workers freedom

economics as if workers mattered

Wages Fall as Profits Surge

The Federal Reserve is warning that the bosses need to hold the line on workers’ wages in order to control surging inflation, even though inflation has been running two to three times the rate of wage hikes. (At my job, we got an inflation adjustment of 0.5 to 1% this year, offset by a 4% hike in health insurance premiums. It’s the first cost of living adjustment in years, and does nothing to offset rising prices.) But new research shows that higher wages (not that they are actually higher) have almost nothing to do with rising prices. More than half of price hikes (53.9%) are going straight to corporate profits, with labor costs accounting for only 8%. So if prices were being hiked to keep up with higher wages, inflation would be well under the 2% to Fed claims it’s aiming for, and real wages would actually be creeping up (if very slowly).

It is unlikely that either the extent of corporate greed or even the power of corporations generally has increased during the past two years. Instead, the already-excessive power of corporations has been channeled into raising prices rather than the more traditional form it has taken in recent decades: suppressing wages…

Josh Bivens, Working Economics Blog

Whacked by prosperity

All that prosperity swinging around is likely to you a concussion.

The stock market has been falling for the last week — according to the pundits, because too many people have jobs, and those jobs pay too well. (Never mind that millions of people who lost work at the outset of the pandemic are still looking for work, that wages are falling relative to inflation, that millions are set to lose their health care coverage in the coming months, that evictions are skyrocketing as landlords boost rents into the stratosphere…)

That’s their story, and they’re sticking to it.

They believe that we’re drowning in prosperity because the rich — and the pundits are mostly from the top 10% or so — are swimming in money. Corporate profits reached record levels during the pandemic, even as many people struggled to survive (and a great many of us didn’t make it — about a million are known to have died from Covid, and many others were forced onto the streets). Gas companies are raking in monopoly profits. CEO pay is up. The wealth of the wealthy just keeps on growing.

So there’s plenty of prosperity, but you’ve got to be careful as it goes around because those wielding it are likely to knock you in the head, and stomp on you once you’re down.

One Way to Fire Your Boss

Amazon has fired several managers at the Staten Island warehouse which voted to unionize last month, even as it continues its efforts to persuade the National (anti-)Labor Relations Board to throw out the union’s victory on the grounds that the NLRB’s ineffectual, meager efforts to protect workers’ rights during the election campaign (workers fired for supporting the union have yet to get their jobs back despite NLRB orders and court rulings).

No doubt, this is intended to scare other managers across the country — dozens of Amazon facilities face unionization efforts — into scorched-earth campaigns against any organizing efforts, by making it clear that the company will not retain any manager who attempts to follow labor laws officially intended to allow workers to make a free, uncoerced, choice as to whether they want union efforts or not.

But it might well encourage some workers to organize. I remember one meeting I had where workers’ core concerns all revolved around their managers’ ceaseless harassment, some petty and some fairly major. I promised them that if they signed up with the IWW we would get their boss fired — and we did, though it took a bit longer than I expected. We also got a very big back pay settlement for one worker who was being paid overtime hours from another checking account (management took the view that if they funneled the funds through a special fund it didn’t count as overtime; their attorney was very insulting as she explained this to me, but once the worker agreed to make a formal complaint to the state a check for several thousand dollars was cut in a matter of hours), even if we only held the shop for a couple of years before our majority was killed by turn-over, very slow negotiations, our inability to organize the other facilities in the area, and a new manager who had worked the job and so had a much better understanding of workers’ needs.

Is Your Pay Too High?

Economists and Federal Reserve officials were blathering today about the need to cool down the overheated job market, lest it touch off a wage-price spiral. We all know that prices have been going up, but wages not so much. And employers continue slashing away at health and retirement benefits like they were weeds threatening to engulf the bosses and their ill-gotten pandemic profits.

A very few workers at the bottom of the pay scale have been able to get pay hikes that outstrip the official inflation rate – though of course that official rate undercounts housing and food prices, at least for lower-income households. (Richer folks typically own their homes, and so if they’re not buying a fifth mansion at the moment the costs are relatively stable. Their food budgets are much larger than ours, but make up a much smaller proportion of their income.) Most are losing ground as the price gougers rake in record profits, raise prices as fast as their monopoly power allows, and hold the line on wages. And of course millions of workers continue to be frozen out of jobs altogether…

15 million to lose health care

Some 15 million Americans will be dropped from expanded Medicaid coverage once the Covid-19 health emergency is declared over — something the federal government says could happen any day now, though the polytricksters promise they will give 60 days notice before actually cutting off people’s health coverage. The state of emergency bars states from kicking people off Medicaid while the pandemic raged, but its funding has expired and the Senate has blocked proposals to extend coverage. So we are reverting to current law, which requires states to regularly conduct reviews to make sure those ineligible for the government-funded health care scheme are kicked off. Some states, of course, are far more aggressive in looking for excuses to cut off health care.

Some people will have become ineligible because their income has risen above the cut-off point, even though they still don’t make enough to afford health care. Some moved without letting the bureaucrats know. And many – perhaps most – haven’t returned the complicated paperwork to demonstrate their continued eligibility. Many, many people have long gone without coverage because they were unable to navigate the bureaucracy.

This is the inevitable result of a health care system organized around profits. In such a system, the services available to poor people will always be inferior and harder to access – the more difficult the better. And even for those who have health coverage, the system is organized around erecting as many barriers as possible between workers and the health care we need.

Russian oil tanker wanders from port to port

Amsterdam dock workers are refusing to work a Russian tanker hauling diesel fuel, after workers in Rotterdam and in Swedish ports earlier refused. “Russia is financing the war in Ukraine with the cargo,” the FNV union said in a statement thanking Swedish workers for turning the ship away.

Dutch government officials say the ship is allowed into port to unload its cargo, but the tugboat firms that bring ships to the docks have expressed concern that it might not be safe given the likelihood that protesters would surround the vessel if it enters the port.

Direct action gets the goods. If Russian oil and maritime workers took similar action, this war would be over in a matter of hours.

Conferences commemorate the centenary of Kropotkin’s death

I will be speaking at this event next week. Why not join us?

An international conference will be held Feb. 5 – 7, 2021, to commemorate the anarchist thinker and geographer Peter Kropotkin, a century since his death.

While some events will have limited local audiences, the conference is being held online. To register for a free or by donation ticket to the event please visit: You must register to receive the conference links.

“The main problem of modern realistic ethics is … to determine, first of all, the moral end in view. But this end or ends, however ideal they may be, and however remote their full realization, must belong to the world of realities.  The end of morals cannot be “transcendental,” as the idealists desire it to be: it must be real.”

—Kropotkin, from Ethics: Origin and Development

Black Rose Books, in global collaboration with other organisations, scholars, activists and university departments, is organizing this conference to celebrate Peter Kropotkin’s life and work. This conference would commemorate 100 years since his death on February 8th, 1921. Kropotkin is undoubtedly one of the most important anarchist thinkers to understand the vision, and action, needed for positive transformative change. His legacy is critically important and needs to be shared so that others can know about his values and what he dedicated his life to.

As a multi-disciplinary scholar, he argued that the centralized bureaucratic state and capitalism are antithetical to a sustainable and just society.

Follow the event on Facebook

Keep up with the conference website

Conference Programme:

An International Colloquium “Pëtr Kropotkin – Activism and Scholarship”, is being organized by the Geography Department of the University of São Paulo, Brazil, July 19 to 23, 2021.

Museum of P. A. Kropotkin – We are proud to be working with the Virtual Museum of P.A. Kropotkin. To virtually explore Kropotkin’s life as well as his scientific and revolutionary activities, visit their website (available in multiple languages):

Also of interest is a website about the scientific and ideological heritage of P.A. Kropotkin. The site presents a bibliography and many of the works of the Russian scientist and revolutionary Pyotr Alekseevich Kropotkin as well as literature about him and his legacy.

Barnes&Noble bought by vulture capitalists

The New York Times reports that an investment firm best known for buying up Argentine bonds after the country had defaulted and then pursuing the country in courts around the world until a new administration agreed to pay – Elliott Advisors made some $2 billion on the deal (three times what it paid) – has bought the U.S.’s largest book chain, Barnes & Noble.

Elliott will place B&N under the management of the CEO of British bookstore chain Waterstones, which it bought in June 2018. (Waterstones operate more than 280 stores; its total and per-store sales are dwarfed by B&N’s.)

Although it operates hundreds fewer stores than it did at its peak (having closed its B Dalton stores, and spun off its GameStop and B&N College divisions), B&N remains the country’s largest book chain with 627 stores. #2 Books-A-Million operates some 260 stores, primarily in the South. #3 Half-Price Books (a Midwestern and Southern chain specializing in discounted titles) operates about 125 stores. B&N sales have been falling in recent years (and it lost many hundreds of millions on its online operation and its efforts to move into ebooks); now has higher book revenues, though it is #5 in terms of the number of physical bookstores it operates.

Elliott is controlled by Paul Singer, a financier and major Republican donor who donated $1 million to the Trump inauguration.

Most American Workers Own Less Than Nothing

Half of all Americans now own less than nothing, after you subtract their debts from their assets (homes, cars, bank accounts, etc.). It is, as the Trumpsters constantly remind us, the greatest economic boom in recorded history.

The Booming Economy That Isn’t

Americans’ net worth plummeted by $3.73 trillion in the fourth quarter of 2018, according to the Federal Reserve, the most dramatic decline since the Great Recession began in 2008.  Workers’ pay and benefits have been falling as a percentage of gross domestic income for years, down to 52 percent. It was 59% in 1970 and 57% in 2001; the difference has largely gone to corporate profits.

The incomes of the very rich have grown faster than the economy since 1980, skyrocketing by more than 400 percent for the top .01 percent. The top 1 percent aren’t hurting either, raking in about 180 percent more over the same period. The top 10 percent have held their own, with income gains that closely mirror GDP growth. (New York Times columnist David Leonhardt calls this – those making $120,000 to $425,000 a year after taxes – the “upper middle class.” Presumably, under this conception, the middle class includes everyone except the richest and poorest 1 percent.) And the bottom 90 percent are steadily losing ground.

A few weeks later another Times columnist, Neil Irwin, noted a string of economic problems: “economic growth has been slower than it used to be… Productivity growth has been weak. Inequality has risen. And the corporate world is more and more dominated by a handful of ‘superstar’ firms.” Others call this monopolization.

“What,” he asks, “if those megatrends are all the same problem?” Not capitalism, of course, but the effects of surging economic inequality, holding down economic growth because most people can’t afford to buy stuff, and holding down wages because the remaining companies face little competition for workers. Perhaps “we’ve been thinking about the world’s economic woes all wrong. It’s not a series of single strands, but a spider web of them.”

Leonhardt was back a few days later, conceding that economic pundits have been “exaggerating the strength of the economic expansion, because it makes for a good story. Here’s the truth: There is no boom. The economy has been mired in an extended funk since the financial crisis ended in 2010.” Indeed, he offered a chart showing that year after year, the economy has consistently underperformed the experts’ predictions. “And for most families, real-life experience has been more disappointing than the G.D.P. numbers, because much of the bounty of the economy’s growth has flowed to the affluent.”

Leonhardt blames this long stagnation on too much money sloshing around in the pockets of the rich (they long ago reached the point where there’s nothing more for them to buy, and so stash the wealth we create in bank accounts and stocks and such), and an investment slump resulting from the fact that most companies “have grown so large and monopoly-like that they don’t need to invest in new projects to make profits. Think about your internet provider: It may have terrible customer service, but you don’t have a lot of alternatives. The company doesn’t need to invest in new technology or employees to keep you as a customer.”

He suggests we stop funneling money to the rich, and instead put it into repairing infrastructure, improving the social safety net, and speeding the transition to an environmentally sustainable economy.