Harry Targ
When
East Coast executives open The New York Times’ business section Sunday morning,
they’ll be greeted with a full-page advertisement hawking Indiana as a good
place to do business (Journal and Courier, January 25, 2014).
…the
number of Hoosier’s living in poverty reached more than one million,
unemployment in Indiana has remained above the national average…low wage jobs
and income inequality are both on the rise, and; post-secondary educational
attainment continues to present challenges to high-growth job creation
(Indiana Institute for Working Families, “Status of Working Families in
Indiana, 2012,” July, 2013).
Economic
Change in the United States
Fred Magdoff recently published an article in Monthly Review (January, 2014) aptly titled
“The Plight of the U.S. Working Class.” In it he describes the historic process
of capital accumulation of the wealth produced by workers. He points out that since
the industrial revolution numerous ways have been developed to expropriate more
and more of the value of what workers’ produce. These methods included cutting
wages, increasing hours of work, paying workers just enough to have energy to
return to the workplace to produce more, speed-up on the line, and using
technology to get more labor out of fewer and fewer workers. Over time
exploitation has included the use of police power to crush demands from workers
for increased public services, including education, health care, housing, and transportation,
that would “cost” the wealthy taxes, and the right to form trade unions. During
the worst of times workers’ ability to resist increased exploitation was
compounded by the existence of a desperate pool of unemployed and underemployed
workers who would be forced to accept lower wages and unhealthy working
conditions just to get employment.
As this process unfolded historically rates of
profit grew, capital accumulated, corporations and banks expanded, economies
became more concentrated in fewer hands, and corporate/banking political
influence grew. Periodically workers and their allies organized, traditional
sources of division around race and gender were broken down (particularly in
the 1930s), and the working class broadly defined gained some political power.
For a time reforms (such as the New Deal in the 1930s and the Great Society in
the 1960s) were carried out to lessen the pain and suffering of workers. As
movements grew, they inspired others to make demands on the economic and
political system that began to change the fabric of society. The most radicalized
workers, often through socialist organizations, talked about worker controlled
economic and political systems which were likely to improve the human condition
for the vast majority of the population.
Magdoff argues that workers in the United States are
currently under the most extreme pressure since the Great Depression. Since the
imposition of the neoliberal agenda during the 1980s--deregulation, promotion
of markets, cutting government programs for the many, establishing global trade
agreements, and increasing financial speculation--“capital has squeezed labor
ever harder.”
Magdoff presents data which describes major features
of the U.S. economy:
-a decline by more than half the average rate of
growth per year of GNP (from 4 percent in the 1950s and 1960s to 1.8 percent
today)
-a decline in job growth from about 2 percent per
year in the 1970s and 1980s to 0.3 percent per year over the last decade
-a dramatic increase in joblessness among those
25-54 from 5 percent in 1968 to 18 percent in 2013
- a jobless rate for women 25-54 from 31 percent in
1990 to 27 percent in 2000 to 28 percent in 2012
-for 18-24 year olds joblessness has risen among men
from 28 percent in 1990 to 44 percent in 2012 and from 38 percent to 46 percent
among women
-in all worker categories there has been an increase
in part-time over full-time work and growing numbers of discouraged workers who
have given up looking for work
-to reach a full-employment economy an additional
29.2 million jobs would be needed
-approximately 18.9 percent of Hispanics are
unemployed and 22.4 percent of African Americans
These long-term trends are correlated with
deteriorating health, stagnating wages, and rising poverty (46 million people,
15 percent of the population, lived below the poverty line in 2013)
And for the ruling class Magdoff says:
During
the economic recovery from the Great Recession the top 1 percent of income earners
in the United States has captured 95 percent of the total growth of income in
the economy. In 2002-2012 the bottom 90 percent of the population saw their
average family income (excluding capital gains) drop by 11 percent, while those
in the top 0.01 percent, that is, one in every ten thousand people, enjoyed a
76 percent increase in average family income (excluding capital gains).
Indiana’s
Political Economy
Indiana is one example of a state in which local
economic trends mirror the accumulation of wealth on one side and poverty on
the other. In fact, Indiana has been one of the worst states in terms of
providing for its population. Almost 16 percent of the state’s population lives
in poverty, including over 22 percent of its children, 17 percent of women, 33
percent of African Americans, 29 percent of Latinos, and 25 percent of Native
Americans. One-third of Indiana residents are low-income and for a decade have
experienced a decline in median household income. Even with a recent slight
decline in the rate of poverty, the number of low income Hoosiers (earning less
than 200% of the Federal Poverty Guideline (FPG) has risen since 2011. (Indiana
Institute for Working Families, 9/19/13; cited in “Slight Decrease in Poverty
Offset by Increase in Low-Income Hoosiers,” Lafayette
Independent, October, 2013).
To quote the Indiana Institute for Working Families:
“…more than 1 in 5 children live in poverty and 47 percent
are low-income (more than all neighbor states, including Kentucky); more than 1
million Hoosiers over the age of 18 are in poverty and 2.24 million are low-income;
more than 70% of Hoosier jobs are in occupations that pay less than 200% of the
Federal Poverty Guidelines – that’s less than $39,060 for the same family of
three.... we have a larger share of jobs in occupations that pay at or below
poverty wages ($19,530 for a family of three) and jobs that pay at or below
minimum wage than all neighbor states, including Kentucky; and wages have
declined for lower- and middle-income Hoosiers over the past decade, while
worker productivity has soared.” (Derek
Thomas, “Cato Study Disingenuously Presents Molehills as Mountains,” Indiana Institute for Working Families,
August 23, 2013).
As to economic inequality in Indiana:
-over the last thirty years the poorest twenty
percent of the population experienced an income decline of 6.7 percent and the income of the richest
twenty percent rose by 57.2 percent
-the richest five percent of households have average
incomes 11.9 times larger than the average incomes of the bottom 20 percent
-average income of the poorest twenty percent is
$19,100; the richest five percent averages $228,200
The immiseration of workers in Indiana has largely
paralleled the national trends described by Magdoff. Since the 1980s, the
Indiana economy has experienced significant deindustrialization--radical
reductions in the production of steel, automobiles, electronics; and increases
in wholesale and retail trade; finance, real estate and insurance; and
services. The changing economy was reflected in declining union membership
which peaked at 21 percent of the work force in 1989 and declined to 9.1
percent of wage and salary workers in 2012. (Indiana union membership as a
percentage of the total work force exceeded national membership from 1989 until
2001 and since then has declined compared to the national figure by 3 percent).
Currently, Indiana Republicans control the
governor’s office, both state legislative bodies, one of two US Senate seats,
and have 7 of nine House seats. Forty-six percent of Hoosier voters have
registered as Republicans and 32 percent as Democrats. Although Indiana is
largely a Republican state (voting for Democratic candidates for president only
four times between 1900 and 2012), half of the state’s governors were Democrats
in the 20th century. Historically Democrats have been strongest in
Northwest Indiana and bigger cities such as Gary, Fort Wayne, South Bend, and
Indianapolis (where union members and minorities were larger proportions of the
population than in rural areas and smaller cities in the Southern part of the
state). Republican strength is greatest in rural areas, central parts of the
state, and south of the capital city of Indianapolis to the Kentucky border. Democrats
controlled the Governor’s office from 1988 until 2004. Popular governor, Evan
Bayh served two terms as the state executive before moving on to the Senate.
Until 2010 redistricting, Democrats controlled the Indiana
House of Representatives. Since the 2010 election and redistricting, Republicans
control the Governor’s office and both Indiana legislative chambers. Without
the check of a Democratic controlled House, state government escalated
draconian legislation (some already in place) affecting working people: charter schools, cutting
property taxes and resources for public schools, establishing (after a long
public battle) a new right-to-work law, and privatizing public facilities,
particularly highways. Governor Daniels (2004-2012) and now Governor Pence have
served during the period of economic decline reflected in the data reported
above. Cities, particularly in areas where minorities and unions have been
strong, have been particularly devastated. Gary, Indiana has experienced
economic decline on a scale paralleling Detroit.
Finally, state and local Democratic party
organizations, with a few exceptions, have been weak and most of those
Democrats elected to public office have been more conservative than the
national party. One significant exception was the mobilization of independent
Democrats (in Tippecanoe County they called themselves ‘Yes We Can Tippecanoe’)
in 2008 to achieve extraordinary victories for primary and presidential
candidate Barack Obama. Many YWCT activists continue to work in local
progressive organizations today.
In addition, with declining union membership, the
state AFL-CIO has been considerably weakened: paid staff has declined in
numbers, national labor support has declined, and the traditionally strong
Indiana University Labor Studies Program, defended by the labor movement, was
closed down early in the new century.
Progressive
Politics in Indiana Today
In short, the Indiana economy has experienced
deindustrialization, joblessness, growing economic inequality, rising poverty
and misery, and declining support for public institutions and minimal standards
of well-being for the working class. These long-term changes have been
occurring parallel to the changing national economy, only in more extreme form.
The once vibrant labor movement in the state has been weakened dramatically.
The long-term trajectory of economic decline and worsening conditions for workers
has continued under periods of leadership of both political parties. From 2004
to the present growing Republican strength and introduction of rightwing
policies has exacerbated the pain and suffering of workers referred to above.
Despite the long period of economic decline and the
weakening labor movement in Indiana, progressives, small in number but vigorous
in energy, have continued to fight back against reactionary state governance. Activists
around the state are mobilizing around economic issues such as Medicaid
expansion and raising the minimum wage; women’s reproductive rights; saving
public education; and fighting efforts to restrict marriage equality.
(A future essay will examine political movements in
Indiana).
