Class Warfare in America by Bill Moyers, Part 3

Let me tell you about the Stanleys and the Neumanns. During the last decade, I produced a series of documentaries for PBS called "Surviving the Good Times." The title refers to the boom time of the '90s when the country achieved the longest period of economic growth in its entire history. Some good things happened then, but not everyone shared equally in the benefits. To the contrary. The decade began with a sustained period of downsizing by corporations moving jobs out of America and many of those people never recovered what was taken from them. We decided early on to tell the stories of two families in Milwaukee -- one black, one white -- whose breadwinners were laid off in the first wave of layoffs in 1991. We reported on how they were coping with the wrenching changes in their lives, and we stayed with them over the next ten years as they tried to find a place in the new global economy. They're the kind of Americans my mother would have called "the salt of the earth." They love their kids, care about their communities, go to church every Sunday, and work hard all week -- both mothers have had to take full-time jobs.

Mr Moyers may have started following them in '91 but that's not when the 'first round of layoffs' was. That was the third round. The first was 4 years before that at the end of Reagan's second term when the push to keep the Reagan-era profits of 20%+ was on. That first round would have been a lot more dislocating if employers had actually been laying people off, but they weren't. What was happening was that a fad ran through the corporate halls, and the fad was a trick: wages go down when jobs are scarce, right? But jobs weren't scarce. How do you fix that little problem? Pretend they are.

Employers started complaining that profits were down (by which they often meant, as we found out later, that profits hadn't grown by as much as expected) and that wages were too high, they were having trouble meeting the payroll, and there might have to be layoffs. Once that frightening prospect was in everybody's head, they started the layoffs, most of which were centered on blue-collar rather than white-collar employees. The layoffs lasted anywhere from a couple of weeks to a few months, depending on how long the company thought it could get by short-staffed. Then would come the calls: 'We want you to come back to work but you'll have to work for half what you were getting before or we're going to go under. We can't afford to pay so much any more.' We believed them and most of us went back to work--at half pay.

One manufacturer of tools, the biggest employer in my area (was then, still is), was making a profit of $70-100Mil/yr when it pulled this stunt, and it cut its average pay rate from $15/hr to under $8 in one fell swoop, and this was for skilled labor. Its unskilled rate dropped from $7.50/hr to the minimum wage--$3.10/hr at that time, if memory serves. The payroll cut boosted the company's earnings all of 3%, but that was what they needed to meet the promises they'd made to investors and expectations on Wall Street. Their stock went up--by 8 cents. The program was considered a great success.

The second round was 1989-90, when employers were looking for another shortcut to boost their stocks. Blue-collar wages had been permanently depressed (they've never come back) by the first scam, so what they needed to do now was cut the white-collar payroll. First they made across-the-board cuts in all depts, 10-20% usually, but the cut was concentrated on older employees at higher salaries. They weren't cutting positions, it turned out, they were removing--firing--55 and 60-yr-old men at the high end of the salary spectrum in order to replace them with recent college grads at entry-level salaries (which is why the unemployment rate didn't skyrocket despite the massive layoffs--many of the workers they fired were replaced by cheaper ones). This was the tactic that started Jack 'The Axe' Welch on the road to corporate fame and fortune.

The third round--the round Mr Moyers is talking about--was the most brutal. Technological advances had kicked in and this time the jobs disappeared for real. But that wasn't going to be enough to give the corporations the boost they wanted, so they began claiming poverty in order to cut benefits--health care plans like BC/BS which covered practically everything were dropped in favor of health care plans with cheap premiums that covered almost nothing, and even then the burden of paying the premiums was shifted to the employees--companies that had been paying it all now paid half, companies that had been paying half now paid 10%--or even stopped contributing to the cost altogether; and worst of all, a lot of companies outright stole their employees' pension funds, shifting them over to a general fund so they'd be available. Millions of middle-aged men and women discovered overnight that the pensions they had counted on for their retirement were gone, absorbed by the companies. This was supposed to be--and was--illegal, but few suits were brought, and the Bush I DoJ did NOTHING to discourage the tactic. At the end of Bush I's only term, corporations had boosted their earnings by $Billions$ stolen from those pension funds and Poppy was crowing about how 'good' the economy was.

That's where we were when the Stanley's and the Neumann's got sacked.

During our time with them, the fathers in both families became seriously ill. One had to stay in the hospital two months, putting his family $30,000 in debt because they didn't have adequate health insurance. We were there with our camera when the bank started to foreclose on the modest home of the other family because they couldn't meet the mortgage payments after dad lost his good-paying manufacturing job. Like millions of Americans, the Stanleys and the Neumanns were playing by the rules and still getting stiffed. By the end of the decade they were running harder but slipping behind, and the gap between them and prosperous America was widening.

What turns their personal tragedy into a political travesty is that they are patriotic. They love this country. But they no longer believe they matter to the people who run the country. When our film opens, both families are watching the inauguration of Bill Clinton on television in 1992. By the end of the decade they were no longer paying attention to politics. They don't see it connecting to their lives. They don't think their concerns will ever be addressed by the political, corporate, and media elites who make up our dominant class. They are not cynical, because they are deeply religious people with no capacity for cynicism, but they know the system is rigged against them. They know this, and we know this. For years now a small fraction of American households have been garnering an extreme concentration of wealth and income while large corporations and financial institutions have obtained unprecedented levels of economic and political power over daily life. In 1960, the gap in terms of wealth between the top 20% and the bottom 20% was 30 fold. Four decades later it is more than 75 fold.

Such concentrations of wealth would be far less of an issue if the rest of society were benefiting proportionately. But that's not the case. As the economist Jeff Madrick reminds us, the pressures of inequality on middle and working class Americans are now quite severe. "The strain on working people and on family life, as spouses have gone to work in dramatic numbers, has become significant. VCRs and television sets are cheap, but higher education, health care, public transportation, drugs, housing and cars have risen faster in price than typical family incomes. And life has grown neither calm nor secure for most Americans, by any means." You can find many sources to support this conclusion. I like the language of a small outfit here in New York called the Commonwealth Foundation/Center for the Renewal of American Democracy. They conclude that working families and the poor "are losing ground under economic pressures that deeply affect household stability, family dynamics, social mobility, political participation, and civic life."

It's that pressure that drives people away from the ballot box: they have all they can do to maintain their families--we're working longer days, longer weeks and taking fewer and shorter 'vacations' which technology (laptops, cel-phones) allows employers to consider, in effect, 20-hr work-weeks instead of 40+--as it is and they have little time or energy to spare for participation in a process they have good reason to believe wants nothing to do with them and is, in fact, usually the 'enemy'. Are we supposed to get excited about Dems just because they'll cut 15% less from services we need than the Pubs? Up to now, the difference between the two corporate-owned parties has been largely cosmetic. Nobody--NOBODY--has been speaking for us.

Except Michael Moore.