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Authors: Aaron Klein,Brenda J. Elliott

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For Demos contributors Osterman and Shulman, a kind of shock therapy will be needed in order to inaugurate such changes:

The status quo overall will not change unless companies are subjected to an external “shock” that forces them to rethink the way
they do business. [Such a shock] can come from laws enacted at the federal, state or local levels; from workers themselves organizing a union; or from the larger community demanding better quality jobs in exchange for some public benefit.


For Peck and Traub, nearly all of their prescriptions point to a familiar progressive constituency—unions. They remind us that “even manufacturing jobs were not ‘good jobs' until employers, government and unions adopted strategies to improve them generations ago.” They observe that people working low-wage jobs do not have as much buying power as workers who are better paid, that many of them are struggling, overburdened, and have to juggle “rigid and unpredictable work schedules” which may keep them from participation with family obligations or other tasks. So they prescribe one remedy: a higher minimum wage that would “raise the floor for all employees.” In addition, non-wage benefits such as “sick leave, paid family leave, and more control over their work schedules” would be included.

Demos executives Callahan and Draut concur, adding that government “can and should play a vigorous role in encouraging employers to create good jobs—perhaps by providing tax incentives that require employers to pay a living wage.”

The reference to a “living wage” comes straight from the pen of Karl Marx, author of the 1848
Communist Manifesto
. In his book on the living wage, Donald R. Stabile, professor of economics at St. Mary's College of Maryland, wrote, “Marx believed that only under communism could he find support for his ultimate goal of a living wage, ‘From each according to his ability, to each according to his needs.'”

Here is the real-world scenario of what a nationally mandated living wage could mean for America should Barack Obama win a second term. In the winter 2003 issue of
City Journal
, Manhattan Institute scholar Steve Malanga wrote that for more than a decade,

“[a] savvy left-wing political movement, supported by radical economic groups, liberal foundations, and urban activists” had lobbied
for a “government-guaranteed ‘living wage' for low-income workers, considerably higher than the current minimum wage.”

The living wage movement had succeeded in no fewer than eighty cities as of 2003. But as Malanga showed, this brought with it plenty of bad news:

The living wage poses a big threat to [the cities'] economic health, because the costs and restrictions it imposes on the private sector will destroy jobs—especially low-wage jobs—and send businesses fleeing to other locales. Worse still, the living-wage movement's agenda doesn't end with forcing private employers to increase wages. It includes opposing privatization schemes, strong-arming companies into unionizing, and other economic policies equally harmful to urban health.

Malanga cites Baltimore as exhibit number one. Baltimore embraced the living wage in the mid-1990s but failed to become a “workers' paradise.” Instead, the city saw its economy “crash and burn” while 58,000 jobs disappeared at the same time other cities across Maryland added 120,000 jobs and “other cities across the country prospered.” Malanga stated that the living-wage bill was “just one expression of a fiercely anti-business climate that helped precipitate Baltimore's economic collapse.”

While you might expect the Baltimore experience to serve as an example of what
to do, nothing could be farther from reality. Malanga wrote,

Baltimore “became the poster child for future activism,” where a “host of left-wing groups, including Ralph Nader's Citizens Action and the Association for Community Reform Now, or ACORN, joined forces in 1995 in a national ‘Campaign for an America That Works,' which made the living wage central to its demands.”

The impact, Malanga wrote, was national in scope as radicals took the “living wage” movement to “city after city.”

Central to this campaign was the anti-capitalist ACORN—the Association of Community Organizations for Reform Now. ACORN was created
around 1970 by former Students for a Democratic Society radical Wade Rathke. A 1960s colleague of Weatherman terrorists Bill Ayers and Bernardine Dohrn, Rathke is also the founder of an SEIU Local in New Orleans. The ACORN
People's Platform
of 1979 (updated in 1990) states:

[O]nly the people shall rule. Corporations shall have no role: producing jobs, providing products, paying taxes. No more, no less. They shall obey our wishes, respond to our needs, serve our communities.

As for the role of government, ACORN states, it is a “public servant for our good, fast follower to our sure steps. No more, no less.”

In fact, Malanga wrote, following on its 2002 success in getting New Orleans—ACORN's national headquarters—to enact living wage legislation, ACORN created a step-by-step manual, which “echoes” the coalition-building organizational techniques of influential radical theorist Saul Alinsky. The ACORN manual is a blueprint to everything one could want to know on how it was done and how it could be replicated elsewhere. Money is not a problem. Malanga discovered that ACORN had lots of it available to push the living-wage campaign. He cites two sources: the Tides Foundation, which had “given hundreds of thousands of dollars to local and national living-wage groups … [while] the Ford Foundation has been another big contributor.”

The Tides Foundation is a major legal money-laundering funding funnel for a myriad of progressive groups and causes. Rathke was a Tides founding board member along with Drummond Pike, has served as board chairman, and continues to serve as a senior adviser.

Malanga draws a clear picture for us of how ACORN—which has now rebranded itself with a number of state organizations since being exposed a few years back for corruption
—and similar groups, will advance the “living wage” via a stealth campaign:

Living-wage campaigns have repeatedly outflanked the business community by practicing what ACORN calls “legislative outmaneuver.” Local groups work behind the scenes for months before going public. They draft partisan economists to release timely studies on the
prospective benefits of the living wage before opponents can come up with any countering data, and they try to keep any actual legislation off the table until the very last minute, so that there's no fixed target for opponents to get a bead on.


Demos is our exhibit number one for such “partisan economists.”

Demos officials Callahan and Draut contend that, because the U.S. economy is stuck in a downturn, that is reason enough to make it “easier” for workers to join unions and put more disposable income into their pockets.
To prop up this straw man, the authors cite a separate contemporary report by Demos staffer Amy Traub, who asserts that “organized labor has traditionally played a crucial role in ensuring that working people—who make up most consumers—receive a larger share of the economy's gains.” Taking this to its logical conclusion, Peck and Traub write that legislation should be drawn up that would “more effectively” protect the “right of workers to bargain collectively for improved wages and benefits.”

Let us examine the flaws in this argument, bearing in mind the progressive strategem of not allowing enough time for public consideration of progressive think tank blather before their legislation can be rammed through.

First of all, we fact checked Traub's false and misleading statement that working people “make up most consumers.”
residing in the United States is a consumer, and fewer than half are active members of the workforce at any given time. Second, nothing legally bars workers from joining unions. If a union exists and people want to join it, who will stop them? And why does the Federal government need to have a role in removing a nonexistent barrier? Since 1935, with the passage of the National Labor Relations Act, or Wagner Act, it has been a matter of federal law that workers in the private sector have the right to create labor unions and enter into collective bargaining, without discrimination. And since June 1963 (
Labor Board v. General Motors Corp.
373 U.S. 734), although employees have the right to join and assist unions, they also have a right to refrain from supporting them. They cannot be required to join a union that represents their bargaining unit, to
remain in said union, or to pay full dues in the union (or they can pay but with the express exclusion of that portion used by the union for political purposes). By law, employees are not required to join a union or to pay full dues as a condition of their employment.

It is outrageous that progressive socialists in America have deemed union workers to be more equal than nonunion workers. Demos and its fellow travelers are actively promoting a massive political realignment in which union workers are entitled to a “larger share of the economy's gains” than nonunion workers. This is the progressive “fair share”!

And now we can proceed to how Barack Obama would use a second term to push for a “living wage.”

In February 2010, the Associated Press reported that a company paying a “living wage” to its workers “could gain an advantage in bidding on government contracts under a new policy the White House is considering.”
Called “high road” contracting, the White House move would be designed to lead to a “larger debate over whether the government should use public purse strings to strengthen the middle class and promote higher labor standards.” As we have seen, in reality this would benefit mainly unions and union workers, and so, unsurprisingly, the unions were all for the plan, claiming that “too many jobs financed by government contracts come with low wages and limited benefits and support companies that violate employment laws.” Nor would the advantages contained in the Obama living-wage plan be exclusive to wages (as was shown above in the Demos literature). It would also promote benefits such as health insurance, retirement funds, and paid leave.

Right on cue, “partisan economists” at a leading progressive think tank, the Economic Policy Institute, estimated “nearly 20 percent of the 2 million federal contract workers in the U.S. earn less than the poverty threshold wage of $9.91 per hour.” The über-progressive think tank, the Center for American Progress, chimed in that there was “evidence that better-paid workers are more efficient and productive.”

Another deceptive claim is that unions “raise compensation for workers they don't represent.” The Demos officials based this claim on a March 2011 study by two professors—Bruce Western of Harvard and Jake Rosenfeld of the University of Washington–Seattle.
In essence, Western and Rosenfeld
view union membership as an equality redistribution mechanism for all wage earners. They note the steep decline in private-sector union membership between 1973 and 2007 and then postulate that if union membership would expand, wages for all workers—union and nonunion—would necessarily go up. But, in the real world, boosting union membership benefits unions, who, in turn, spend billions of dollars of union membership dues supporting Democratic candidates, who, in turn, support the union bosses' interests. Yet another form of incestuous, progressive cronyism.

, R
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A universal theme for all aforementioned progressive think tanks is more regulation.

And if there is one thing at which the Obama administration has succeeded spectacularly, it is the explosive proliferation in the number of federal regulations in less than four years, particularly job-destroying ones. (An Internet search on “Obama + regulations” reveals two results competing for the highest returns:
Obama regulations costing jobs
Obama regulations killing jobs
. Not a good sign.) Eight months into Obama's administration, a Minneapolis–St. Paul labor lawyer warned her colleagues:

The Obama administration is slated to awaken this slumbering dragon…. Attorneys who represent employers, employees, and unions would be wise to remain apprised of these impending changes.

Over at the online publication of the communist Workers World Party—
People's World
—its co-editor could scarcely contain his jubilation when he reported, in January 2012, that the Obama administration had “moved under the radar over the last month to issue some of the most pro-worker rules the country has seen in 35 years. The new rules cover union elections, hours of work and wages, among other things.”

Exactly how was Obama already moving “under the radar” on behalf of Big Labor? And what kind of stealth actions might lie ahead in a second Obama administration?

Barely a week after the 2008 election, the Associated Press was writing:

“Unions look to Obama to help advance their agenda.”
“The labor unions that helped Barack Obama win the White House are looking for some payback,” reporter Jim Abrams wrote.

One key organization in this effort is the president's Economic Recovery Advisory Board. Created in early February 2009, the board included two of the top union officials in America: Anna Burger and Richard L. Trumka.

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