For those who have been tracking the headlines this year, it should come as no surprise that American workers are fed up. The nation has seen multiple teacher strikes, just recently there was the General Motors strike, and this October's upcoming Kaiser Hospital strike is set to be the largest strike in the US since 1997. Prices have gone up, wages have remained stagnant, employment has become increasingly part time or temporary, and benefits are nearly non existent. American workers are taking a stand.
But it didn't get this way overnight.
For decades now businesses have operated under a mantra of enriching their CEOs and shareholders, keeping the majority of their employees from enjoying the success of their businesses. Companies have shifted towards an idea that success is defined by the profits given to shareholders and executives, not workers. Lawmakers have simultaneously chased the alluring promises of supply side economics by passing major tax cuts for the rich, deregulating business, and enacting union busting policies. Americans have endured year after year of this failed economic experiment and have only fallen further and further behind.
Take General Motors, for example. In 2017 they received a massive corporate tax cut aimed at increasing the bottom line of large corporations like themselves. Rather than using that surplus to increase wages or increase benefits (like the GOP promised business would), they instead used their windfall to pay out billions in dividends and bought back nearly $10 billion of their own shares. The only thing the workers received was a surprise when GM announced they were cutting 14,000 jobs and shifting many of their factories out of the country. These kinds of decisions are the result of executives and board members who view short term profits as their only goal. This kind of thinking is greedy and cruel, but more importantly, it's bad economic policy.
Our economy is 70 percent consumer driven, meaning that our economic wellbeing is in large part dependent on working people's success. , and that spending will generate profits for our businesses, and require businesses to hire more employees to provide more services. When these companies dole out bonuses and raises to their top executives, they're doing little to help the economy. Take it from a former Wall Street managing director, when wealthy people have more money, their investment portfolios get larger, essentially taking it out of the economy, helping no one but themselves. Giving tax breaks and capital to the 1 percent doesn't help anyone—except maybe a few private jet and yacht companies.
To build an economy that works for everyone, we need to ensure that all workers have access to food, reliable healthcare, clean air and water, and affordable housing. No one does quality work on an empty stomach or if they're worrying about whether they'll be able to pay the rent that month. The payoff of investing in workers may not always be instant, but its long term benefits are more valuable than stock dividends or buybacks.
An economy based on rewarding those at the top has monopolized the majority of capital to a select few. Soaring corporate profits don't put food on the table for most Americans. Workers and younger generations especially have seen this first hand and are beginning to take action to change it. It's time we start measuring the success of our society differently, and stop placing the short term needs of businesses above the long term interest of both business people and consumers.
Morris Pearl is chair of the Patriotic Millionaires and former Managing Director at Black Rock Asset Management.
The views expressed in this article are the author's own.
