strong.

Overheard in the Aiport: December 1, 2020

Overheard the following conversation in the airport. A guy was talking on his cell phone to a business associate.

"No one cares about quality anymore. No one cares about the company. All they care about is the price of the stock.

"I called up ATT customer service before I left home and asked them where the hot spot in the airport is. She told me to ask someone at the airport.

"Ask someone at the airport?! Which one of the 1000 employees?

"I called Verizon, same thing. So I just walk around asking people? The company can't tell me?!

Unbelievable."

Not so unbelievable. It has become the rule. I can back this up from my experience in the factory.

It used to be that the people in charge were product or service oriented. They had come up through the ranks and knew the business from top to bottom. If something wasn't right they could see it on a walk-through and they knew what to do to fix it.

Now the folks in charge are the number-crunchers. Their figures show that if we leave out step x in the process we can save $10,000. So we leave it out. No matter that 10% of the orders get in the wrong queue. No matter that front line workers have to push twice as hard to make up for the increased error rate. No matter that customers are irate. We're showing good profits. We just pushed the price of the stock up.

You can see this on all levels. The corporate mentality has spilled over to government as well. Donald Rumsfeld lost his job as Defense Secretary because he thought he was smarter that the folks with the boots on the ground. How many soldiers lost their lives due to inadequately armored personnel carriers?

So finally the push-back from the front lines--and from the concerned parents of soldiers--forced him from his position. A rare exception to what nowadays is the rule.

Values are lost. Morale suffers. Quality is secondary. At what point do we as a society lose our integrity? The quality of our work? Pride? What will it take to get it back?

A Fable: October 26, 2010

In my previous post I talked about what happens when an economy takes money from the consumer and concentrates it in the hands of those at the top of the economic spectrum.

Simple math--you can't run a consumer economy when consumers have no money to spend.

I also talked about the flaws within a system based on speculative investment with no inherent value other than its market worth. (Can we say "junk bonds", "hedge fund", "derivatives"?)

Pick your decade of the last several. There was a financial instrument in that decade driving the market that crashed and burned. The tech bubble saw 100 fold increases in stock prices for companies that had not yet put a product on the market. Hhmm.

You don't need to understand what these financial instruments were. You do need to know that if you had a 401k that you probably had your money invested in them--speculative, unregulated financial instruments. That was what used to be your pension going down the drain. And there is probably another one coming right around the corner.

So think twice before you jump on an offer that looks too good to be true. Maybe it is. 

As I said recessions represent a cyclical transfer of wealth from those who earn it (you and me) to those who accumulate it (the oh, so precious few).

I felt stupid in the 80's when my friends were scoring big in stocks while I stuck to bonds. Then not so stupid in the 90's and 00's when my friends lost big chunks of their life savings in a series of market crashes. I barely lost a cent in all of those years. 

Here is a fable for those that think they are too stupid to understand economics:

A peasant saves the life of a king from what could have been a horrible accident. 

In gratitude the king offers to give the peasant his golden carriage.

The peasant says, "I cannot afford to keep a horse so I have no need for your carriage your highness."

The king offers him 1000 acres of fertile farmland. The peasant says that he can barely maintain the small plot that he already works and has no need for more .

The king makes several more offers of extravagant gifts. The peasant turns down all of them.

Finally the king, in exasperation, cries, "Well, you have saved my life, I feel I owe you something. What would you like?".

The peasant thinks it over for a moment. He asks the king if he has a chess board.

The king says, "Yes."

"I would like you to put a penny on the first square on the first day of next week. On the second day, double that amount on the next square. On the third day double that amount on the third square and so on until all the squares on the chess board have been used."

The king is confounded. "Are you sure that is all you want? I have many riches."

The peasant says, humbly, "No, I was pleased to have simply saved your life, but since you insist, this is all I ask."

The king shook his head and finally agreed.

The king put on penny of the first square on the first day, two pennies on the second day, four on the third, eight on the fourth and so on. 

By the end of the month he was forced to sell his team of horses. By the end of the chessboard wager he had surrendered all of his land and riches.

The peasant of course lived on a tight budget and understood simple mathematics. 

The king, may it be said, had so much wealth that he had lost sight of obvious economic principles.

According to the fable, that peasant lived a comfortable life, gave away much of his money, offered the king respectable work and people in the village were content for many, many years.

Sometimes its the person at the bottom of the barrel who has the clearest view of the situation.

This fable illustrates the logical fallacy in chain letters.  If you do the math your numbers run up very quickly and the whole scheme becomes unsustainable.

In the economics world there is a financial device called a "Ponzi scheme" and is declared illegal.

President Obama is having a heck of a time making some of the highly questionable practices, that got us into the current mess, illegal. Of course he can't even change the wall paper in the White House without being attacked by the people who benefit by keeping things they way they are.

There are many lessons in the fable. One of them is: Don't underestimate a peasant. Another is: Do your math.

Another is: Read Working Class Weekly for other valuable lessons in Blue Collar Economics.