Corporations – Unspoken Politics

Principle Five: An invitation for radical economic democracy

I’ll be out of the state for 2 1/2 weeks starting Sunday, so full posts will be rare or non-existent. Since I’ll be headed to a scenic part of the world, I’ll take nice pictures and write as much poetry as I can.

I’ll be giving the guest sermon at my local Unitarian Universalist congregation in mid-September. Part of it is already written, there is still quite a bit of research to be done, primarily religious history reading. There are a lot of parts to tie together, which is encouraging. Ideas are not a problem, it’s just a matter of number and order.

At its core, this is a meditation on the fifth principle of Unitarian Universalism, where we triumph “The right of conscience and the use of the democratic process within our congregations and in society at large.” In particular, the last five words, “in society at large” are of deep interest to me.

That is an incredibly radical statement, far more than is acknowledged. If UUs are to promote democracy in society at large, it goes far beyond traditional electoral government. In terms of time invested over a lifetime, the economic system is far more present than all the campaigns, referendums, and voting days combined. There is no way to deny that the American economic system, capitalism of a vast size and scale, is a critical part of society. In 2014, it is also undemocratic. Large firms are highly resistant to public opinion, and voting power is decided by investment- which scales with wealth. If you own stock, you have a stake in a publicly-traded company. If we are honest, everyone has a different kind of stake in the actions of these companies. Their pollution, their political donations, their treatment of workers and communities. We are socially taxed with representation.

As written, principle five is calling out for economic democracy. Meaning a system where the workers and the decision-makers were the same people. Such a shift would go beyond reform, it would ditch the economic structure and start from scratch. Not that this is unheard of- America like many other countries has a tradition of co-ops and collectives, just not on the national and international scale. The nice things about UUism is the built-in radical instinct.

The UU congregations and fellowships are aggressive with their external pressures, as divestment from fossil fuels was passed at the General Assembly this year. Boycotts have been used in the past and should continue against anti-LGBT and anti-union organizations. Social change often requires economic change- in the case of the Civil Rights Movement desegregation applied not only to public schools, but the private enterprise of Southern society.

The core structure of a traditional enterprise is oligarchical, where the board that regulates the executive often share members. I’m trying to dig down into the religious history of opposing economic elites and keeping certain things beyond the reach of money. Driving the money changers out of the Temple and driving the insurance companies away from healthcare are moving on the same axis. Part of true democracy is keeping the political, electoral democracy strong and robust.

So it’s interesting working through the whole issue. What is the democratic process? Different countries have different methods of voting and different political cultures. What is society at large? What does that exclude? Individual conscience and collective will are often in conflict, that is another dicey subject.

This is the beauty and the madness of the seven principles. Each covers a vast swath of belief and conviction. The madness is the vagueness, but the beauty is that you can get lost in each one and test the limits of your mind and soul. When I give my sermon in two months there will be those that accept my definitions and implications, and those that don’t. Our parish minister has to deal with that with every sermon she makes.

Never before have such a project been put before me. Public speaking is one matter, a matter I’m comfortable with. Context is important, though. This is like a final project presentation, but instead of competing for points I’m searching for engagement and understanding. I’m excited, and hope it will be a chance for personal growth and contribute to the growth of the congregation at large.

Turning the tide: the fight for a $15 minimum wage

Income growth distribution. Source: http://news.good.is/beg-borrow-steal/econographic#%21/2

There is a war going on in the Pacific Northwest. It has garnered some national attention, and cities across the country will be influenced by the result. Which side wins, and whether they get most of what they initially wanted, will ripple across the nation.

Seattle is debating a $15 minimum wage.

This is an extraordinary fight, because it was linked to an extraordinary campaign. Kshama Sawant, a member of Socialist Alternative, defeated a sixteen-year Democratic incumbent to win a seat on the Seattle City Council. I’ve written about Sawant several times (here was my pitch prior to the election), and her success is one of the biggest events in the American left since the McGovern campaign. The whole campaign was tightly bound around a single campaign promise- a $15/hr minimum wage.

Her victory, against the grain of traditional Seattle politics, indicated that popular sentiment was on the side of her campaign and the organization she helped found, 15 Now. Seattle is joined by San Francisco in pushing for a ballot initiative. The engine is Seattle though, with over a year of constant campaigning. Pressure has given the proposal wide political acceptance, even among business-friendly Democrats.

The split between worker productivity and worker wage increase

The argument is straightforward. Since the end of World War II-era price controls, worker productivity has increased substantially, but since the Nixon Administration is no longer matched by increases in wages. This era has also been one of sharply rising costs- education, healthcare, rent. I’ve drawn a grasp with permanent markers to give you the result. No, seriously:

A simplified graph of wages vs. costs since 1970

The minimum wage isn’t tied to inflation, so it buys far less than in decades past. Increasingly, those that make minimum wage (or close to it) no longer have a living wage. They can’t afford to raise their kids, or live anywhere near where they work. Thus they rely on two things- credit and welfare. There are plenty of people working crazy hours yet still in the economic strata to require welfare to make basic ends meet. Without a strong wage, the taxpayers are footing the bill for underpaid workers.

There are two broad concerns at play in Seattle. The first is about the minimum wage as a whole- that it kills business, competitively, leads to unemployment. I tackled these broad issues last August here. I found there to be a lack of solid evidence that the minimum wage is a great harm to society- people often say that it is, but they’re relying on the standard (typically called ‘neoclassical’) model, which actually isn’t that accurate. We’ll return to that thought.

The second are the specifics of the wage increase. Basically, who has to increase to $15 and by when? Originally the idea was an increase from all businesses immediately. The version that’s being filed and will probably get voted on soon has a three-year lead-in for small businesses and nonprofits. $11, then $13, then $15.

In terms of a debate, the place I’ve found with the most content dedicated to the issue is The Stranger, Seattle’s sweary alternative newspaper. They strongly endorsed Sawant (dedicating an issue to making a case for her), but they’ve been releasing editorials in pairs- one advocating for an exception, one against. Currently, four pieces on the minimum wage are in the “most commented” section on the front page.

This is a bitter fight. Big businesses (especially those for which most of their staff make under $15) are fighting tooth and nail- and sometimes use small businesses as a front to advance their own interests. There is clear evidence in leaked documents. This is nothing new, but it’s important to pay attention.

While not anything close to an expert, I’ve taken enough college economics to have a decent grasp of minimum wage mechanics, as one of the basic aspects of the labor market. There has been quite a lot of misleading statements- and one would assume that if San Francisco and Seattle ultimately succeed, they will pop up again and again as the fight moves to other areas.

A number thrown out in the debate is 60%- the increase from the current state minimum wage of $9.19 to $15. Often the proposal is said to be a “60% increase in labor costs.” That’s not even close to true. What’s important to know is that essentially no business pays every worker minimum wage. If they did, it’d be 60%, but if people are making $10.50 or $12.75, it’s a lot less than that. Also there are plenty of workers who make over $15 in a given enterprise who won’t see any increase- at least directly.

$15/hr protestor in New York City. Peter Foley/EPA

Another issue is distorting costs. While labor costs are important, they sit alongside the cost of land, rent, licenses, legal and financial assistance, and of course whatever a business sells. The best read of The Stranger editorials is this one by bar owner Andrew Friedman. He got an overwhelming pushback by commenters, including several who work for a small business. As an accountant stated, if their firm raised all employees to $15 it would be a 4.33% increase in costs. There’s a big difference between 60% and 4.33%. While all cost hikes will affect total costs, labor is not all of a businesses’ costs.

A proposal has been made to include “total compensation”. A series of essays go back and forth starting here. What’s wrong with $15/hr total compensation? Well, a few things. It allows the employer to include (and overvalue) other non-wage benefits. Given the rapid rise in health care costs, this could easily eat into the actual wage earned until there is no rise at all. And it gives employers a great amount of power- they figure out the costs, they determine what total compensation is. You can’t make a good argument for wage theft because the wage has no solid meaning anymore. It’s just part of the total compensation soup.

The reality is simple. Large corporations, that employ a huge amount of minimum wage workers, are skating thanks to government subsidy of their business (sweetheart tax deals, plus tax loopholes) and government subsidy of their workers. The end result is incredible US corporate profits. A move towards a $15/hr minimum wage is recognizing that there is no disaster for American corporations if labor starts closing the gap between what it produces and what it is ultimately paid. It’ll throw a wrench into the economic idea that profits must constantly rise and increase- the system where shareholder concerns are much more pressing than labor concerns. But that sort of escalating system also causes destructive market bubbles, so maybe it needs a wake-up call.

Source: http://qz.com/192725/what-another-record-year-of-corporate-profits-means-for-the-us-economy/

I’m tired of people making hackneyed economic arguments that don’t have a solid foundation beneath them. The dangers of a high minimum wage are a meme, perhaps exacerbated by the fact that most introductory economics courses are strongly slanted to that conclusion. As I pointed out in a rebuke of Alex Berezow’s ill-suited attack on Sawant, many journalists and pundits don’t cite anything more complicated than N. Gregory Mankiw- often just leaving it at ‘common sense’.

Serious discussion is due for the minimum wage. Each month brings new depressing confirmations- income inequality is soaring, it’s reversing decades of gains by the middle class, people are getting wrecked by increased costs and don’t have the money to save, invest, and eventually retire. When a movement emerges that actually offers a potential solution, efforts must be made to understand it from their perspective. US journalism tends to start from the perspective of how a new policy will affect corporations.

Perhaps they should think of how the lack of a new policy current affects workers and families.

The hot-pink criticism shield

My friend Gavin and I are two of the few who still use AOL Instant Messenger over newer forms of communication. Looking over years of chat transcripts- and our reaction to all sorts of landmark news events and societal tends- it is clear that we in some sense compete to see who can be the most cynical about things. Sometimes our reflections are stupid and silly, but other times they make me pause and think.

A week ago Gavin muttered “most products sporting a pink ribbon are carcinogenic in some way.” It lined up this scattered unease I’ve had about awareness months, and the October one for breast cancer in particular. Cancer research is about as bulletproof as a cause can be, but I think some groups use it as a shield and a publicity device. It breaks down into two main problems I have:

Gavin’s point. The month is full of major corporations switching out their traditional colors for bright pink. But like how dirty companies have hid behind environmental rhetoric and advertising (greenwashing), the “good work” these companies are doing raising awareness (and donating a very small amount to charity) helps deflect an underlying criticism. Many of the chemicals, cleaners, building materials, and food they produce are carcinogenic. You may have seen a pink water bottle touting the cause. The problem? It was likely made with bisphenol A (BPA), a dangerous carcinogen linked to breast cancer. The Susan G. Komen Foundation, which is the vanguard of these awareness movements, has served as a kind of buffer to inhibit responsibility. As a 2012 story states:

BPA-peddling corporations have deflected that responsibility by donating to organizations like Komen, which states on its Web site that at this time, there is no evidence to suggest a link between BPA and the risk of breast cancer.

While Komen is not a denialist organization by any means, it is part of a trend where they are slow to recognize new research that happens to clash with their multimillion-dollar corporate sponsors.

If I were to make a bold political statement, I would say that industrial capitalism and cancer treatment and prevention charities are not on the same side. They never are. But they’ve been melded in a way that benefits the business side while working against the goals of the philanthropy side.

2. The tone of this awareness month is weird and disingenuous to many women living with a diagnosis, or dreading a future one. Amanda Vodola writes in the Youngist about her experience with breast cancer and her feelings on the movement:

I know people have good intentions when they don a pink ribbon, but people rarely realize that the symbol originated from a corporate-sponsored study group asked to pick a color that made them think “happy”. The result was pink. There is nothing happy about breast cancer, and someone wearing a ribbon does not provide the support I want or need.

Again we come back to corporatism. Study groups to gauge happiness makes sense when you’re drawing up EuroDisney- when it’s related to a serious form a cancer, it’s disconcerting. Vodola also brings up something I noticed a few years ago when participating in a Relay for Life and saw a team sporting “Save Second Base” shirts. The disgusting sexualization of disease:

I can’t even begin to articulate my rage when I see “Save the Boobies” and “Save the Tatas” printed on t-shirts and bracelets, as if sexualizing a disease is the only way to make people – in this case, the target market of straight men – care that female-assigned people are dying from cancer.

It’s not about tits. It was never about tits. It’s about people dying, mostly women. In much of the world, there is still almost no treatment available, and women are dying in a painful, disturbing manner.

Years ago, when in I was in high school, Invisible Children became a very big organization with a lot of support from my demographic- rich white kids growing up in a progressive area. It too was all about “raising awareness.” But people who were paying attention (before and after KONY 2012), realized that it was a sham. The group spent very little of its huge budget on helping African children, and its whole mission was deeply flawed. Both Invisible Children and Breast Cancer Awareness Month have the basic fact in common- they stand for (or against) things universally seen as important. This also makes them impervious to a lot of criticism that they would otherwise get. But both are at some level absurd and contradictory. That image- a hot-pink sports bottle laden with BPA, or hot-pink makeup full of parabens- is grotesque.