Give States Some FAT

After years of teaching numeracy to undergraduate college students, I’ve developed a few rules-of-thumb to try and help students stop reading around numbers and instead read into them.  One of the rules goes like this: “If somebody gives you an absolute number (like $112 billion), ask them for a relative number, like a percentage or ratio, or some other point of comparison.”

$112 billion is the total deficit of the 50 United States of America – that is, the gap between what all the states are spending and how much revenue they expect in the next fiscal year.  That’s a huge amount of money in most contexts.  It’s larger than the Gross Domestic Products (GDPs) of most of the 227 countries listed in the CIA Fact Book, for example.  But it’s only 6/10ths of 1 percent of the GDP of the U.S.

For want of $112 billion the nation’s classrooms are being stripped of teachers as students are piled on top of one another.  Potholes, bridges, and sewer systems can’t be fixed. Sick people can’t be treated. State and local government workers lose either their jobs or a chunk of their wages.  Firefighters get to fires 90 seconds (and who knows how many lives) later, and police forces adopt “innovative” rotations to make it appear they could actually protect people from crime and mayhem.  All for the lack of $112 billion, a tiny piece of the total amount of goods and services we produce each year.

We can spend $700 billion to bail out banks and insurance companies and to save what’s left of American auto companies, but we can’t find $112 billion to bail out state and local governments who are “broke” mostly because they happen to be where the rubber meets the road in our still lingering Great Recession.

To be fair, the Obama stimulus package included billions of dollars to help states meet part of their obligations in 2009, 2010, and the first half of 2011.  But though banks and auto companies are now doing fine, states are still suffering the effects of high unemployment, falling real wages, and higher gas prices.  In fact, as governors (Democrats a little and Republicans a lot) fire workers and cut the wages of those remaining, they are in danger of setting off a downward spiral that could “dip” us back into another round of Great Recession.  Meanwhile the Obama administration now looks on with empathetic indifference.  The states are on their own next year, as if Wisconsin and Ohio (and New York and California) no longer have a claim on what the President says is an “American belief that we’re all connected,”  while Afghanistan, Iraq, and Libya still have a claim on more than $150 billion in U.S. funds this coming year.

But how, given the budget-cutting mania currently obsessing the Beltway and fed by all sides of elite opinion, could the Feds find $112 billion to bail out the states?  The answer: a financial activities tax (FAT), which would assess every stock trade one-quarter of 1 percent (that’s one penny for every $4 of trading).  This tax was designed decades ago by Nobel Prize-winning economist James Tobin as a way to curb speculative, short-term investing that most economists agree distorts financial markets.  That is, a FAT would be directed at curbing the kind of financial behavior that was a primary cause of the near-collapse of the U.S. and world economy in 2008. Though a minuscule fee for each trade and though intended to slow the pace and volume of financial transactions, it would produce about $100 billion a year in government revenue.

A FAT is routinely included in most of the progressive budget plans that have been typically ignored by elite opinion and, therefore, by mainstream media.  Called a “financial speculation tax,” for example, it is included in the recently released “People’s Budget” of the  Congressional Progressive Caucus, an overall plan which reduces deficits and debt by more than either the House Republican kill-Medicare budget or President Obama’s counteroffer.  If progressive Democrats would pull the FAT out of those plans and put it forward as a stand-alone tax increase that would specifically raise funds to help state and local governments avoid slashing jobs, wages, and vital public services,  it could both have a significant economic impact and a huge political payoff.

A permanent FAT tax linked to a temporary bailout of the states should have a special appeal. $100 billion could go to the states in the first year to avoid layoffs of teachers, cops, and firefighters, and then $50 billion in the second year and $25 billion in the third to help states catch up with their deferred maintenance and to move ahead with “investments for the 21^st  Century” in education and infrastructure.  The remaining money — $50 billion in the second year, $75 billion in the third, and a $100 billion a year forever after — would accumulate to a sizable cut in the federal government’s debt and deficit over the 10-year budgeting horizon typically used.

Progressive Democrats (especially in the states) sometimes ask why school children and teachers, victims of fire and crime as well as firefighters and cops should end up paying for what Wall Street caused.  It’s a good question.  But there’s no political payoff for Dems unless they have an answer.  A FAT-financed state bailout is such an answer.  It taxes a group who deserve corrective punishment.  It saves jobs and, though relatively small compared to what is needed, it helps stimulate economic growth which, of course, creates more jobs.  Politically, it could channel continuing public anger at “the banks” in a productive direction, while at the same time undermining Republican governors’ vicious attempt to rewrite the American social contract with their crisis-mongering about debts and deficits.

President Obama seems to think he can win reelection with an at-least-I’m-not-as-bad-as-the-Republicans approach, and he may be right.  But if the crisis in the states either dips us back into recession or simply assures a continuing slow-growth economy with historically high and grinding unemployment rates, just think how bad a Republican we could end up with in the White House in 2013.  Why take that risk? Why not a double-edged single-issue campaign to “save the states by giving them some FAT”?

Jack Metzgar, Chicago Center for Working-Class Studies

Should Working-Class People Go to College?

That sounds like an irreverent question.  It might even sound like I’m denigrating either working-class people or college.  So let me say this from the outset: I think higher education is important and valuable, and I am delighted that so many working-class students are pursuing it.  I also know that my view reflects just one part of the very divided public discourse about education these days.

I want people to go to college to develop their ability to think critically and analyze the world around them. As a humanist, I believe in the social, cultural, political, and personal value of spending time reading and talking about ideas.  Like Martha Nussbaum and Chris Hedges, I find the shift away from what I think of as “real” education – education for critical thinking and citizenship — not just philosophically problematic but downright scary for the future of this country and the world.  We need more people to be more able to read, speak, write, and most important think well.

Discussions about the value of the humanities and the broad social purposes of higher education represent just one part of the public debate.  The rest is about economic costs and benefits.  John Sherriff collates some of this material on his website exploring whether a college education is a “good investment.”  David Evans, a blogger and YouTube video producer, advises people not to go to college, suggesting that other types of training will yield equally-valuable career opportunities.  Others question the structure of higher education, suggesting that the four-year BA is itself a problematic model because few occupations really require that type of education.  Charles Murray of the American Enterprise Institute even suggests that the idea that everyone should get a BA creates class divides in America.

Two conversations I had last week have me thinking about these two very different discussions.   On Friday, I met with a student I’ll call Cherise, who was thinking about changing her major from English to English Education in order to improve her chances of getting a job, even though she admitted that she didn’t really want to work with children.  While I encouraged her to view college as an opportunity for learning and developing her abilities as a reader, writer, and thinker, I couldn’t ignore Cherise’s concern about getting a good job.  I told her about the panel we recently held with alumni from our department discussing their jobs as writers, editors, and professionals in marketing and public relations.  Studying literature, language, and writing can seem self-indulgent and impractical, but as one of my former students explained during the panel discussion, her English degree prepared her well for her job, teaching her how to adapt her writing to different situations, analyze both content and audiences, and figure out how to communicate effectively about technical issues she never studied in school.

The previous afternoon, I talked with a local group of current and retired teachers, and part of our conversation about class in America turned to the high costs and questionable economic payoffs of higher education.  I noted a point we have cited several times in Working-Class Perspectives over the last two years: the Bureau of Labor Statistics prediction that in the next two decades the U.S. will see more growth in jobs that don’t require a college degree and that pay low wages than in more professional fields.  We also talked about how the message that “everyone” should go to college discourages young people from even thinking about careers in skilled trades.

Worse, I pointed out, the myth that everyone needs a B.A. is creating long-term financial strains for many individuals and their families.  Last week, the New York Times reported that Americans now owe more for student loans than for credit cards, and the total debt load for college loans will soon be more than a trillion dollars.  Two-thirds of students now graduate with debt, and job prospects and security for college grads are both faltering.  According to Paul Krugman, as of December, about 74% of college graduates were finding full-time employment.  That’s a slight increase from the year before, but still 9% lower than a decade ago – when students were graduating with significantly less debt.  A dramatic report on 60 Minutes last fall highlighted the problem, as Scott Pelley talked with a roomful of people in the Silicon Valley who had reached the end of their 99 weeks of government unemployment benefits, unable to find work  despite having B.A.s (or graduate degrees) and years of experience.

College can still be a good investment, but it’s also increasingly expensive.  Costs have escalated as universities add facilities, keep technology up-to-date, and provide more services to address the needs of their increasingly diverse populations.  Meanwhile, despite plenty of rhetoric about the importance of education, most states are cutting funding to colleges and universities in order to balance tight budgets, choosing tax cuts for the well-off over education for the working class. As taxes go down, tuition goes up.  But for many working-class families, the tax cuts that created the states’ budget problems don’t come close to balancing the increased cost of college tuition.  Put simply, going to college takes an ever-bigger bite out of the family budgets of working-class people.  For them, going to college is a significant financial gamble.

That’s what makes the question of whether working-class people should go to college so difficult. Some healthy skepticism about the value of college is wise.  Young people and their parents should pay more attention to alternative forms of job preparation, such as technical schools and apprenticeships.  For someone whose primary goal is getting a better job, becoming an electrician may be a smart choice.

Critics like Murray overstate the cost-benefit analysis problem, though.  Yes, college can lead to significant debt, but only if students and their families ignore the opportunities available at regional universities and community colleges or get lured into high-cost for-profit programs that don’t yield real job opportunities.  Lower-cost options do exist.

The problem is, in part, that the more affordable state institutions are being pressured to offer programs that focus almost entirely on workplace skills, not critical thinking.  As CWCS faculty affiliates Tim Francisco and Alyssa Lenhoff have argued, “while students at the most prestigious schools are learning broad concepts and acquiring intellectual and ethical frameworks for processing complex, multiple, and shifting realities, too often students at lower ‘tier’ institutions are being trained to perform tasks, with one career or vocation the sole goal of their education. One group will likely become the innovators and the entrepreneurs, the other the workers.”

Along with reinforcing existing class divides, this approach ignores the broader social value of education.  Democracy relies on the ability of the people to think critically.  As Nussbaum writes, the abilities that are most “crucial to the health of any democracy” are being threatened in the current emphasis on the cost-benefit analysis of education.  This pits the pursuit of employment, a key part of the American dream, against the basic conditions for effective democracy, a key American value.

So what should I advise Cherise?  Her whole face lit up when I told her that sticking with the English major would not ruin her economic future.  It’s clear that what she really wants to do is keep reading, talking about, and critically analyzing literature and language.  And why shouldn’t she have the same opportunity to pursue her passions that her more privileged peers enjoy?  On the other hand, even as I can point to real professional opportunities for a smart young woman with good writing and research skills, I have to admit that there are no guarantees.  The best I can do is present her with the full range of options and obstacles.

Sherry Linkon, Center for Working-Class Studies

Reframing the Public-Sector Worker Debate

In a March 10 op-ed piece in the Wall Street Journal, Wisconsin Governor Scott Walker set the record straight on why he is fighting public unions, and in so doing he evoked a frame that could easily have appeared in any of the many “recession” stories that have proliferated in media over the past few years:

For example, my brother works as a banquet manager at a hotel and occasionally works as a bartender. My sister-in-law works at a department store. They have two beautiful kids. They are a typical middle-class Wisconsin family. At the start of this debate, David reminded me that he pays nearly $800 per month for his family’s health-insurance premium and a modest 401(k) contribution. He said most workers in Wisconsin would love a deal like the one we are proposing.

The example is compelling, and like the countless other similar accounts, it invites readers to ask “Why should ‘they’ have what I don’t have?”

Walker’s “frame” parallels much of the coverage of workers’ issues that, in an earlier post, I criticized for failing to address the complexities and the realities behind the eye-catching and heart-tugging “working class” frames like his.  For example, rather than simply accepting as unassailable inevitability the plight of Walker’s brother, why aren’t we asking why his health-care premiums are so high, or why the important work that he and his wife do to support their family is so undervalued at a time when corporate profits and worker productivity are at all-time highs?

Imagine the impact of a story that, after describing the plight of Walker’s sibling, actually examined the profit margin of the hotel and department store that employ the couple to let readers discern whether or not the couple is being asked to “sacrifice” because their employers are exploiting the recession to squeeze more out of employees.

This lack of information is equally troubling in the portrayal of public school teachers, which often consists of a comparison between the “perks” of the teacher, with those of the private sector. Missing from these stories is the harsh reality that based on the cost of earning and maintaining their credentials, public school teachers are one of the lowest paid groups, according to a CBS Money Watch study.

Moreover, many media too often repeat the easy opposition between taxpayers and public workers, as in a recent Christian Science Monitor piece that sports the headline, “Who Will Win the Battle Between Teachers and Taxpayers?” Too few note that public workers are taxpayers as well, and in many cities, such as Youngstown, these workers pay much of tax burden that keeps city services functioning.

In a smart analysis for tax.com, “Really Bad Reporting in Wisconsin: Who Contributes to Public Workers Pensions?” Pulitzer Prize Winning reporter David Cay Johnston explains that public pensions are actually deferred compensation, and he faults “pack” journalists for accepting as gospel the Scott Walker version, without seeking to understand how pension systems actually work.

Johnston’s thoughtful piece reveals the dangers of reporting that, in the rush to get the story out, fails to fully tell the entire story, to dig for the facts. Subscribing to an easy objectivity that equates “balance” with the transcription of spin from both sides of an issue, reporting on the assault on unions has failed to truly inform. I’m reminded here of the late great Molly Ivins, who famously observed that

The very notion that on any given story all you have to do is report what both sides say and you’ve done a fine job of objective journalism debilitates the press…The smug complacency of much of the press—I have heard many an editor say, “Well, we’re being attacked by both sides so we must be right”—stems from the curious notion that if you get a quote from someone on both sides, preferably in an official position, you’ve done the job. In the first place, most stories aren’t two-sided, they’re 17-sided at least. In the second place, it’s of no help to either the readers or the truth to quote one side saying, “Cat,” and the other side saying “Dog,” while the truth is there’s an elephant crashing around out there in the bushes. Getting up off your duff and going to find out for yourself is still the most useful thing a reporter can do.

Ivins’s point was that, in an age of instant news gratification, reporters often are lulled into becoming merely stenographers, recording two sides of every argument, even when the facts clearly prove one side wrong. Too often reporters shy away from this duty because they have been conditioned to avoid what might appear as advocacy journalism at all costs, but in shying away from the duty of fully reporting and even disputing shaky facts cloaked in political hyperbole, we abdicate the all important “watchdog” function of the press.

And the perils of neutering the watchdog press, are today more dubious than ever. Last week, Sherry Linkon and John Russo argued that a coalition is needed to combat the multi-pronged assault on unions and public employees:

We need to build a movement that crosses boundaries – between public- and private-sector unions, the traditional working class of industrial, blue-collar workers and the new working class of retail and service workers, between the working class and the middle class, cities and suburbs, and among diverse types of organizations.

The need for this type of collaboration is clear, but the challenges of achieving it in the current media moment are enormous, and will require much more substantive and thoughtful reporting than has been dominating mainstream coverage to date.

Tim Francisco, Center for Working-Class Studies

Now’s the Time: Organizing in the Face of the Class War

Despite inspiring and massive rallies and protest campaigns, the two most visible attacks on America’s working class – the anti-union bills in Wisconsin and Ohio – have both been signed into law.  While the attack on public sector unions is, in itself, just the latest salvo in an ongoing class war, its effects will go far beyond the workers directly involved.  These bills will lead to restructuring of a variety of public services, from education and home health care to government offices and police stations.

Over the last 30 years, many of the economic battles have been fought on a local or regional level, and in many cases, only the most-directly affected workers got involved. In Ohio, for example, struggles over deindustrialization and organized labor occurred primarily in steel and auto factories in the northern part of the state, making statewide organizing against economic restructuring difficult because many workers  were not directly impacted.

But things might be different this time.  In most states, new limits on public sector bargaining will affect people in every city and town, as well as people in very different situations – workers, students, the elderly, families with young children, and others.   That creates opportunities for organizing cross geographical boundaries.  Similarly, these bills create potential new constituencies as students, younger workers, women, and people of color recognize that they will be disproportionately impacted. While blacks comprise 15% of all adult workers, they are 18.5% of the public sector workers, and Ohio Policy Matters found that of the 700,000 Ohio public sector workers more than 400,000 are women. Women comprise an even higher percentage of teachers in K-12 education, especially in traditionally Republican suburban areas. As Natasha Vargas-Cooper noted in yesterday’s New York Times, this attack helps create the potential for coalitions that will link the traditionally weaker unions representing female service workers with the more respected safety workers unions, dominated by men.

The latest battle in the class war may even draw some unexpected allies.  In Youngstown, one the nation’s fastest growing technology firms, Turning Technologies, has withdrawn from the Regional Chamber of Commerce in protest of its support  of SB5, as have two other local companies.  All of which is to suggest that mobilizing around public sector ballot initiatives and recall campaigns could be both wide and deep.

Getting thousands to show up for rallies or write letters in the fever of the initial public sector skirmishes hasn’t been that hard.  Over the last two months, people have been angry, and they wanted to take action.  And while making the drive across the state to be part of a crowd of tens of thousands is a significant commitment of time and energy, it’s also exciting.  As the videos showing witty signs and costumes remind us, protesting can be fun and even aerobic.

But now is the time for on the ground organizing, and the work ahead will be less dramatic and in many ways much harder than showing up for a protest or writing a letter.  Going door-to-door to get signatures can be thought of as hand-to-hand combat where individuals have to be informed and ready to perform in a sometimes hostile environment. But it’s also essential to the political process, especially given the amount of money corporations and conservative business interests will be spending on political advertising to defeat repeal/recall initiatives.

To make matters worse, organizers will have to overcome the effects of the dashed hopes of the  Obama presidency.  As Chris Hedges writes in The Death of the Liberal Class, progressives understand that the party they once counted on to advance their interests has sold out to the big money that controls so much of the political process.  Jacob S. Hacker and Paul Pierson review the political and policy decisions of the last few decades in Winner-Take-All Politics: How Washington Made the Rich Richer – And Turned Its Back on the Middle Class, tracing how corporate influence has pervaded Democrat Party politics and caused growing inequality in America.

At the end of their book, Hacker and Pierson suggest several key elements for changing the trend toward inequality, including “facilitat[ing] broader participation among those whose voices are currently drowned out” and “encourag[ing] the development of groups that can provide a continuing, organized capacity to mobilize middle-class voters and monitor government and politics on their behalf” (303).  For decades, working people – including those who did not belong to unions – counted on the labor movement to fulfill both of these functions.

With shrinking numbers and new legislation limiting its capacity, the labor movement can’t do this on its own. Nor should it. While the laws being passed now focus on public sector unions, the war won’t end there.  In Ohio, bills are being proposed to ban overtime and institute “right to work” rules.  State budgets across the country and the House’s proposed federal budget all undermine support for working families and the poor, while refusing the challenge subsidies to business or to hold banks accountable for the financial crisis.  As we wrote last month, the working class is under attack on multiple fronts, and we need to stand together to fight back.

We need to build a movement that crosses boundaries – between public- and private-sector unions, the traditional working class of industrial, blue-collar workers and the new working class of retail and service workers, between the working class and the middle class, cities and suburbs, and among diverse types of organizations.  We need community organizers, churches, students, and others to work together.  In Youngstown, the Mahoning Valley Organizing Collaborative has organized its 44 neighborhood groups together with labor unionists, community faith-based groups, local non-profits and social service agencies to form a revenue coalition to fight state budget cuts.

And much of that collaborative effort must focus on the political process.  In Ohio, opponents of SB5 have to collect more than 230,000 signatures to get a referendum on the ballot, and then we need to do everything possible to get people out to the polls.  We need to mobilize the kind of engagement in the political process that put Barack Obama into office.  As a popular T-shirt from 2008 stated, we need to “be the change.”  Neither Obama nor the Democrats have done it for us.  It’s our turn.

We also need to take a page from the Tea Party.  Their efforts have contributed significantly to blocking the progressive possibilities of the 2008 election.  They succeeded by channeling their anger and fear into significant pressure on politicians.  We need to do the same.  That means we have to find the energy and commitment to keep on protesting, to challenge our elected officials – even those we think are most on our side – to truly represent us, and to get our share of the media spotlight.  We also need to keep in mind that despite the infusion of thousands of dollars from wealthy contributors, the Tea Party engaged in plenty of grassroots organizing.  We have to do that, too.  We need to be out there knocking on doors, talking with friends and relatives, gathering signatures for ballot and recall initiatives, and doing whatever it takes to put pressure on our elected leaders to support workers and our communities.

Here’s one place to begin: the National People’s Action “Showdown in Ohio,” May 16-17, to demand that businesses like J.P. Morgan “clean up their own mess.”  Join us in Columbus to show the world that the American working class isn’t going to back down.  And then go back to your neighborhood, your church, your gym, wherever it is you talk with anyone who might not be convinced, and tell them the story of how the rich are getting richer and the rest of us are losing our grip on the American dream.  Better yet, tell them your own story of how the war on the working class is making a difference in your community.

Sherry Linkon and John Russo, Center for Working-Class Studies