The Undeclared War on America's Middle Class

This excerpt is reprinted with permission from Screwed: The Undeclared War Against the Middle Class by Thom Hartmann; Berrett Koehler Publishers, 2006.

You can't be middle class if you earn the minimum wage in America today.

The American dream and the American reality have collided. In America we have always said that if you work hard and play by the rules, you can take care of yourself and your family. But the minimum wage is just $5.15 per hour. With a 40-hour workweek, that comes to a gross income of $9,888 per year. Nobody can support a family, own a home, buy health insurance, or retire decently on $9,888 per year!

What's more, 30 million Americans -- one in four U.S. workers -- make less than $9 per hour, or just $17,280 a year. That's not a living wage either.

The U.S. Census Bureau's statistics for 2004 show the official poverty rate at 12.7 percent of the population, which put the number of people officially living in poverty in the United States at 37 million. For a family of four, the poverty threshold was listed as $19,307. If the head of that family of four were a single mother working full-time for the government-mandated minimum wage, she couldn't even rise above the government's own definition of poverty.

Becoming middle class in America today is like scaling a cliff. Most middle-class Americans are clinging to the edge with their fingernails, trying not to fall. In the 1950s middle-class families could live comfortably if just one parent worked. Today more than 60 percent of mothers with children under six are in the work force. Not only do both parents work but often at least one of those parents works two or more jobs.

Middle class at 80 hours per week
In a 2005 article in the Chicago Tribune, reporters Stephen Franklin and Barbara Rose introduce us to Muyiwa Jaiyeola. Jaiyeola, who is 33 years old, works a 40-hour week as a salesman at a Sears store, then works another 20 hours in the stockroom of a Gap store in downtown Chicago. When Jaiyeola pulled two all-night shifts at his stockroom job in late August, he was able to sleep only two hours in the afternoon, then two more in the morning before going back to his sales job. He hoped to nap during his break in the middle of the night.

Jaiyeola is not hoping to get rich -- he's just trying to pay his bills. Working two jobs at this wage level is what it takes to be middle class these days. And he's not alone. According to Franklin and Rose:

Nearly 7.6 million Americans straddle two or more jobs and must find time to work, sleep and live somewhat contorted lives in a very full 24 hours. According to a 2001 U.S. Labor Department survey, most workplace moonlighters do it because they want or need extra money to pay bills ...

Those who specifically need the extra work to pay bills are most often women who take care of their families, and divorced, widowed or separated workers. For a quarter of the American work force, not only is the American dream not a reality, no part of it is.

Low wages are being paid not only to entry-level workers at places like Wal-Mart and McDonald's but also to adults like Jaiyeola who have work experience. The people being forced to work two jobs to make a living are the heartbeat of our society. They are child-care workers and nursing home workers, janitors and security guards, salespeople and stockers. They often have the most hazardous jobs, the late-night jobs -- the jobs that rarely include benefits.

Americans have traditionally believed in an economy where those who make a contribution are rewarded. A man like Jaiyeola should be able to work eight hours at Sears and then go home.

Low prices, low paycheck
Cons argue that we have to choose between having high wages and having low prices. They are wrong.

Take the case of Wal-Mart. According to the United Food and Commercial Workers union (UFCW), Wal-Mart could pay each employee a dollar more per hour if the company increased its prices by a half penny per dollar. For example, a $2 pair of socks would then cost $2.01. This minimal increase would add up to $1,800 annually for each employee.

I wouldn't mind paying more for a pair of socks if it meant that my fellow Americans would be able to pay for good health care. That would save me money because right now Wal-Mart's uninsured employees run up hundreds of thousands of dollars in bills at emergency treatment centers when their problems often could have been solved more cheaply and with better results had they been caught earlier at a doctor's office.

And I wouldn't mind paying one cent more for a pair of socks if it meant that parents could be home at night and on the weekends spending quality time with their kids. That's a real family value.

Here's what all this talk about wages really comes down to: Would you rather pay 10 percent more at Wal-Mart and get 30 percent more in your paycheck, or would you rather have lower prices and an even lower paycheck? That's the real choice: We're either spiraling up into a strong middle class, or we're spiraling down toward serfdom.

Looking at the arc of U.S. history, we discover we've been on a downward spiral ever since Ronald Reagan declared war on working people in 1981. Companies cut prices and then cut wages so they can still turn a hefty profit. Folks whose wages have been cut can't afford to shop at midrange stores like Macy's, so they have to buy at "low-wage" discount stores like Wal-Mart. That drives more midrange stores out of business and increases pressure on discount stores to send their prices even lower. To compensate for lower prices, they lower wages so they can still turn a hefty profit. On and on it goes -- until the people working those jobs are no longer middle class and have to work two or three jobs to survive.

Our choice is not between low prices at Wal-Mart and high prices at Wal-Mart. It's between low prices at Wal-Mart with lousy paychecks and no protection for labor, and the prices Wal-Mart had when Sam Walton ran the company and nearly everything was made in the United States and people had good union jobs and decent paychecks.

The choice is ultimately about whether we want to have a middle class in this country.

Why unions?

Unless you are a CEO, you don't have a lot of leverage to demand benefits at your workplace. Every year or two, you might go to your boss and ask for a raise or an extra day of vacation, but usually you can't do much about what hours you work, what health benefits you receive, or how your retirement benefits are structured. Unions give workers that leverage.

Unions are designed to give workers a voice in decisions that affect their jobs. They allow workers to negotiate with their employers for wages, health benefits, retirement benefits, and good working conditions. In the best circumstances, unions partner with companies -- both have an interest in satisfied, happy workers.

Unions create a middle class by allowing you and me to ask for the wages and the benefits we need to become or remain middle class. Unionized workers earn higher wages, have better benefits, enjoy greater job stability, and work in a safer environment. In 2003 union workers earned an average of 27 percent more than nonunionized workers. Seventy-three percent of union workers received medical benefits compared with just 51 percent of nonunion workers.

And 79 percent of union workers have pension plans. Cons have slandered unions for more than a hundred years. Professional people have bought the line that it is unprofessional to be in a union, that only blue-collar workers unionize. People worried about their status and legitimacy -- like nurses -- tend not to join unions.

But it's not true that unions are just for blue-collar workers. Unions are for anyone who wants to be middle class. Teachers are almost all unionized. Actors -- most of whom are not Sean Penn or Charlize Theron and don't get paid big bucks -- are almost all unionized. Anyone who works needs the rights that unions can provide.

Democracy in the workplace
Most of us don't think about workplace rights. We assume that because we live in America, we have all the rights we need.

There are no constitutional protections in the workplace. Most people are at-will employees, which means they can be hired or fired at will. Federal law protects you from being fired because of race, age, gender, or disability, but it doesn't protect you from being fired for saying that the boss is overworking you or the company's actions are immoral. You can't say that sort of thing in the workplace because the workplace is not a democracy.

Why does that matter?

If you can't talk freely about your working conditions, you can't negotiate changes to those conditions. If you're afraid the boss will fire you if you complain about overtime, you have no way to prevent your boss from requiring you to work extra hours.

We have a democracy in this country because the founders realized that they could not change the king of England's lousy taxation system unless they had representation in government. Democracy gives us the power to create a society that matches our needs. Democracy in the workplace allows us to negotiate the conditions of our work. It ensures that honest working people like Muyiwa Jaiyeola can be middle class without having to work 60 hours per week.

According to Thea M. Lee, assistant director of public policy for the American Federation of Labor and the Congress of Industrial Organizations (AFL-CIO), for there to be democracy in the workplace, workers must have fundamental rights. These rights include freedom of association -- which means the right to organize and bargain collectively -- and prohibitions on child labor, forced labor and discrimination in employment.

You may think that we have all of these rights now. We don't. U.S. workers have almost no right to organize. Every 23 minutes in the United States, a worker is either fired or harassed for trying to unionize. Our president goes around the world, talking about the importance of bringing democracy. We loved Lech Walesa and his union movement in Poland. But today, if the middle class is to survive, we need a Lech Walesa in the United States -- or at least some honest education about our own country's labor history.

Labor in America
Labor goes back a long way in U.S. history. In 1874 unemployed workers were demonstrating in New York City's Tompkins Square Park. Riot police moved in and began beating men, women and children with billy clubs, leaving hundreds of casualties in their wake. The police commissioner said: "It was the most glorious sight I ever saw."

Three years later, on June 18, 1877, ten coal-mining activists were hanged. That same year a general strike in Chicago -- called the Battle of the Viaduct -- halted the movement of U.S. railroads across the states. Federal troops were called up, and they killed 30 workers and wounded more than a hundred. In September 1882, 30,000 workers marched in the first-ever Labor Day in New York history. In 1884 the Federation of Organized Trades and Labor Unions was established, and it passed a resolution stating that eight hours should constitute a legal day's work. Hundreds of thousands of American workers began following that rule.

In May 1, 1886, the Knights of Labor took to the streets to call for an eight-hour day. Eighty thousand workers shut down the city of Chicago. On May 4, 3,000 workers gathered in Haymarket Square. A bomb was thrown that killed seven policemen. Eight of the people present were rounded up, tried for murder, and sentenced to death. The Haymarket riot became the symbol of labor injustice in America.

This is but a fragment of the history of the labor movement in the United States.

Matters improved when labor got organized -- but not much. In fact, by the 1920s things looked a lot like they do today: The robber barons were in charge, and the situation for working people was bleak. The rich were incredibly rich, and the few middle-class workers were deeply in debt. The labor movement appeared virtually dead.

It took the Republican Great Depression to wake people up. It took Franklin D. Roosevelt to speak the truth. If a politician said the same things today that Roosevelt did in the 1930s -- openly accusing big business of being anti-American and antiworker -- he'd be accused of socialism and communism. Very few national figures have the courage to speak out today the way FDR did back then.

Roosevelt provided courageous leadership. In his first term, he had sent to Congress the National Industrial Recovery Act, which set standards for wages and working hours and established the right of laborers to organize. This set the stage for labor groups to bargain for wages and conditions. Thanks in large part to FDR's work on behalf of labor, in the 25 years after World War II the real incomes of the middle class doubled.

Why we need a labor movement today

Today America is regressing. Middle-class income has stopped growing. The net worth of those who earn less than $150,000 per year (which includes everybody from the working poor to the highest end of the most well-off of the middle class) is down by 0.6 percent.

The problem isn't the economy. Corporations are making more money than ever. The real income of people whose net worth exceeds $100 million is doubling.

What's happening is simple: The rich are getting richer and the entire spectrum of the middle class is disappearing.

We can easily trace this decline to Reagan's first public declaration of war on the middle class when he went after the Professional Air Traffic Controllers Organization (PATCO) in 1981. He broke the back of the air-traffic controllers' union and began the practice of using the Department of Labor -- traditionally the ally of workers -- against organized labor and working people.

Reagan liked to say he was against "big government." What he really meant was that he was against Roosevelt's New Deal. He was against Social Security, the minimum wage, free college education (he ended that in California as its governor), and programs like the WPA. He believed in the discredited concept of "trickle-down" economics -- the theory that if you create a corporatocracy, the rich will nobly spend some of their money to help the rest of us. The American people don't need handouts. Our workers just want to be paid a living wage for a fair day's work. We can't count on the corporatocracy to give us what we earn, so we need a strong labor movement to give us the power to negotiate our wages and benefits. Ultimately, it's all about power.

Workplaces are not democracies -- in the United States they're run more like kingdoms. Employers have the power to hire and fire, to raise or lower wages, to change working conditions and job responsibilities, and to change hours and times and places. Workers have only the power to work or to not work (known as a strike). The strike -- a tool that can effectively be used only by organized labor -- is the only means by which workers can address the extreme imbalance of power in the workplace. And because organized labor is a democracy -- leadership is elected and strike decisions and contracts are voted on -- unions bring more democracy to America. We spend about half our waking lives at work -- at least we can have some democracy in the workplace, and a democracy means a strong middle class. ...

To-do list
The cons have almost succeeded in throttling American democracy by screwing over the middle class. To fight back we must battle on two fronts.

First, we must recognize and reclaim the government programs that create a middle class:

• Return to the American people our ownership of the military, the prison system, and the ballot box.
• Fight for free and public education that encourages critical thinking, historical knowledge, and a love of learning in each child. Combat the No Child Left Behind Act and the belief that education is a commodity that can be tested.
• Fight for a national single-payer health-care system based on Medicare.
• Fight for Social Security -- do not let it be privatized or co-opted.
• Fight for progressive taxation: reinstate a rate of 35 percent on corporations and a rate of 70 percent on the wealthiest 5 percent of Americans -- and use the money to pay back the Social Security system and to fund an economic investment program.
• Fight for a living wage and for the right of labor to organize.
• Fight for a national energy program that puts people and the planet -- not Big Oil -- first.

When America has a strong middle class, democracy will follow. The opposite is also true. To fight back, we must also make use of the ballot box. We can achieve the economic programs that make the middle class possible by using the power of our democracy to vote for those politicians who support the middle class. We've been conned for long enough. It's time to take back America.