The Fall of Public Workers and the Official Swan Song of the Middle Class
For the last three decades, the private sector middle class has been surgically decimated to varying degrees. The blue-collar middle-class has been beaten the bloodiest, with globalization and the crushing of unions together reducing the value of laborers to the capitalists who hire them. As a consequence, wages haven't kept up with inflation, health care plans have become less generous while still costing the employee much more, and pensions have been replaced with cynical 401K's, a synthetic pension that rises and falls with an artificially overvalued stock market which has seen zero growth in inflation-adjusted dollars for more than a decade and is poised to plummet dramatically as soon as the Eurozone collapses in a few months (or weeks or days, whatever the case may be).
It's difficult to overstate the severity of this loss of equity among middle-class households and the long-term ramifications it has on economic activity and consumerism. And anybody paying attention knows who has reaped the reward of these concessions by the fast-diminishing private-sector middle class.....their bosses and the stockholders who hire their bosses. Every last penny of economic growth of the last 30 years has been consolidated in the upper quintile of income earners, and even for those who are perversely fine with that from a moral standpoint, the macroeconomic consequences have been devastating and will continue to be as the nation's consumer base has become paralyzed. They are losing their short-term disposable income through pay cuts and higher health care premiums, and even more consequentially, they're losing their long-term disposable income having forfeited a guaranteed retirement income for a wildly insecure amusement park ride on the Dow Jones roller coaster in which only a lucky few with very good timing are gonna avoid losing their shirt.
But there's been one group amongst the middle-class that hasn't yet had to visit the financial gallows, and that's public workers, all of whom benefit from strong collective bargaining agreements even if they are not direct members of a union. Most public workers still enjoy middle-class pay with cost of living adjustments, health coverage with minimal premiums, and a pension plan. This is not to say there hasn't been shared sacrifice amongst public workers as layoffs are widespread, cost of living adjustments have been suspended, and unpaid furlough days have been required, but in general, public workers have not been endured the wholesale forfeiture of livelihood that their unambiguously destroyed private sector neighbors have. The consensus opinion among most politicians and the "liberal media" is that the solution to this problem is not to figure out a way to rebuild the private sector workers, but to tear down the public sector.
The drumbeat for the need to worsen the compensation packages of public employees has been escalating for a few years now, and last Tuesday, its chief proponents claimed their scalp when Wisconsin voters behaved as Karl Rove and David Koch wanted them to and retained Scott Walker in the gubernatorial recall election. The message has been sent loud and clear that teachers, librarians, court clerks, and snowplow drivers, among many others, have been insufficiently destroyed over the same period in which corporate America has consolidated the economic growth claimed by downsizing its private-sector workers. The solution to America's trajectory of decline, as claimed by conservative politicians, self-proclaimed journalistic wisemen, and a majority of Wisconsin voters, is for the declining purchasing power that has blighted private sector workers (or in many cases, unemployed FORMER private sector workers) to spread to public workers. If even more people have even less money, that will be the shot in the arm the American economy needs!
I've never understood this logic, mainly because it's not logic at all. In the interest of full disclosure, I am a public worker and have been for more than six years. But even a decade ago when I was a small-town newspaper writer making $20,000 a year, I shook my head at the jealousy I would hear from some about overpaid civil servants. My boss at the newspaper was a classic example, and I always thought to myself how he expected a town where every single person was a low-income worker would translate to selling newspaper subscriptions. And therein lies the fundamental flaw of cutting worker pay at any level. The economy can be compared in many ways to an ecosystem, where every action has a feedback loop of consequences. When somebody's pay is cut, their purchasing power is reduced and their economic activity shrinks. When they don't have a guaranteed pension income after retirement, the loss of future income bodes even more poorly for them to make good on their plans for retirement and the shrinkage of economic activity is even more widespread.
And that loss of economic activity is what kills the most frequently deployed justification for doing what Scott Walker just got away with and what politicians of both parties and Beltway-based commentariat want to see much more of in the future. It's always claimed that "we can't afford to maintain these pension obligations". In many cases, that's true on its face, but nobody ever turns that statement on its head and cites the equally prescient inverse of that claim....that we can't afford NOT to maintain these pension obligations. Our economy depends on a measure of economic security by its proletariat, not merely the "job creators in the climate of uncertainty" whom the right insists are the only ones entitled to a permanent climate of market confidence.
The economic security of many public workers has been one of the only hedges against further bottoming out of everything from home sales to automobile sales to holiday gift purchases. More people need that kind of security for the economy to flourish, not fewer. And the economic security enjoyed by public workers will not come close to being replaced by the hellscape that is the private sector job market. This is particularly true in the rural areas that have become the Republican party base. When a post office or government agency closes in small-town Missouri, that town's already-in-progress obituary gets carved into granite. A job market that gave us jewelry factories in Rhode Island, steel mills in western Pennsylvania, and textile mills in North Carolina now gives us Dunkin' Donuts coffee pourers, Wal-Mart stock shelvers, and nursing home geriatric ass-wipers. People who held the former jobs contributed back to the economy with their purchasing power. People who hold the latter jobs contribute orders of magnitude less with their much more limited purchasing power. Growing the ranks of the latter group is a bad thing for the economy, but those trying to decapitate public employees want to do just that.
And there are other consequences to telegraphing the deconstruction of those who work in public service, particularly those in the education field. One would have to be certifiably insane to seek a career in education with the current political climate. I wouldn't direct my worst enemy, let alone any of my children, towards borrowing $100,000 for an education degree for which they can expect smaller salaries and stingier benefits than is enjoyed by today's teachers, the blood-curdling hatred of their political opponents who exploit the fact that America is the only country in the world that educates its poor as a way of declaring most American schools are failing, and most troublingly, the loss of seniority protections that they currently enjoy because of their union. With school funding poised to be in a permanent state of crisis, teachers without seniority protections can expect an expiration date for their services of around age 50, give or take, at which point school districts will decree they are too expensive to keep on the payroll and should be replaced by a 23-year-old. And in addition, they're repeatedly getting the message that police officers and fire fighters are the "good public workers" who deserve a pension, but that teachers do not. No sane person would willfully wade into such a hostile environment, and it just might be problematic a generation from now for a culture who values its cops more than its teachers when they discover the educational talent pool is completely dry.
Across the political spectrum, it seems just about everybody believes that sticking it to public workers is a no-consequence proposition. Only good will come from all the "savings" accrued by becoming a nation of even more low-income workers, they tell us repeatedly as if somehow those savings will be passed onto unemployed factory workers. Communities and nations full of low-income workers may be known for many things, but their robust budget surpluses typically aren't one of them.
It struck me this week that my dad, a blue-collar guy with a ninth-grade education, was 38 years old when the first round of concessions and rollbacks hit his industry. As for me, a college graduate and one of the alleged members of the "ruling class" of public employees, I look poised to start getting everything taken away from me three years younger than my dad did....the only difference being that my dad's starting point was twice what mine was in inflation-adjusted dollars. When my dad and his coworkers in the meatpacking industry took it on the chin, the story for the local economy ended very badly. As public sector workers stand in line for their beatdown, the ending won't be any better. And all this reinforces my long-held philosophy that decline is inevitable when it arrives at your doorstep. Once an economy arrives at the stage where everybody except the plutocrats is engaged in rollbacks and concessions, it's already too late to save the patient. When that avalanche starts to tumble, nobody will be able to stand back up on their skis before they get to the bottom of the mountain.
It's difficult to overstate the severity of this loss of equity among middle-class households and the long-term ramifications it has on economic activity and consumerism. And anybody paying attention knows who has reaped the reward of these concessions by the fast-diminishing private-sector middle class.....their bosses and the stockholders who hire their bosses. Every last penny of economic growth of the last 30 years has been consolidated in the upper quintile of income earners, and even for those who are perversely fine with that from a moral standpoint, the macroeconomic consequences have been devastating and will continue to be as the nation's consumer base has become paralyzed. They are losing their short-term disposable income through pay cuts and higher health care premiums, and even more consequentially, they're losing their long-term disposable income having forfeited a guaranteed retirement income for a wildly insecure amusement park ride on the Dow Jones roller coaster in which only a lucky few with very good timing are gonna avoid losing their shirt.
But there's been one group amongst the middle-class that hasn't yet had to visit the financial gallows, and that's public workers, all of whom benefit from strong collective bargaining agreements even if they are not direct members of a union. Most public workers still enjoy middle-class pay with cost of living adjustments, health coverage with minimal premiums, and a pension plan. This is not to say there hasn't been shared sacrifice amongst public workers as layoffs are widespread, cost of living adjustments have been suspended, and unpaid furlough days have been required, but in general, public workers have not been endured the wholesale forfeiture of livelihood that their unambiguously destroyed private sector neighbors have. The consensus opinion among most politicians and the "liberal media" is that the solution to this problem is not to figure out a way to rebuild the private sector workers, but to tear down the public sector.
The drumbeat for the need to worsen the compensation packages of public employees has been escalating for a few years now, and last Tuesday, its chief proponents claimed their scalp when Wisconsin voters behaved as Karl Rove and David Koch wanted them to and retained Scott Walker in the gubernatorial recall election. The message has been sent loud and clear that teachers, librarians, court clerks, and snowplow drivers, among many others, have been insufficiently destroyed over the same period in which corporate America has consolidated the economic growth claimed by downsizing its private-sector workers. The solution to America's trajectory of decline, as claimed by conservative politicians, self-proclaimed journalistic wisemen, and a majority of Wisconsin voters, is for the declining purchasing power that has blighted private sector workers (or in many cases, unemployed FORMER private sector workers) to spread to public workers. If even more people have even less money, that will be the shot in the arm the American economy needs!
I've never understood this logic, mainly because it's not logic at all. In the interest of full disclosure, I am a public worker and have been for more than six years. But even a decade ago when I was a small-town newspaper writer making $20,000 a year, I shook my head at the jealousy I would hear from some about overpaid civil servants. My boss at the newspaper was a classic example, and I always thought to myself how he expected a town where every single person was a low-income worker would translate to selling newspaper subscriptions. And therein lies the fundamental flaw of cutting worker pay at any level. The economy can be compared in many ways to an ecosystem, where every action has a feedback loop of consequences. When somebody's pay is cut, their purchasing power is reduced and their economic activity shrinks. When they don't have a guaranteed pension income after retirement, the loss of future income bodes even more poorly for them to make good on their plans for retirement and the shrinkage of economic activity is even more widespread.
And that loss of economic activity is what kills the most frequently deployed justification for doing what Scott Walker just got away with and what politicians of both parties and Beltway-based commentariat want to see much more of in the future. It's always claimed that "we can't afford to maintain these pension obligations". In many cases, that's true on its face, but nobody ever turns that statement on its head and cites the equally prescient inverse of that claim....that we can't afford NOT to maintain these pension obligations. Our economy depends on a measure of economic security by its proletariat, not merely the "job creators in the climate of uncertainty" whom the right insists are the only ones entitled to a permanent climate of market confidence.
The economic security of many public workers has been one of the only hedges against further bottoming out of everything from home sales to automobile sales to holiday gift purchases. More people need that kind of security for the economy to flourish, not fewer. And the economic security enjoyed by public workers will not come close to being replaced by the hellscape that is the private sector job market. This is particularly true in the rural areas that have become the Republican party base. When a post office or government agency closes in small-town Missouri, that town's already-in-progress obituary gets carved into granite. A job market that gave us jewelry factories in Rhode Island, steel mills in western Pennsylvania, and textile mills in North Carolina now gives us Dunkin' Donuts coffee pourers, Wal-Mart stock shelvers, and nursing home geriatric ass-wipers. People who held the former jobs contributed back to the economy with their purchasing power. People who hold the latter jobs contribute orders of magnitude less with their much more limited purchasing power. Growing the ranks of the latter group is a bad thing for the economy, but those trying to decapitate public employees want to do just that.
And there are other consequences to telegraphing the deconstruction of those who work in public service, particularly those in the education field. One would have to be certifiably insane to seek a career in education with the current political climate. I wouldn't direct my worst enemy, let alone any of my children, towards borrowing $100,000 for an education degree for which they can expect smaller salaries and stingier benefits than is enjoyed by today's teachers, the blood-curdling hatred of their political opponents who exploit the fact that America is the only country in the world that educates its poor as a way of declaring most American schools are failing, and most troublingly, the loss of seniority protections that they currently enjoy because of their union. With school funding poised to be in a permanent state of crisis, teachers without seniority protections can expect an expiration date for their services of around age 50, give or take, at which point school districts will decree they are too expensive to keep on the payroll and should be replaced by a 23-year-old. And in addition, they're repeatedly getting the message that police officers and fire fighters are the "good public workers" who deserve a pension, but that teachers do not. No sane person would willfully wade into such a hostile environment, and it just might be problematic a generation from now for a culture who values its cops more than its teachers when they discover the educational talent pool is completely dry.
Across the political spectrum, it seems just about everybody believes that sticking it to public workers is a no-consequence proposition. Only good will come from all the "savings" accrued by becoming a nation of even more low-income workers, they tell us repeatedly as if somehow those savings will be passed onto unemployed factory workers. Communities and nations full of low-income workers may be known for many things, but their robust budget surpluses typically aren't one of them.
It struck me this week that my dad, a blue-collar guy with a ninth-grade education, was 38 years old when the first round of concessions and rollbacks hit his industry. As for me, a college graduate and one of the alleged members of the "ruling class" of public employees, I look poised to start getting everything taken away from me three years younger than my dad did....the only difference being that my dad's starting point was twice what mine was in inflation-adjusted dollars. When my dad and his coworkers in the meatpacking industry took it on the chin, the story for the local economy ended very badly. As public sector workers stand in line for their beatdown, the ending won't be any better. And all this reinforces my long-held philosophy that decline is inevitable when it arrives at your doorstep. Once an economy arrives at the stage where everybody except the plutocrats is engaged in rollbacks and concessions, it's already too late to save the patient. When that avalanche starts to tumble, nobody will be able to stand back up on their skis before they get to the bottom of the mountain.
posted by Mark at 8:21 PM
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