Hell to Pay: How the Suppression of Wages Is Destroying America - Hardcover

Lind, Michael

 
9780593421253: Hell to Pay: How the Suppression of Wages Is Destroying America
Hardcover
ISBN 10: 0593421256 ISBN 13: 9780593421253
Verlag: Portfolio, 2023

Inhaltsangabe

From one of America’s leading thinkers, a provocative diagnosis of the cause of America’s decline—and a searing indictment of those who caused it

For nearly half a century, Americans have been bombarded by neoliberal propaganda promoting the lie that wages are objectively determined by impersonal labor markets. This falsehood has been repeated by academics, journalists, business leaders, and politicians so often that even many on the liberal left and the populist right believe it.
 
In Hell to Pay, Michael Lind, author of The New Class War, debunks this lie. With brutal clarity, he tells the story of how bipartisan political and business interests united to smash the bargaining power of American workers and reduce wages. And with devastating insight he demonstrates that their success has indirectly caused or worsened nearly every symptom of American decline, from the increase in political polarization to the declining birth rate.
 
Calling for a revolution in the way we think about work and wages, Lind argues that the American republic will collapse if worker power is not restored. Fortunately, Hell to Pay doesn’t just sound the alarm but also offers a plan for breaking the power of the neoliberal elite and reforming America’s disastrous low-wage/high-welfare model—before it’s too late.
 

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Über die Autorin bzw. den Autor

Michael Lind is the author of more than a dozen books of nonfiction, fiction, and poetry, including The New Class War, The Next American Nation, and Land of Promise. He is a columnist for Tablet and has been an editor or staff writer for The New Yorker, Harper’s, The New Republic, and The National Interest. He has taught at Harvard and Johns Hopkins and is currently a professor of practice at the Lyndon B. Johnson School of Public Affairs at the University of Texas at Austin.

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Chapter One

The Big Lie

You Are Paid What You Deserve

In 2011, the journalist Ron Suskind quoted Larry Summers, one of the leading neoliberal economists and policy makers of the last generation, as saying, "One of the reasons that inequality has probably gone up in our society is that people are being treated closer to the way that they're supposed to be treated."

Outrageous as this remark seems, Summers was merely stating the conventional wisdom of academic economics, which is endlessly repeated by policy makers, pundits, journalists, business executives, and career counselors. This is the theory that wages directly reflect the actual contribution of each worker to the enterprise, from the janitor to the CEO. And this is the theory that underlies claims that government can and should do nothing to boost wages for workers, other than helping them acquire skills that the perfectly competitive labor market automatically will reward. If it is true, then rapid increases in the skills of the economic elite must explain why, in the last forty years, the earnings from labor income of those of the 95th percentile of American workers increased by 63.2 percent, while the hourly wages of the 50th percentile went up only 15.1 percent and wages of the 10th percentile only 3.3 percent.

This theory is false, even if the bipartisan establishment believes it. Obviously there is some relationship between skills and pay. But in most companies, government agencies, and nonprofit organizations, there is considerable flexibility when it comes to compensation. What workers are paid, along with their working conditions and benefits, depends on the relative bargaining power of workers and employers. Naturally workers want to increase their bargaining power, while self-interested employers want to diminish the bargaining power of their employees. The greatest hoax of our time is the success of employers in persuading the American public-and many American workers themselves-that bargaining power has nothing to do with pay.





There are two ways of explaining the increasing dispersion of wages in the U.S. job market: the worker power story and the human capital story. The human capital story is the one you probably heard from your economics professor and from mainstream economists, pundits, and politicians.

The human capital story says that every individual worker's wages are determined automatically and without human interference by the worker's contribution to the output of the firm or agency. The worker's economic contribution to the firm in turn more or less directly reflects the worker's personal skills or "human capital." The lowest-paying jobs? They pay poorly because they are not providing what is most valuable as a result of advanced information technology, or global markets, or some other impersonal, irresistible force.

According to the human capital story, the polarization of wages in the twenty-first-century United States accurately reflects the skills demanded by the new, globalized, high-tech economy. Automation and other kinds of technological progress have eliminated many "middle-skilled" jobs in manufacturing. What remain are high-skilled jobs in the high-tech "knowledge economy" and low-skilled jobs in "high-touch" sectors such as low-end nursing, leisure and hospitality, and retail.The human capital story is based on an academic economic theory. The marginal revenue product (MRP) theory holds that what each individual worker at a firm earns exactly reflects that individual worker's contribution to the firm's profits-not a penny more, not a penny less.

The MRP theory of wages continues to be taught by academic economists and treated as orthodoxy by most libertarian ideologues and free-market conservatives, as well as many center-left neoliberals in the United States. In a defense of welfare payments that compensate for low wages for workers, James Pethokoukis of the American Enterprise Institute invokes the theory: "Economics won't be ignored. If workers at a big profitable company only generate $10 an hour of revenue, then the company won't pay them $15 an hour."

The MRP theory of wage determination may approximate reality in a few cases. In a fast-food restaurant, it might be possible to correlate sales with how many hamburgers particular workers make per hour. But how is it possible to specify the individual contributions to the annual global sales of a multinational corporation like Boeing of an executive secretary, a vice president for marketing, and a production engineer? It can't be done.

Nevertheless, the bipartisan American economic elite has taken the human capital theory to heart. And with good reason, from its perspective. The human capital story shifts any responsibility for low wages from employers or government policies. The theory can be invoked as proof that all wages are accurate and objective reflections of worker contribution to profits, based on worker skills. It is inevitable that some nursing aides and janitors will be paid poverty wages-so the story goes. To interfere with the automatic operations of the allegedly free labor market-for example, by unionizing nursing aides and janitors or raising the federal, state, or local minimum wages-would only backfire. Therefore, if nursing aides or janitors want to improve their wages, they should not even think about collective labor action or political campaigns. Instead, they should focus on upgrading their own personal skills, by gaining more vocational or college education, and switching to a better-paid profession. In particular, they should obtain skills in STEM (science, technology, engineering, and math) vocations.

In other words, they should learn to code.





The other story-the correct one-is the worker power theory of wage determination. If wages, along with other elements of jobs such as hours and benefits, do not correspond directly to an individual worker’s measurable productivity, then how are wages set? They are set by bargaining.

We often assume that prices are set only by markets or, for some goods, by government regulation, but that is wrong. In the real world, prices can be, and often are, set by a third method: negotiation among two or more parties.

A bazaar provides an illustration. What is the price of a rug in a vendor's booth? The price of the rug is whatever the vendor and the buyer can agree on. Vendor and buyer may reach agreement only after a prolonged process of bargaining, during which the would-be buyer may threaten to walk away. The vendor may insist several times that this is a final offer before capitulating and offering a lower price to lure the departing buyer back. The point is that there is no objective price of that particular rug.

The role of bargaining in setting prices is familiar in many areas. Often a large group, negotiating as a unit, can get better prices than isolated individuals. A trade association planning a convention can get discounts for its members from a hotel. A large corporation can get discounts for health insurance for its employees that are not offered to small businesses or self-employed individuals. Labor unions seek to use collective bargaining to get higher wages for their members than any isolated individual worker could obtain.

Academic economists, along with the policy makers and pundits whom they teach, frequently claim that collective bargaining among organized labor and single or allied employers threatens economic efficiency, by raising the price of labor above its single, true market price. But in most markets of all kinds, there is no single, true market price.

Neoclassical economics is based on the idea of "general equilibrium": prices are magically and automatically set by simultaneous auctions among countless buyers and sellers...

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Verlag
Portfolio
Erscheinungsdatum
2023
Sprache
Englisch
ISBN 10 
0593421256
ISBN 13 
9780593421253
Einband
Gebundene Ausgabe
Anzahl der Seiten
240
Kontakt zum Hersteller
Nicht verfügbar
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