Wednesday, March 12, 2014

THE CHANGING POLITICAL ECONOMY IN THE UNITED STATES AND FLORIDA: Part I



(Two essays adapted from a talk in Fort Lauderdale, Florida, March, 15, 2014)

Harry Targ

Today’s War on the Working Class

Robert Reich has been a visible observer of the “war on poor and working families.” Recently, in a trailer from his new film Reich suggests that the “war” has been prosecuted across seven political fronts.

First, politicians in both state and national governments have opposed extending unemployment benefits for those who have experienced joblessness for long periods of time. 

Second, these same politicians oppose raising the minimum wage. 

Third, in several states governors have rejected federal resources to support Medicaid expansion under the Affordable Care Act.

Fourth, Republicans, with Democratic co-conspirators, have passed legislation (signed by the President) that included cuts in food stamp payments. 

Fifth, at the federal level the Congress has been unwilling to make decisions to invest in education and expanded job training programs.

Sixth, in addition, Congress has rejected proposals to invest in rebuilding the American infrastructure (roads, bridges, transportation facilities, and green energy manufacturing). 

Finally, in red states and Congress there has been a sustained campaign to destroy the labor movement. After a thirty year attack on unions in the private sector, in Congress, and in red states (and in some cities like Chicago) campaigns are underway to destroy public sector unions.

The War in the Florida Political Economy

Historically, the Florida economy was built on land theft; the Spanish, the British, and later North American occupiers of the land of Native Peoples. Also escaped slaves traveled to Florida in the early nineteenth century, before Florida joined the confederacy and later embraced Jim Crow segregation.

After the Civil War, the Florida economy was stimulated by growing citrus, raising cattle, railroads, and early tourism. Over the next 150 years, through cycles of growth and decay the Florida economy and population expanded. Tourism, real estate, finance, and agriculture have been the mainstays of the economy since World War I. Today, Governor Scott celebrates the fact that 94 million tourists visited Florida in 2013.
As of December, 2013 the Florida civilian labor force exceeded 7 million workers. The manufacturing and mining work force consisted of some 700,000 workers, while leisure, hospitality, education, health and other service employment totaled about 2.5 million. In 2008 the unionized work force in the state was 6.4 percent of all workers, about 2.3 percent in the private sector, and 28 percent in the public sector. 

Florida is a right-to-work state. Data show that right-to work states have less union density and consequently lower wages, fewer benefits, worse working conditions and lower wage levels for service workers, and lower wages for women, Latinos, and African Americans. As Bruce Nissen wrote in 2009 (“Benefits of Unionization in Florida: Facts and Figures,” Research Institute for Social and Economic Policy):

Even though unions are commonly associated with manufacturing, with the decline of that industry and the rise of service sector work unions have become an important way for service sector workers to maintain a standard level of wages and benefits. Unlike many manufacturing jobs, service jobs are harder to offshore and so will continue to be an important source of employment in places like Florida which depends on low-wage service jobs for a significant portion of its economy.
 
The Research Institute on Social and Economic Policy (RISEP) at Florida International University (FIU) recently published an updated report “State of Working Florida, 2013.” The report compiled a broad array of data examining changes in the economic circumstances of Floridians since 2000 as to employment, income and inequality, living costs, and poverty. In total, the authors indicate that the living standards of most Floridians have declined over the last twelve years. They report declines in employment rates, median hourly wages, and hours worked. They point out that over this period of time poverty rates, inequality, and consumer prices (including housing, food, and transportation) have increased significantly. Despite growth in state Medicaid and Temporary Assistance for Needy Families (TANF) benefits, the decline in wages and increased living costs more than overshadowed their increases. 

Critically RISEP underscored the impacts of the primacy of service sector employment (and implicitly low rates of unionization) on declining living standards for workers. “Florida’s main employers, private sector service-providing industries such as retail trade, accommodation and food services, and administrative and waste management services are contributing to the decline in the standard of living due to an overall decrease in the wages and work hours offered.” 

In addition RISEP reports that lowering real wages lead to reduced consumer spending and overall declining economic growth in the state. Low wages, growing unemployment and under-employment coupled with increased inequality all translate into economic stagnation for the many and the accumulation of enormous wealth for the few. In other words, the Florida economy needs more jobs at higher wages. This would include increased investment in “sustainable industries like wholesale trade and health care and social assistance.” RISEP could have recommended adding federal and state allocation of resources for a green jobs agenda and investments in rebuilding the infrastructure and addressing threats to the state’s environment. In the short run RISEP advocates a significant increase in the minimum wage (beyond Florida’s inadequate boost to 7.93 cents per hour), laws requiring coverage of workers’ sick leave, and new stringent laws to prevent wage theft.

The American Legislative Exchange Council (ALEC) and the Theory of the “Deep State”

ALEC was founded in 1973 by Paul Weyrich and other noted conservatives such as Senator Jesse Helms to raise money and to coordinate the creation of a counter-revolution in the American political system. Its vision was one of deregulation, privatization, weakening workers’ rights, and the facilitation of the unbridled accumulation of private wealth. The achievement of these goals required the public rejection of positive government; the idea that for societies to function public energies, resources, and commitments are needed to create and maintain  institutions to serve the people. 

ALEC established a network of prominent politicians at the national and state levels, created well-funded lobby groups,  supported “research” to justify reactionary public policies, funneled money to conservative political candidates running for office virtually everywhere and at all levels of government. ALEC created “model” legislation to be introduced verbatim in legislative bodies everywhere on subjects including right-to-work, charter schools, and privatization of pensions. While politicians pay dues to join ALEC, over 98 percent of ALEC’s  budget comes from corporate contributions from such economic and political influentials as Exxon/Mobil, the Koch brothers, the Coors family, and the Scaife family. 

ALEC claims to have 2,000 legislative members and over 300 corporate members. Corporations which have benefited legislatively from their affiliations with ALEC include but are not limited to Altria/Philip Morris USA, Humana, United Healthcare, Corrections Corporation of America, and Connections Academy.

One of ALEC’s prominent projects is the creation of the “State Policy Network,” a collection of think tanks in every state (funded up to $83 million) to generate research “findings” to justify the rightwing model legislation generated by ALEC. SPN studies have been disseminated on education, healthcare, workers’ rights, energy and the environment, taxes, government spending, and wages and income equality (Center For Media and Democracy, “Exposed: The State Policy Network,” November, 2013, p.6)
Of particular concern to workers are the ALEC model bills that have been introduced in states including:

-right-to-work legislation
-rules increasing the freedom of governments to hire non-union contractors
-reducing pensions for government employees
-repealing minimum wage laws
- eliminating prevailing wage laws for construction workers
-encouraging so-called “free trade” to outsource work
-privatizing public services
-gutting workers’ compensation

The role of ALEC, the Koch Brothers, and the largest multinational corporations and banks in America suggest that politics increasingly occurs at two levels. First, at the level of transparency, we observe politics as “games,” largely about electoral contests, gossip and frivolous rhetoric. News junkies avidly consume this first level glued to the television screen or the social network.

However, Mike Lofgren, a former Republican Congressional aid has introduced the idea of another level of politics, what he calls the “deep state.” Lofgren defines the “deep state” as  “… a hybrid association of elements of government and parts of top-level finance and industry that is effectively able to govern in the United States without reference to the consent of the governed as expressed through the formal political process.”  (Mike Lofgren, “Anatomy of the ‘Deep State’: Hiding in Plain Sight,” Online University of the Left, February 23, 2014).   Others have referred in similar ways to invisible power structures that rule America (from C. W. Mills’ 1950s’ classic The Power Elite, Oxford University Press, 2000 to Robert Perrucci, Earl Wysong, and David Wright, The New Class Society: Goodbye American Dream? Rowman and Littlefield, 2013).  

The distinction between politics as games vs. the deep state suggest that the power to make critical decisions reside not in the superstructure of the political process; the place where competitive games are played for all to see, but in powerful institutions embedded in society that can make decisions without requiring popular approval. In domestic politics, the “deep state” apparatus such as ALEC and its network of organizational ties has initiated a resource-rich campaign--from the school board and city council to the state and nation--to destroy the links between government and the people. And the public face of the deep state includes the selective and manipulative character of experts, pundits, and major sources of news in the media. 

A report from Progress Florida and the Center for Media and Democracy, November 13, 2013, identified two “front’ groups which have advocated ALEC policies, the James Madison Institute (JMI) and the Foundation for Government Accountability ((FGA). Mark Ferrulo, Progress Florida executive director, said that “…ALEC relies on conservative ‘think tanks’ like JMI and FGA to insulate themselves against increased public scrutiny and widespread exposure of the controversial corporate-driven policies they promote….Be it the economy, environment, education, workers’ rights or access to health care, State Policy Network member groups promote policies that are not only designed to fatten the bottom line of their corporate funders, but are consistently harmful to Florida.” 

Part II will address the current political responses to the “war on the working class.”