Stiglitz: We Created This Inequality

Joe Stiglitz:

The People Who Break the Rules Have Raked in Huge Profits and Wealth and It's Sickening Our Politics, by Joe Stiglitz, Alternet [Video]: The following is taken from a transcript of Joseph Stiglitz's remarks to the AFL-CIO convention in Los Angeles on September 8.

... For too long, the hardworking and rule-abiding had seen their paychecks shrink or stay the same, while the rule-breakers raked in huge profits and wealth. It made our economy sick, and our politics sick, too. ...

We have become the advanced country with the highest level of inequality... We use to pride ourselves--we were the country in which everyone was middle class. Now that middle class is shrinking and suffering.

The central message ... is that ... inequality is not inevitable. ... It is not the result of the laws of nature or the laws of economics. Rather, it is something that we create, by our policies, by what we do.

We created this inequality—chose it, really—with laws that weakened unions, that eroded our minimum wage to the lowest level, in real terms, since the 1950s, with laws that allowed CEO's to take a bigger slice of the corporate pie, bankruptcy laws that put Wall Street’s toxic innovations ahead of workers. We made it nearly impossible for student debt to be forgiven. We underinvested in education. We taxed gamblers in the stock market at lower rates than workers, and encouraged investment overseas rather than at home. ...

It is plain that the only true and sustainable prosperity is shared prosperity..., an economy in which 95% of the growth goes to the top 1% can only be called that: sick. ... A hundred and sixty five years ago, Lincoln said, "A house divided against itself cannot stand. " We have become a house divided against itself – divided between the 99% and the 1%, between the workers, and those who would exploit them. We have to reunite the house, but it won't happen on its own.

It will only happen if workers come together. If they organize. If they unite to fight for what they know is right, , in each and every workplace, in each and every community, and in each and every state capital and in Washington. We have to restore not only democracy to Washington, but to the workplace. ...

The challenge facing you has seldom been greater. You are still a small fraction of America. But you are the largest group representing the vast majority of Americans who work hard and play by the rules. .

You must get others to join you, to work with you, to organize with you, to fight with you. ... Together, we can grow our economy, strengthen our communities, restore the American dream, and re-establish our democracy--a government not of the 1%, for the 1%, and by the 1%, but a government of all Americans, for all Americans, and by all Americans.

I am doubtful that traditional unions can be an effective economic voice (through collective bargaining) given the threat of moving work to other states or countries, but I do think unions have an important role to play in representing workers in the political process -- unions can give workers a countervailing political voice. So I'm curious what you think about this idea:

... In contemporary America,... there is a nearly insurmountable impediment to unions’ ability to serve as a collective political voice for workers. It stems from the legal requirement that unions bundle political organization with collective bargaining, which means that in order to take advantage of the union as a form of political organization, workers must organize economically for collective bargaining purposes.

This bundling of functions, an artifact of how unions formed historically, is a major problem for political organizing today. This is true most obviously because managerial opposition to collective bargaining has become pervasive. It is also true because changes in markets have made the practice of collective bargaining difficult. ...

All of this has contributed to a dramatic decrease in unionization rates, which has in turn played a central role in the declining responsiveness of government.

But what if we unbundle the union and allow workers to organize politically without also organizing for collective bargaining? If we shift our aim away from reviving collective bargaining and toward enabling political organizing by underrepresented groups, we would allow workers to organize “political unions” even when they don’t want to organize collective bargaining ones.

It’s more straightforward than it sounds. The key is that we would make the workplace available as a site for political organization. While the law would continue to protect workers’ right to organize traditional unions, it would also protect workers’ right to organize strictly political ones. ...

Employers would be prohibited from retaliating against their employees who organized politically, and if the workers did form a political union, they would be entitled — as traditional unions are — to use voluntary payroll deductions to finance their activities. But these political unions would be prohibited from collective bargaining, and no worker would ever be required to pay dues to a political union — or to be represented by one — unless she chose to be.