[OPE-L] wages

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Fri Oct 06 2006 - 20:13:56 EDT

The War Against Wages

Should we be cheering over the fact that the Dow Jones Industrial  Average
has finally set a new record? No. The Dow is doing well largely because
American employers are waging a successful war against wages.
Economic growth  since
early 2000, when the Dow reached its previous peak, hasn't been  exceptional.
But after-tax corporate profits have more than doubled, because  workers'
productivity is up, but their wages aren't - and because companies have  dealt
with rising health insurance premiums by denying insurance to ever more

If you want to see how the war against wages is being fought,  and what it's
doing to working Americans and their families, consider the latest  news from

Wal-Mart already has a well-deserved reputation for  paying low wages and
offering few benefits to its employees; last year, an  internal Wal-Mart memo
conceded that 46 percent of its workers' children were  either on Medicaid or
lacked health insurance. Nonetheless, the memo expressed  concern
that wages and
benefits were rising, in part "because we pay an  associate more in salary and
benefits as his or her tenure  increases."

The problem from the company's point of view, then, is that  its workers are
too loyal; it wants cheap labor that doesn't hang around too  long, but not
enough workers quit before acquiring the right to higher wages and  benefits.
Among the policy changes the memo suggested to deal with this problem  was a
shift to hiring more part-time workers, which "will lower Wal-Mart's  health
care enrollment."

And the strategy is being put into effect.  "Investment analysts and store
managers," reports The New York Times, "say  Wal-Mart executives have told them
the company wants to transform its work force  to 40 percent part-time from
20 percent." Another leaked Wal-Mart memo describes  a plan to impose wage
caps, so that long-term employees won't get raises. And  the company is taking
other steps to keep workers from staying too long: in some  stores,
according to
workers, "managers have suddenly barred older employees  with back or leg
problems from sitting on stools."

It's a brutal  strategy. Once upon a time a company that treated its workers
this badly would  have made itself a prime target for union organizers. But
Wal-Mart doesn't have  to worry about that, because it knows that
these days the
people who are  supposed to enforce labor laws are on the side of the
employers, not the  workers.

Since 1935, U.S. workers considering whether to join a union  have been
protected by the National Labor Relations Act, which bars employers
from firing
workers for engaging in union activities. For a long time the law  was
effective: workers were reasonably well protected against employer
intimidation, and
the union movement flourished.

In the 1970's, however,  employers began a successful campaign to roll back
unions. This campaign  depended on routine violation of labor law: experts
estimate that by 1980  employers were illegally firing at least one
out of every
20 workers who voted  for a union. But employers rarely faced serious
consequences for their  lawbreaking, thanks to America's political
shift to the right.
And now that the  shift to the right has gone even further, political
appointees are seeking to  remove whatever protection for workers'
rights that the
labor relations law  still provides.

The Republican majority on the National Labor Relations  Board, which is
responsible for enforcing the law, has just declared that  millions
of workers who
thought they had the right to join unions don't. You  see, the act grants
that right only to workers who aren't supervisors. And the  board, ruling on a
case involving nurses, has declared that millions of workers  who occasionally
give other workers instructions can now be considered  supervisors.

As the dissent from the Democrats on the board makes clear,  the majority
bent over backward, violating the spirit of the law, to reduce  workers'
bargaining power.

So what's keeping paychecks down? Major  employers like Wal-Mart have decided
that their interests are best served by  treating workers as a disposable
commodity, paid as little as possible and  encouraged to leave after a year or
two. And these employers don't worry that  angry workers will respond to their
war on wages by forming unions, because they  know that government officials,
who are supposed to protect workers' rights,  will do everything they can to
come down on the side of the wage-cutters.

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