​Davos Union

How 62 people gathered as much wealth as the poorer half of the world’s population

Perhaps it all started when the U.S. Supreme Court decided that money is speech, corporations are people, and declared in the Citizens United case six years ago that politicians could not be corrupted by money.

Have you ever seen a formula like this: Dollars=Words? What are words worth today? Much more than yesterday. The world’s rich are having a daily word auction. The World Economic Forum Union of elites, plutocrats, and oligarchs met last week in one of the major tax havens in the world, Davos, Switzerland, shortly after the Republican Supreme Court of the United States debated whether the California Teachers Union could force non-members to pay a fee to help support negotiations with school boards over salaries, working conditions, and fringe benefits.

I use the term “union” with the organization of billionaires in Davos and teachers in unions around the world, because a union is defined as “a combination or alliance of persons, parties, or political entities for mutual interest or benefit.” Is the Chamber of Commerce a union? Of course it is. Is the Fargo Education Association a union? Of course it is. Is The Business Roundtable a union? Of course it is.

The billionaires are flying to Switzerland in their private jets to meet with their fellow elites to determine what risks and threats their union will have to deal with in the near future. The world’s billionaires and the business CEOs of global corporations will pay their annual union dues of $100,000 to spend three days discussing the following issues that could cut their profits (in order of importance by survey of 1,400 CEOs): (1) over-regulation (79%), (2) geopolitical uncertainty (74%), (3) increasing tax burden (69%), (4) social instability (65%), (5) shifts in consumer spending and behaviors (60%), and (6) lack of trust in business (55%).

That’s funny. I don’t see the main problem listed in the top five as registered by the world’s 99 Percent: economic inequality.

A quarter of Americans have less than $100 to their name

In the short span of a decade—and during a global recession—a tsunami of trickle-up economics has exploded, drowning poor and middle-class dreams in every country in the world. In 2005, 388 billionaires owned as much as 3.5 billion of the poorest people, half of the world’s population. By 2011 that number had been cut to 117. By 2014 it was 80.

The economic research group called Oxfam says that 62 billionaires in 2015 possess more wealth than the poorest 3.6 billion. The wealth of each of the 62 (53 of them white men) went up an average $9 billion over the last five years. This bonanza is compared to the $3 a year gained by the poorest 10% in the world over the last 25 years.

By the way, poor Americans have fared no better. A national survey by Bankrate.com reveals that 63% of Americans don’t have the savings to cover a $500 car repair bill or a $1,000 medical or dental bill. Only about 40% of Americans are putting money into a savings account of some fashion. A quarter have less than $100 to their name. Eleven percent of Americans said they could only afford the minimum payment on their credit card debt, thus assuring they would be mired in debt for years because of high interest rates.

Is the Great Recession over for the 99 Percent? A study of the 3,069 U.S. counties indicates only 65 have recovered from the economic status they had in the spring of 2008. Just between 2009 and 2012 the top One Percent took 91 cents out of every dollar earned in the U.S. Guess what the 99 Percent got. The billionaire hedge fund manager Stanley Druckenmiller described that period as “the biggest redistribution of wealth from the middle-class and poor to the rich ever.”

Where did the $17 trillion lost by Americans in the Great Recession go? Most of those trillions went into the pockets of bankers, Wall Street traders, globalization business CEOs, and hedge fund managers when millions of poor and middle-class homes went underwater and rotted there for years as taxpayers bailed out the perpetrators of the recession. If your home has even gained back its 2008 value you have lost eight years of increasing value—and is your 401K actually beyond 201K level?

Why are we in this economic mess of income inequality?

The ferocious battles between labor and capital in the 1920s and 30s, sometimes marked by machine gun and rifle fire (witness “Mine Wars” in the U.S.), culminated in the steady growth of unions between 1945 and 1980 that brought over 60% of Americans into the middle-class. Between 1947 and 1973, when unions reached their peak, real wages in the non-managerial class (labor) rose by 75%.

Between 1979 and 2006, when union “density” and membership collapsed, real wages in the non-managerial class rose by only four percent. During the period of rapid union growth, Republican President Dwight Eisenhower recognized that organized labor was needed to contain greedy “disaster” and “crony” capitalism for the common good: “Unions have a secure place in our national life. Only a handful of reactionaries harbor the ugly thought of breaking unions and depriving working men and women the right to join the union of their choice.” (Can you imagine a Republican presidential candidate saying that today?)

Ike realized that if everyone in a society was going to share in the bounty of capitalism, labor had to create dynamic tension to maintain that sharing. Only then does capitalism become functional because of the constant pressures between the two forces.

So what happened in 1980, about 35 years after Ike’s categorical statement about the importance of unions in a capitalistic society? Why have we ended up with a large bucketful of reactionaries in Congress, the Supreme Court, and presidential candidates in 2016? When President Ronald Reagan fired 13,000 government air traffic controllers in 1981, his bold and reactionary act gave the Republican Party and the business community the idea it was to their benefit to replace unhappy employees rather than work to mollify them through a union. In the 1950’s one of three workers belonged to unions, with four workers out of ten as union members in the private sector. In 2016 only 11.8% of all American workers are union members, with only 6.9% as members in the private sector, a calamitous decline in 50 years from 40%.

We now have 25 states that have passed right-to-work (for less!) laws which severely limit what unions can do in collective bargaining. Research indicates workers in right-to-work states earn an average of $1,500 less than workers in the same job categories in union states.

Voestalpine, the giant Austrian steel manufacturer, already has two dozen plants in the United States, employing 2,500. It is planning on building more. After checking 18 world-wide locations, the chairman selected the U.S. because of land and energy costs, a positive political climate (!), fewer industrial regulations, and “cheap and plentiful labor.” The chairman added it was becoming more difficult to find qualified workers because of poor schools in the South.

The right-to-work-for-less reactionaries must be made to understand that unions matter, that unions need to win some of the time, that they have to fight, and sometimes strike, to point out that workers are worth more, not less.

After 28 years on both sides of negotiations tables bargaining over salaries, working conditions, and fringe benefits for about a thousand education employees, I learned early on that to succeed over the long run, we must create a win-win situation for both parties. It’s not easy. Germany does it by requiring business boards of directors to have equal numbers of members representing labor and management.

What will the Republican Supreme Court Decide In The California Teachers Union Case?

About 325,000 California public school teachers are members of the California union, while 29,000 are not members. According to a 1977 decision of the Supreme Court, the union may charge non-members a “fair-share” fee to help cover collective bargaining costs, but they cannot charge non-members for political or ideological activities. This has always seemed like a fair deal to most, because non-members get the same salaries, working conditions, and fringe benefits that union members have negotiated for. But now non-members, supported by private corporations and right-to-work advocates, are challenging the right of unions to charge a “fair-share” fee. Guess what corporation is totaling funding this anti-union lawsuit in an attempt to further destroy unions in this country. It’s the billionaire libertarian Koch brothers, David and Charles (each worth about $45 billion), who will probably spend well over $1 billion on the 2016 election to further expand income inequality in the U.S. They will spend a billion trying to elect politicians who will attempt to destroy the following entities : (1) all public and private unions, (2) campaign finance laws, (3) Federal Election Commission, (4) Securities and Exchange Commission, (5) Environmental Protection Agency, (6) Food and Drug Administration, (7) Occupational Safety and Health Administration, (8) federal income and all capital gains taxes, (9) Social Security, and (10) Medicare and Medicaid. Let’s also remember the father Fred Koch was one of the founders of the John Birch Society, a group that accused Republican Dwight Eisenhower of catering to communists—and hiding hundreds of them in his administrations.

When the “fair share” lawsuit was heard in the Supreme Court, the five Republican majority justices indicated to court watchers by their questioning of lawyers on both sides that the forty-year-old decision will probably be overturned. Remember, these five justices determined not too long ago that corporations are “persons.” The big question is, will non-member teachers who enjoy raises and benefits negotiated by the union pay a fair-share voluntarily? We always had free loaders and riders in the years I was involved in negotiations—but Justice Samuel Alito says that won’t happen! What planet does he live on? Most Republicans agreed with Mitt Romney in the 2012 elections when he said, in what he thought was a private speech, 47% of the poor and middle-class were “takers.” It will be interesting to see what the other four Republicans do. Kennedy said Citizens United wouldn’t change politics! That was plain dumb. Scalia wrote in a case24 years ago that unions could compel non-members to pay fair-share. What will his shadow Clarence Thomas do? He seems to have a large chip. Alito loves corporations because they are people and he has never in his judge’s life voted for a worker cause. Chief Justice Roberts last saved the Court from a revolution by voting for Obamacare in a 5-4 vote. Will he save the Court from overturning a sound decision made 40 years ago?

When Will The Peasants Rebel Against The Plutocrats?

‘Tis said in Davos that the 62 ultrarich in their gated estates worry about what the poor will do. When a majority of the world’s poor live in wretched conditions they might get angry, like they did in the French and Russian Revolutions and Arab Springs. Last year 167,800 Wall Street employees received $28.5 billion in year-end bonuses, enough to double the wages of all Americans slaving for the minimum wage. In another comparison, these bonuses are enough to lift 2.9 million servers and bartenders, 1.5 million home health and personal aides, and 2.2 million fast food workers up to $15 an hour. No wonder Super Bowl ticket resale prices have reached $5,451 per seat and lower club seats in Santa Clara are selling for around $28,000 a ticket. Resale ticket prices average $1,200 more than last year. An average resident of Los Angeles uses 107 gallons of water a day, but a resident in Bel Air, a gated suburb, uses 32,000 gallons. Perhaps the 62 should strengthen their gates.

At a recent political rally in Las Vegas Tracy Chapman sang from Steve Earle’s “The Revolution Starts Now”:

“Poor people gonna rise up and take what’s theirs/Don’t you know you better run, run, run, run, run, run, run…