Making decisions for millions

Richard Wolff of The Guardian takes a look at Detroit and its bankruptcy from the view of capitalism. Back in the 1930s unions forced the big car companies to give factory workers a livable wage and livable working conditions. Of course, once unions were firmly established the bosses spun that into "See what we gave our workers out of the kindness of our hearts!" Even so, the 1950s and the rise of the middle class in Detroit (and its peak population) were seen as the glory days of capitalism. Yes, this economic system can bring benefits to everyone!

But Japan and European automakers began eating Detroit's lunch in the 1970s. Detroit auto leaders made some pretty stupid moves -- not recognizing the true nature of the competition and not responding fast enough with fuel saving technology (these were the years of the OPEC oil shocks).

And who paid for those blunders? Not senior management. Not shareholders (well, perhaps they missed dividend payments and stock lost some value). But workers. Their wages were cut and their jobs moved. Detroit's middle class was undermined. So was America's. When did the working class see their income stop rising? The 1970s.

So we see the true nature of capitalism. It doesn't look all that successful anymore. More like a distinct failure. The guys on top are unwilling and probably unable to reverse the loss of the middle class and to lessen inequality.

Wolff turns the discussion in an interesting direction. What would have happened of those strikes in the 1930s had transformed the companies into worker cooperatives? Some possibilities: Management, though still paid well, would have been paid less. The savings would have allowed better competition with Japan and Europe. Workers would be able to maintain a middle class life. The car companies would certainly not have moved out of Detroit. And Detroit wouldn't be the shell of its former glory and in bankruptcy.

Wolff ends his piece this way:

What kind of a society gives a relatively tiny number of people the position and power to make corporate decisions impacting millions in and around Detroit while it excludes those millions from participating in those decisions?

When those capitalists' decisions condemn Detroit to 40 years of disastrous decline, what kind of society relieves those capitalists of any responsibility to help rebuild that city?

The simple answer to these questions: no genuinely democratic economy could or would work that way.

Jim Winkler has another look at the income gap. He is the head of the General Board of Church and Society of the United Methodist Church. This is the group within the denomination that shines a light on the social issues of our time, an emphasis that our founder John Wesley maintained.

Winkler highlights a couple people who have full time jobs, but do not make enough money to cover basic expenses. Thus they are trapped in poverty. Winkler then notes that in 1980 CEOs earned 42 times more than the typical worker. Now it is 380 times. That prompts a few questions:

If you perform an honest day’s work, shouldn’t you make enough money to provide the basic necessities for your family? If not, why not? Why, exactly, should chief executive officers make 380 times more than the typical American worker? … If CEOs are really worth 380 times more than the average worker, what has happened that makes them so much more valuable now than in 1980?
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Reduction of inequality is a positive social value. Our United Methodist Social Principles state, “We support measures that would reduce the concentration of wealth in the hands of a few.”
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Our Social Principles also declare that we support the right of all employees and employers to organize for collective bargaining into unions and other groups of their own choosing. And, we support the right of both parties to protection in doing so.

Those workers who are seeking a decent wage have turned to people of faith to help them. I can’t conceive of a reason why we shouldn’t.

An Associated Press poll shows 80% of US adults struggle with poverty. They have a particular way of defining that and it includes "economic insecurity" at some point in their careers. So, in spite of the opening sentence, maybe not all 80% struggle today. But it is common to have a personal experience with poverty.

The poll shows a couple more important bits:

The number of white single-mother households is greater than the number of Hispanic single-mother households and matches the number of such black households.

The poverty rate among working class whites has grown faster than working class non-whites.

These two (and a few more) have a significant meaning. We (the white population) used to be able to dismiss poverty because it happened to blacks and Hispanics, people we consider on the fringe. But it is now our problem too.