At the heart of capitalism is a constant struggle between management and labor.
Management wants maximum profit, which means paying the lowest possible price for the labor that produces its goods. Labor wants the highest possible price for its work, including the salary it trades with management for benefits like healthcare.
That struggle plays out in our politics, in the battles between what is broadly the party of labor, the Democrats, and the GOP, which has become the party of management. Both coalitions have their odd bedfellows. For Democrats, it’s unions and urban, coastal elites. Republicans’ strange brew includes vehemently anti-union working class voters, mostly in the southern and central United States, who line up with management, believing that what’s good for business eventually trickles down to them.
And despite taking an electoral shellacking with a presidential candidate who neatly fit the stereotype of the heartless CEO, the party of Calvin Coolidge has staked its future on beating back what’s left of organized labor.
American society fundamentally changed in the early 20th century, when unions made it possible for workers, banding together, (with some notable exclusions, like, say, black and brown laborers), to negotiate living wages and benefits with big business on a roughly equal playing field. Of course, the playing field is never really level. Business can find ways around labor, by automating, outsourcing or simply shutting its doors (just ask the Hostess employees).
Still, the net effect of the balance of power shifting toward employees was to drive up the price of American work. Especially through the mid-20th century, rising wages meant the average American family (though by no means every one) could buy a home, fill it with the latest gadgets, put a car in the garage, and often with just one adult working. The “wealth effect” of cheap credit only amplified the trend.
Big Business fought back, through their lobbyists and pet politicians (of both parties), winning rampant deregulation, corporate welfare, and a tax code larded with goodies for the well-to-do. These days, low prices for food, electronics, and consumer goods, made in China and sold by $8-an-hour U.S. workers with no health insurance who have to go to work on Christmas, mask the income stagnation that with the exception of the go-go ’90s, has become the rule for Americans who punch a clock.
Outsourcing has given business the promise of not just lower cost labor, but dirt cheap labor. And when foreign workers get hip to the game and demand higher wages? Enter “right to work,” which has turned much of the American South into a lower wage, low-tax haven for companies seeking less costly, less troublesome labor here at home.
These laws pull double duty. They cripple unions, which happen to be about the only Democratic-leaning entities capable of competing — in money and manpower — with the political resources of the right. And they drive down labor costs.
Economists agree that right-to-work states like Florida, Louisiana and Texas, have lower average incomes, and higher poverty rates. But once some states go “right to work,” unionized states are incentivized to race to the bottom with them, to compete for scarce new jobs.
The counter argument from the right is that cheap labor improves the lives of working people by making their purchases more affordable. To their minds, people should be grateful to the “job creators” for any work at all. In their version, they’re freeing workers from pushy unions that distort wages and kill business profits, resulting in fewer jobs.
That view finds some currency among private sector employees, who face job insecurity themselves and have little sympathy for pension-packing lifers who got sweet deals back in the day. It’s a dog-eat-dog world, and the working stiffs are snarling at each other.
Yet, Republicans have faced tremendous push-back while forcing through anti-union laws in Ohio, Wisconsin and now Michigan — home of the historically unionized auto industry and, now, the 24th “right-to-work” state.
Clearly the GOP, which also opposes increased education spending to produce more high-skilled workers, is betting that over time, the anger will recede, or that the South’s aversion to unions — and to Democrats — will spread northward, even as U.S. workers join the depressing global scramble for low wage jobs.
It’s a risky and aggressive bet. Like Ohio and Wisconsin, Michigan labor seems prepared to resist. And Republicans could pay a price in the next election.
But for now, its advantage: management.