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Asunto:[CeHuNews] 41/06 - The War Against Wages by Paul Krugman.
Fecha:Martes, 17 de Octubre, 2006  17:44:42 (+0000)
Autor:Alexander von Humboldt <cehumboldt>

CeHu News 41/06

The War Against Wages by Paul Krugman.  ( Op-Ed Contributor )

The New York Times (October 06 2006)

Should we be cheering over the fact that the Dow Jones Industrial Average has
finally set a new record? No. The Dow is doing well largely because American
employers are waging a successful war against wages. Economic growth since 
early 2000, when the Dow reached its previous peak, hasn't been exceptional. 
But after-tax corporate profits have more than doubled, because workers'
productivity is up, but their wages aren't - and because companies have dealt
with rising health insurance premiums by denying insurance to ever more workers.

If you want to see how the war against wages is being fought, and what it's
doing to working Americans and their families, consider the latest news from

Wal-Mart already has a well-deserved reputation for paying low wages and
offering few benefits to its employees; last year, an internal Wal-Mart memo
conceded that 46 percent of its workers' children were either on Medicaid or
lacked health insurance. Nonetheless, the memo expressed concern that wages and
benefits were rising, in part "because we pay an associate more in salary and
benefits as his or her tenure increases".

The problem from the company's point of view, then, is that its workers are too
loyal; it wants cheap labor that doesn't hang around too long, but not enough
workers quit before acquiring the right to higher wages and benefits. Among the
policy changes the memo suggested to deal with this problem was a shift to
hiring more part-time workers, which "will lower Wal-Mart's health care

And the strategy is being put into effect. "Investment analysts and store
managers," reports The New York Times, "say Wal-Mart executives have told them
the company wants to transform its work force to forty percent part-time from
twenty percent". Another leaked Wal-Mart memo describes a plan to impose wage
caps, so that long-term employees won't get raises. And the company is taking
other steps to keep workers from staying too long: in some stores, according to
workers, "managers have suddenly barred older employees with back or leg
problems from sitting on stools".

It's a brutal strategy. Once upon a time a company that treated its workers this
badly would have made itself a prime target for union organizers. But Wal-Mart
doesn't have to worry about that, because it knows that these days the people
who are supposed to enforce labor laws are on the side of the employers, 
not the workers.

Since 1935, US workers considering whether to join a union have been protected
by the National Labor Relations Act, which bars employers from firing workers
for engaging in union activities. For a long time the law was effective: 
workers were reasonably well protected against employer intimidation, 
and the union movement flourished.

In the 1970s, however, employers began a successful campaign to roll back
This campaign depended on routine violation of labor law: experts estimate that
by 1980 employers were illegally firing at least one out of every twenty workers
who voted for a union. But employers rarely faced serious consequences for their
lawbreaking, thanks to America's political shift to the right. And now that the
shift to the right has gone even further, political appointees are seeking to
remove whatever protection for workers' rights that the labor relations law
still provides.

The Republican majority on the National Labor Relations Board, which is
responsible for enforcing the law, has just declared that millions of workers
who thought they had the right to join unions don't. You see, the act grants
that right only to workers who aren't supervisors. And the board, ruling on a
case involving nurses, has declared that millions of workers who occasionally
give other workers instructions can now be considered supervisors.

As the dissent from the Democrats on the board makes clear, the majority bent
over backward, violating the spirit of the law, to reduce workers' bargaining

So what's keeping paychecks down? Major employers like Wal-Mart have decided
that their interests are best served by treating workers as a disposable
commodity, paid as little as possible and encouraged to leave after a year or
two. And these employers don't worry that angry workers will respond to their
war on wages by forming unions, because they know that government officials, 
who are supposed to protect workers' rights, will do everything they can to 
come down on the side of the wage-cutters.

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