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Let's talk class warfare shall we?

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Let's talk class warfare shall we? Anytime someone raises the issue of the outrageous gap between the very rich and the rest of the population then either a politician or a TV talking head will caution against "class warfare." This is so disingenuous because there is an ongoing class warfare being waged on the population by the very rich - and their very well placed lackeys. The news and reports of late demonstrate the real warfare that is being waged - and who pays the price for it.

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We keep hearing that we are recovering, but job losses continue, people losing their homes continues to rise, as does the number of people who are now homeless. So who exactly is recovering? Or what part of the economic sector is recovering? The financial sector (which has been the beneficiary of over $14 trillion between TARP and the Federal Reserve) seems to be doing well.- or at least the top management is. According to Andersen and Pizzigati, ten of the top 20 beneficiaries of the bailout bonanza have reported on bonuses. Adding up the bonuses of the top five managers from each of these firms comes to the tidy sum of $90 million in stock options alone.

Access to healthcare has been in the news a lot lately. Anyone who pays for health insurance is all too well aware premiums continue to rise as do co-pays and deductibles. Most people would acknowledge that we have both an insurance and healthcare access crisis on our hands. So one might think that the industry would be somewhat sensitive to the issue and try to control costs. And they are - by driving them upwards. In 2008, the CEOs of two major insurance corporations (Cigna and UNF) made a combined salary of $20.4 million. Insurance corporations had record profits for 2006, and again for 2007 - and as the economy crashed - remained strong for 2008. In fact, between 2000 and 2007 the top ten insurers saw profits rise by 428%.

Job losses and cutbacks continue to rise. According to the Bureau of Labor Statistics August 2009 report, the numbers are grim:

Jobs lost in August: 216,000
Total unemployed: 14.9 million
No. working part-time because hours cut: 9.1 million
Marginally attached to labour force: 2.3 million (up 630,000 from August 2008)
Current unemployment rate: 9.7%
Total unemployment and marginal employment rate: 16.8% (Series LNS13327709 seasonally adjusted).

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However, given that grim news, productivity is up. In fact, "Productivity Makes Biggest Leap Since 2003." Productivity grew at an annual rate of 6.6%. So those who are left in the labor force are not only taking up the slack, but actually producing 6.6% more than when their co-workers were with them. Why would any employer want to hire people back when they can get this kind of fear driven productivity out of their remaining employees?

Of course, productivity may be somewhat skewed because workers are getting screwed. A new study was released this week - "Broken Laws, Unprotected Workers - Violations of Employment and Labor Laws in America's Cities". The study looked at labor law violations in three cities (Chicago, LA, and New York), and interviewed 4,387 low wage workers. The commonness of violations was the big surprise of the study. It was common for workers to not get paid, not get paid over time, and be dissuaded from filing for worker's compensation. In fact, only 8% of workers eligible to file for worker's compensation did so. In a summation of the study written up in The Nation , there was this startling information (emphases mine):

... we and our colleagues found severe and widespread violations of employment and labor laws. One in four workers were paid below the minimum wage in a given work week. Fully 76 percent of those who worked overtime were not paid the required time and a half. More than two-thirds did not get the meal breaks they were entitled to. And of those who came in early or stayed late, 70 percent did not get any pay at all for the work they performed outside their regular shift.

As a result, the average worker in our survey lost $51 per week, or more than $2,600 per year for a full-time worker. We estimate that 1.1 million workers across the three cities are robbed of $56.4 million every week because of employment and labour law violations.

$56.4 million a week for workers in three cities! What might the total be across the nation? In the trillions a week? What if we expanded this study beyond the low wage workforce? What if we expanded it to include these super-productive workers who set a productivity records with a 16.7% unemployment rate? We know where that money is going. It is on an express packet to the top of the earnings spectrum. It is in the pockets of the financiers, and it is part of the monopoly money that fueled the collapse - and keeps any real recovery from happening. Further, the architects of the collapse are building new empires - at our expense.

However, those at the top want more than our hard work and willingness to be abused and bilked. Apparently, an economic recovery requires lots of individuals to go into debt. Not surprisingly, people have cut back on their spending. Job insecurity (for those with jobs) is high. For those lucky enough to get unemployment, budgets are tight. In a short article by Kathryn Harris discussing the personal debt situation in the UK she notes:"If everyone pays off their debts and cuts back on spending at the same time it could lead the UK economy into an even darker downturn than the one we are currently in." In other words, the consumer economy is based on debt, and we have structured (as have the Brits) an economy dependent on consumption.

However, unlike the drop in interest rates in the UK, US credit companies and banks have raised (or are raising) the interest rate on personal credit. I know that it ticks me off when a corporation that has received a ton of TARP funds tells me that "economic conditions require we raise interest rates and fees." I read that as "We got $150 million in TARP and 0% interest from the Federal Reserve, and so we need to raise your rate by 8% and charge you an annual fee of $35 to make an increased profit."

So folks are ticked off. There is public pressure to control these out of control profiteers, and THAT is called "class warfare?" However, the everyday abuse, exploitation, and gouging of the people, is what? Just the way things work? No, I think it is well past time to talk about the real class warfare that is waged by those at the top on the rest of the population.

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Resources of Note
9/03/09 Conaway, NPR. New Job-Loss Claims Fall, Rise At Same Time. The Big Number Comes Tomorrow.

The double-edged sword of falling debt. Kathryn Hopkins. Guardian. 9/02/09.

Productivity Makes Biggest Leap Since 2003. (Yes, You're Working Harder.). Laura Conaway. NPR. 9/02/09.

There's a Bubble That Still Threatens the Entire American Economy ... and Few Are Talking About It. Sarah Anderson and Sam Pizzigati, AlterNet, 9/02/09.

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Rowan Wolf is an activist and sociologist living in Oregon. She is the founder and principle author of Uncommon Thought Journal, and Editor in Chief of Cyrano's Journal Today.


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