The heart of an antipoverty strategy is jobs—not just any job, but good jobs that bring with them enough income to live on and jobs that are at least ladders to jobs that pay a decent wage. And the heart of a strategy to create enough good jobs is a healthy economy, complemented by thoughtful public policy that maximizes workers’ incomes. For most of the past forty years, the American economy has been successful in producing jobs but distressingly unsuccessful in producing jobs that lead to a livable income.
The largest single determinant of the twenty-first-century picture of poverty in America—putting aside the massive unemployment of the current recession—is the huge number of jobs we have that don’t pay enough to live on.
In 1967, the Nobel Prize–winning economist James Tobin wrote an article in the New Republic titled “It Can Be Done! Conquering Poverty in the US by 1976.”1 His first claim was that “economic growth is still our most potent weapon.”2 There was more, including a proposal for an “incentive income supplement” to replace welfare that would have strengthened the safety net in times of recession.3 But the heart of his optimism was an implicit confidence that the nation’s economic growth would continue, and that with such growth would come the jobs that are the backbone of a nation with minimal poverty. Six years later, his prognostication still looked good: as noted earlier, the poverty rate declined to 11.1 percent in 1973.4
But potholes in the path of progress had also begun appearing. Industrial jobs, such as those in auto and steel plants, had been godsends for propelling the poorly educated sons of Appalachia and the Deep South into the middle class. But by 1973, many factories had moved south to get away from union wages. The nature of work was shifting toward jobs that required more skills. People without high school diplomas were more often coming up short in their efforts to find good jobs.
Politics were changing, too, and not just in regard to welfare and criminal justice. The election of President Nixon also brought to the fore an energized business community determined to dial down Washington’s interference in their activities, a goal often antithetical to the interests of their workers. The Democrats still controlled Congress, but the suburbanization of the country was changing their profile and priorities (and southern Democrats still held the balance of power in Congress on many issues). Their core constituencies in the North and the West were still the unions (although not necessarily all union members) and minorities, but the battlegrounds—the places where they had to win to hold Senate seats and stay in the majority in the House—were shifting to the suburbs. A Democrat who wanted to win votes in the suburbs had to be for the environment, for good government, for the free market (with some regulation), for choice on abortion, for dovish foreign politics, and quite possibly against school busing and affirmative action.
Nineteen seventy-three—the year of the first foreign oil shock—was a watershed year in the economy. The economic indicators that had been so consistently positive for nearly thirty years swerved into a sudden U-turn. Coincidental or not, one of the most telling changes in direction was the trend in wages for African American men with high school educations or less, wages that had risen steadily since 1945 but now swung in the opposite direction. The economy softened. Wages for those earning less than the median wage stagnated and—at the bottom—lost ground to inflation.
Wage growth in the bottom half of the labor market basically stopped. The median wage job paid $14.97 an hour in 1973 (in 2010 dollars), but increased only to $16.01 an hour in 2010, an increase of 6.9 percent over thirty-seven years, or less than 0.2 percent annually.5 Things would have been even more grim but for the increase in real income during the tech boom in the last half of the 1990s.
The result is that half the jobs in the country pay less than $34,000 a year and a quarter pay less than the poverty line for a family of four. Families with two earners can do all right, but the large number of families with only one earner—typically a single mother—are in big trouble.
In retrospect, the 1970s were the run-up to the election of Ronald Reagan—the great turn to the right in post–New Deal politics that slammed the door shut on the New Deal era. Looking back, the signs had been accumulating. Jimmy Carter’s presidency was the period of so-called stagflation: simultaneous high unemployment and high inflation, which was especially tough on people earning less than the median wage.6 But that was just the beginning.
Other signs were in areas critically important to lower-income people. The unions in the private sector were losing power, and, not coincidentally, the minimum wage began losing ground relative to inflation.7
The trend in the overall economy was the great shrinkage—due to relentless global competition and technological change—in the availability of high-wage industrial jobs that didn’t require extensive education and the increase of low-wage (mostly service) jobs in their stead. The new low-wage jobs included cleaning hotel rooms and homes, taking care of children, working in retail stores, serving fast food, emptying bedpans in hospitals, standing as security guards, and staffing consumer support lines—some of them involving tasks previously done at home by wives who were now in the labor market. Today, manufacturing reflects less than 10 percent of employment, down from 28 percent in 1960.8
As the nature of work changed, so, too, did the size and composition of the labor force. Women in large numbers sought employment, as did new immigrants, some in the country legally due to the historic 1965 immigration act but also some undocumented. Baby boomers joined the labor force in large numbers, too. The economy performed impressively in absorbing so many new entrants, but did badly regarding the remuneration of workers in the bottom half.
The question is why were (and are) the wages at the lower end so low. Other countries experienced a loss of industrial jobs to less-developed countries and similar growth in poorly paying jobs, but they managed to mitigate these wage disparities better than the United States did. So why did it not happen here?
One big factor is what happened to unions. They began losing ground, both in organizing and in their political clout in Washington, D.C., and the states—ground they continue to lose to this day. Even during the Carter years, with sixty-one Democrats in the Senate (as well as some “moderate Republicans,” a political breed now extinct) and a large majority in the House, the unions were unable to break a Senate filibuster of a bill that would have made it easier to organize, despite the fact that it was their major objective and was strongly backed by the president.9 President Carter also proposed to index the minimum wage to the average wage for manufacturing employees, but he lost on that, too.10 The National Labor Relations Board (NLRB) could not keep up with the volume of complaints about the ubiquitous union-busting tactics by businesses the unions were trying to organize, particularly since employers fought every complaint vigorously. And once President Reagan was elected, he filled the Labor Board with antiunion appointees who turned a completely deaf ear to such complaints.
To some extent, unions were victims of their own success. Some factory workers, now middle class, had moved to the suburbs and accordingly thought they didn’t need a union any more. Some lifelong Democrats even migrated to the Republican side; others, still staunch unionists, voted first for George Wallace for president and then turned Republican because of their anger over school busing and affirmative action, despite knowing that Republican and pro-union tenets were increasingly contradictory.
Overall, unions lost ground for three reasons: employer opposition and weaker laws, structural changes in the economy toward white-collar work and largely decentralized services and away from sectors where unions were historically strong, and more product and labor market competition around the world.11 Unions have more trouble thriving in a world in which industries are no longer organized as stable clusters of a few big firms with large profits to share. When unionized companies face nonunionized competitors, whether at home or abroad, increases in labor costs can no longer be passed on to the consumer. Increased competition through international trade and deregulation made it more difficult for unionized companies to continue to prosper.12
An important chapter in the story of union decline centers on the resurgent political activity of the corporate world in the 1970s, activity that came along in a most timely way to finance the rising cost of political campaigns and elect pro-business candidates. This swing was coupled with changes in the attitude of the electorate—not only the suburbanization of the Democratic Party but also the enhanced power of Sunbelt states due to migration and the political awakening of evangelical Christians after Roe v. Wade. In other countries—France being one example—unions are not overwhelming in their numbers but nonetheless have broad public support. The changes in voter attitudes in the United States are surely a factor in the decline of unions.
So the political losses of the unions were not accidents, and corporate interests did spend large sums of money lobbying for the other side. Nor was this renewed activity of big business fortuitous. The year 1970 had seen a wave of labor unrest second only to that of 1946 in postwar years: 2.4 million workers out on strike for extended periods, thirty-four strikes involving more than ten thousand workers, and a slew of slowdowns and wildcat strikes.13 Inspired by the civil rights movement and the 1960s inclination to “question authority,” there was a new restlessness among younger workers, who rebelled against their sclerotic leadership and sought democracy within their unions. This trend was as threatening to business as it was to the union leadership. By the time Jimmy Carter took office, the new political vigor of big business had taken hold, along with continuing globalization and the alteration of the economy, and the die was cast against the unions.
The numbers are well known. Unions represented 31.8 percent of the labor force in 1948.14 By 2010, they represented a mere 11.9 percent.15 The demise of unions has been especially significant in the private sector. Private-sector union membership was 24.5 percent in 1973, 16.5 percent in 1983, 11.1 percent in 1992, and only 6.9 percent in 2006.16
If the weakening of unions in fact did play a big role in the growth of wage inequality in the United States, we would expect to see greater disparity in wages in the United States compared to those in countries with stronger unions. That is exactly the case. In a 1996 study, Cornell economists Francine Blau and Lawrence Kahn looked at seven countries and discovered that the wage differential between workers in the fiftieth percentile and those in the bottom tenth percentile in the United States was larger than in any of the other countries they examined. The UK was the only other country that had experienced decreases in union membership comparable to those in the United States, and it saw a similar growth in wage disparity.17
The campaign against unions continues to this day, taking the form now of virulent attacks on public-employee unions. Now even the public-sector unions—the last vestige of strong union membership—are feeling the pressure from politicians whose campaigns are heavily funded by corporate money. Not satisfied with the atrophy of unions in the private sector, the new wave of right-wing Republican governors paints public employees as caricatures of the Mandarin elite, with deliciously early retirement opportunities and gilt-edged pensions, all achieved by overreaching unions that are soaking taxpayers. Witness Wisconsin governor Scott Walker, who acted to take away state employees’ right to collective bargaining even after the unions offered heavy concessions. And add to the antiunion list Ohio governor John Kasich and New Jersey governor Chris Christie.
Nor are these governors the only attackers. The radical right House of Representatives has passed legislation—virtually overnight, with no debate—to eviscerate the NLRB. That legislation will not survive in the current Senate, but the House will meanwhile pursue its agenda by slashing the NLRB’s appropriation—a strategy that may have considerable success in a world of budget-cutting where the only action is in the zero-sum area of domestic discretionary spending.
The weakness of the minimum wage was a second major factor. UC Berkeley economist David Card and Princeton economist (and, as of 2011, chair of President Obama’s Council of Economic Advisers) Alan Krueger estimate that 20 to 30 percent of the rise in wage inequality in this country can be attributed to the decline in the real value of the minimum wage.18 When it was first enacted during the New Deal, the minimum wage was set at a level that was half the average wage. The current $7.25 minimum wage was just 39 percent of the average wage in 2010. If the original minimum wage had kept pace with the increases in the average wage, it would have risen to $9.30 in 2010.
There is a long-standing argument among economists about whether raising the minimum wage destroys jobs. Pathbreaking work by Card and Krueger in the 1990s suggested that reasonable increases in the minimum wage do not have any negative effect on jobs.19 Arguing the other side, UC Irvine economist David Neumark posits that the bulk of the research conducted since 1990 shows minimum-wage increases have a negative employment effect on low-skilled workers.20 Needless to say, Card and Krueger and many others disagree. In a different category from Neumark are the arguments of people whose views are simply ideological. Alan Greenspan, for example, told Congress in 2001 that, were he able, he would abolish the minimum wage, because it is “artificial government intervention” that hurts jobs.21
Putting Greenspan’s extremist views aside, a reasonable reading of the research supports continued strengthening of the minimum wage. It is true that, in today’s globalized world, employers can more easily eliminate jobs when costs rise, although it’s also the case that a large share of minimum-wage jobs are in service sectors that are not involved in global competition and cannot be replaced by technology. Consider home health care. My instinct has always been that any minimum-wage increase that is politically feasible is not one that would have negative economic effects. In any case, the weakening of the minimum wage is part of the story of the weakening of wage levels at the bottom.
A third factor was the flood of new entrants into the workforce beginning in the 1970s because of immigration, of the baby-boomers coming of age, and especially because of the large numbers of women who decided to work outside the home. That these groups found jobs in large numbers—albeit in disproportionately low-wage work—was remarkable, particularly in light of the fact that so many industrial jobs were being lost at that time.
Women went from constituting 35.3 percent of the workforce in 1969 to 49.9 percent in 2009, the year when women constituted half of all workers for the first time.22 The percentage of women with children under six who were working in 1975 was 39.6; in 2008 it was 64.3.23 Four in ten mothers are now the sole or higher-earning breadwinners in the home.24
Women’s wages went up overall, but many women in low-wage work did not fare better. Remember that close to half of all female-headed families with children live in poverty. Single mothers are far more likely than are women in general to have low-wage jobs. Nor is child support playing the role it should be in filling the gap. Only 42 percent of custodial mothers are receiving child support from their children’s fathers, and fewer than half of those receive the full payments ordered.25 These numbers have improved over the past few years, but we have a long way to go.
Immigration and trade have played a role, too. The question about immigration is not whether it had an effect on wages at the lower end, but whether the effect was significant. Between 1970 and 1996, the population of foreign-born people in the United States increased by 15 million. Arriving immigrants have less schooling than does the average American, and that gap has been ever increasing, so it is not surprising that these immigrants are more concentrated in low-skill jobs,26 although the overall composition is becoming bimodal as more and more higher-skilled workers have been entering the country. Nonetheless, Harvard economist George J. Borjas and his co-authors, who earlier estimated that immigration had only a modest effect on wage disparities between 1980 and 1995,27 concluded in a later study that subsequent immigration did harm the employment opportunities of competing native workers.28 On the other hand, David Card, using a different methodology, contends that immigration has not had a significant negative effect.29
There are obviously two quite separable issues here: legal immigrants and undocumented workers. It stands to reason that all immigration of low-skilled workers, because it expands the labor supply, will tend to depress wages. Nonetheless, reams of research conclude that our current legal immigration policy is on the whole a plus, all things considered. The broader question concerns undocumented workers. Our policy has been totally hypocritical. On one side, we express horror at the number of people here illegally, but until recently we have taken practically no steps to prevent employers from hiring and then exploiting undocumented workers. We have been like a schizophrenic police officer who purports to stop traffic with one hand but waves it along with the other. This is unacceptable. It has produced inhumane treatment of undocumented workers by employers—dangerous working conditions; illegal pay levels; and, all too often, total dereliction of pay. We have enabled employers to hire people at a significantly lower cost than what they would have to pay citizens and legal immigrants. The oft-repeated declaration that these are jobs no one else would take is a gross distortion, although it is quite likely that no one else would accept a job on the exploitative and often dangerous terms imposed on undocumented workers. If the employers had to obey the law, most would still find workers—with the possible exception of backbreaking tasks such as farm work—even when there is no recession. It is just that they would have to pay more. Our policy should include a path to citizenship for those undocumented people already here, an effective policy at the border, and humane enforcement of immigration laws. At the same time, we need to find a way to penalize employers for hiring people in the country illegally without permitting discrimination against others—primarily Latino—who are citizens or are here legally.
Trade has had a clear impact on jobs. Whatever the facts were prior to the 1990s, NAFTA and other trade agreements have had a visible effect on jobs. There is substantial merit to the widely held view that such agreements should have had stronger guarantees of fair labor standards and environmental protections. Adherents of this view argue that fewer jobs in the United States would have been lost if such standards and protections had been insisted upon and implemented.
A somewhat different question, however, is how these agreements affected low-wage sectors specifically in terms of destroying jobs and lowering wages. The most recent research indicates that increased trade affects jobs at all levels. Labor economists David Autor, David Dorn, and Gordon H. Hanson found that, between 1991 and 2000, increased trade with China accounted for 19 percent of the decline in American manufacturing jobs in that decade, and a stunning 32 percent of the decline between 2000 and 2007.30 The entry of China into the World Trade Organization and the concomitant awarding of “most favored nation” status to China, as well as admitting China without regulatory standards, have had major impacts on American jobs. So have China’s blatant currency manipulations to keep the dollar high and the yuan low.
Some economists ascribe quite a different set of reasons for the weakness of wage growth in the bottom half of the labor market—“skill-biased technological change theory” (SBTC). Their basic argument is that technological change and a dearth of skilled workers precipitated what happened in the labor market. Computerization and the spread of information technology required more highly skilled workers, those who could command a wage premium. But, the argument goes, a sufficient supply of such workers was not forthcoming, a shortfall that left an overabundance of workers at the bottom. So, they conclude, the imbalance resulted in a bidding-up of wages on the top end and a pushing down of wages at the bottom.
The core of the argument is the idea that we missed a great opportunity by failing to educate and properly train enough workers—a supply-side failure, in effect. The story has some merit but recounts only a part of what transpired. Harvard economists Claudia Goldin and Lawrence Katz argue persuasively that, had educational attainment improved in the later 1970s and 1980s at the same pace as it had earlier, the demand side of the labor market would have adjusted to the larger supply of skills by generating more skilled jobs, albeit perhaps at a somewhat lower wage. Goldin and Katz and others believe that employers over the longer run will hire more skilled workers if there is a larger supply of skilled applicants. Employers claim, even now, that they have skilled jobs going begging in areas like nursing, engineering of various kinds, and such trades as electrical work because they cannot find qualified workers.31
The question, nonetheless, is how much weight to give the SBTC argument in explaining the overall outcomes for wages. An enormous number of lower-wage workers saw their wages barely go up or even decline over the past forty years. Given the number of low-wage workers, a mismatch between new, more technologically complex jobs and the number of workers available to fill them can at best be only part of the explanation for why the incomes of tens of millions of people stagnated or worse.
The SBTC hypothesis has driven policy arguments that are only part of what we need to focus on. SBTC proponents argue that education differences are the prime driver of inequality and that educational improvement therefore has to be a central policy focus at all levels of government. President George W. Bush’s treasury secretary, Henry M. Paulson, said, “[T]hose workers with less education and fewer skills will realize fewer rewards and have fewer opportunities to advance.”32
This is true, as far as it goes. Improvement of education is a must, and every person should pursue as much education as will maximize his or her economic prospects. Paulson pointed out that “in 2004, workers with a bachelor’s degree earned almost $23,000 more per year, on average, than workers with a high school degree only.”33 So of course everyone who has the ability to obtain a four-year degree should have the opportunity to get one.
But what works on an individual level is not the full answer for society as a whole. We have to focus as well on the number of “good” jobs that are available for people who go to the effort of getting a college degree or some equivalent postsecondary training. Declaring to everyone that getting a college education will fix everything is only half-true: the graduates have to be able to get a job after they graduate—not to mention to be able to afford that college education in the first place. Those who argue that extending postsecondary education to far larger numbers of people will solve the entire problem are shilling a modern form of patent medicine.
If we are to create an economy in which people are able to earn a livable income, we must answer four basic questions: (1) What can we do to increase the number of better jobs? (2) What can we do to increase the pay for the jobs we have? (3) What can we do if—after we do everything possible to raise wages for the jobs we have—the labor market still fails and jobs still do not pay enough to live on? and (4) What can we do to restore a more equitable distribution of income and wealth?
The first step to better jobs is a sensible and coherent national macroeconomic policy. The current impasse in our politics stands in the way of a full-employment approach. We have to move toward aligning our spending and our revenues, but one would not know from much of the political discourse in Washington that we still have an unacceptable number of people—15 million—out of work. Our policy should be geared in the short run to helping people get back to work. We should also legislate now to repair our fiscal future, with the plan to go into effect when the economy is on a stronger footing. But we should act immediately to bring big business and wealthy people back to the tax rates they paid in the 1990s when the economy boomed—and from which, by the way, they profited quite nicely. As things are, the naysayers are burying our national head in the sand.
In the short run, we missed a bet in 2009 in the design of the stimulus, and we are still missing the bet as recovery of jobs continues at an excruciatingly slow pace (although what we should be doing is no longer a political possibility). We should have learned a lesson from the New Deal and put 2 million people to work in twenty-first-century versions of the Civilian Conservation Corps and the Works Progress Administration. Having 2 million people working at important tasks and sporting distinctive shirts and caps would have created a visible national response to the recession. We could have enlisted state and local government in the effort so that it could be implemented quickly. The money earned by the participants would have begun circulating in the economy with a multiplier effect.
President Franklin D. Roosevelt’s job-creation programs spanned the period from 1933 until shortly after World War II began. They began with the Civilian Conservations Corps, which put people to work in the national parks and forests, and the Civil Works Administration, which grew quickly to more than 4 million workers and contracted into the Federal Emergency Relief Administration a few months later, in the spring of 1934. The more lasting initiative was the Works Progress Administration (WPA), which FDR presented as the centerpiece of his State of the Union address in 1935. The WPA was an expansive effort, with one division constructing important and attractive public works and public buildings that are still in use, and many other projects, including a variety of activities engaging artists, writers, musicians, and actors—even a circus. It employed as many as 2.8 million people over the extended period of its existence.34
In August 2011, Illinois representative Jan Schakowsky introduced the Emergency Jobs to Restore the American Dream Act, which would create more than 2 million new jobs over two years doing things we need to have done: 650,000 jobs building and maintaining schools; 100,000 jobs for young people to replicate the New Deal Civilian Conservation Corps; 250,000 work-study jobs to help college students put themselves through college; 350,000 jobs for laid-off teachers, police officers, and firefighters; 40,000 health care jobs for underserved areas; and 750,000 green jobs in weatherization, housing construction, and other tasks.
I don’t expect Schakowsky’s bill will be enacted by the time this book is published. I do understand she probably knows that, but that’s not the point. The point is that her bill was the right thing to do. Something like it should have been enacted in 2009 and is still needed now, sad to say.
For the longer run, one thing we need is to expand AmeriCorps and make it an avenue to the labor market for the huge number of young people who face a rocky road to steady work. AmeriCorps can also build civic values for participants of all backgrounds. It is important to remember that when the New Deal made retirement possible by enacting Social Security and removed children from the labor market by prohibiting child labor, it also reduced the number of people competing for jobs in a terrible labor market. Investing more in national and community service and making a strong effort to recruit low-income young people would now, among other things, have a similar effect in tightening the labor market. Nor will the problem with employment opportunities for job seekers in their late teens and early twenties end when the recession is truly over. We need to make the case for a much greater public investment in giving young people a chance to serve their communities and at the same time gather momentum toward more education and steady work.
The bigger question, of course, is about jobs in the private sector.
Looking at Bureau of Labor Statistics (BLS) projections for job growth in the coming years is an occasion for further gloom: fifteen of the top thirty job categories and seven of the top ten are rated by BLS as either low-wage or very low-wage. Four of the top ten are very low-wage—home health aides, food preparation and service workers, personal and home care aides, and retail salespersons. The only categories of better jobs in the top ten are registered nurses, accountants and auditors, and postsecondary teachers—although those three are in fact rated very high.35
My colleague Harry Holzer is less gloomy in his jobs forecast than I am. He has studied what he calls “middle-skill” jobs and finds hope there. To begin with, he rejects the argument that there is a “hollowing of the middle” going on which will result in an “hourglass economy.” He says that middle-skill jobs represented about 55 percent of all jobs in 1986 and—while they did decline over the ensuing years—in 2006, they still represented 48 percent of all jobs.
Middle-skill jobs, according to Holzer, cut across many sectors and pay from $40,000 to $70,000 annually. He includes many health care positions; skilled crafts in construction; skilled workers in manufacturing such as machinists and welders; technicians in equipment installation and repair jobs that will result from a shift to a “greener” economy; police officers and firefighters; and a variety of positions in the service sector such as legal aides, protective service employees, and cooks and chefs in restaurants. He states that “a wide range of evidence shows that employers often have difficulty filling these . . . jobs.”36
Holzer points to projections of increases in the number of middle-skill jobs and notes, importantly, that there will also be a significant number of openings created by baby boomers who will retire in the coming years. He does not deny that there will still be too high a percentage of low-wage jobs; his main assertion is that middle-skill jobs are an important category of work that will be available to young people of all backgrounds who pursue the education and training necessary to qualify for them. He emphasizes particularly the requirement of postsecondary education and training that these jobs entail—not necessarily a bachelor’s degree but postsecondary education and training broadly defined. I’ll talk more in a later chapter about what we need to do to provide the proper educational pathways.
I should also say a few words about “green jobs.” Green jobs are being touted by some as a major component of the future job picture. The premise is that our national good sense will lead us to make the public and associated private investments necessary to wean us away from our dependencies on foreign oil and fossil fuels regardless of their origin and to create a fully sustainable environment for our children. Doing so, proponents say, will create an impressive array of new jobs. Yes?
Maybe, but the prospects look much dimmer now than they did in the euphoric first days after President Obama’s inauguration. The first question, obviously, is whether we will have both the sense and the political will to make the necessary investments. If so, the investments will create jobs, although they will also destroy jobs in those energy sectors no longer favored. The second question is whether all the jobs will be good jobs—jobs that will support a family. And the third (of special concern here) is whether the jobs, insofar as they are good jobs, will be accessible to low-income young people just starting out and older people who are currently stuck in a low-wage rut.
Green jobs exist now across the economy. They include people who design, build, and retrofit homes and buildings; others who operate, maintain, and conserve all manner of “green” things; and still others who do the related business tasks of sales and customer service and accounting. They encompass employment in renewable energy and energy efficiency, construction, weatherization, clean transportation, environmentally friendly production, natural resource conservation, pollution mitigation and control, and sustainable agriculture. Some of the jobs are in “clean” areas such as solar and wind power, and others are in traditional areas that are becoming “green,” such as building construction and manufacturing processes.
Studies project that anywhere from 4 million to 16 million new green jobs will come on line over the next two decades,37 although many green jobs that had been expected to appear in the United States have shown up in China and Japan instead. Anything in the neighborhood of that higher number will be achieved only through public investment that leverages private investment, and only through a great deal of political will. Green industries will require subsidies and tax incentives, preferences in public procurement, loan guarantees to leverage private investment, and higher energy prices. Strong environmental regulation restricting carbon-based emissions, air and water pollutants, and solid and hazardous waste, as well as mandates for the use of renewable energy by utilities and minimum recycled content in some manufactured goods will be necessary, too.
Green jobs adherents profess full awareness of the challenges involved in ensuring that the jobs pay enough to live on. Effective labor standards will be needed. Subsidies and tax expenditures should be accompanied by requirements that workers be paid the prevailing wage. And energy-efficiency standards for appliances and other products should incorporate standards on wages and working conditions.
Civic partnerships at the local level will be especially important to delivering a fair share of the jobs to lower-income people, especially young people finding their ways into the job market. Proper education and training, delivered broadly, requires cooperation among schools, community colleges, community organizations, unions, and public agencies. Employers need to be involved in designing both the training and the process of placement. A strong partnership among all of these actors will be important in pulling together the required education and training funds.
Green jobs are a twenty-first-century idea. Their reality in scale and their relevance to lower-income people are still in question, but there is enough potential to warrant discussion in a chapter that discusses where the good jobs are going to be established.
Besides the macroeconomic policies we pursue to revive the economy, and beyond specific steps we take to create green jobs or other industrial policies to increase the number of jobs in the economy, we also need policies to see that the jobs we have are equally accessible to all. One thing this means is stronger enforcement of all applicable antidiscrimination laws. Another is to facilitate entry into the labor market for people who face particular barriers: the disabled, young people at the margins of inclusion, welfare recipients, ex-offenders, and the homeless, to describe a few. Of course, strong labor markets break down some of the barriers on their own, as they did in the late 1990s. So the bigger question is having enough good jobs, but the issue of equal access to the jobs we do have has been a challenge for a long time and still is.
Yes we can, to borrow a phrase. Raising the minimum wage should be a primary objective both nationally and at the state and local levels. Equally important is seeing to it that the laws we already have on the books are enforced. Wage theft is ubiquitous and comes in a dizzying array of forms. Beginning with simply not paying wages that are owed, there are literally dozens of different schemes. Some are even allowed by current law, but they all abuse workers unconscionably. Revitalizing union efficacy would make an enormous difference, too, although how to make that happen is no simple matter.
Last increased in 2006, the federal minimum wage is currently $7.25 an hour. A full-time, year-round minimum-wage job yields an income of $15,080—about $3,000 less than the poverty line for a family of three and more than $7,000 less than the poverty level for a family of four. When it was enacted, a decade after the previous increase, it came fairly close to the poverty line for a family of three, but even at today’s low inflation rate it is gradually falling back again. Raising it to $10 an hour, an amount that would put it roughly in line with that of 1968, would yield an annual income of $20,800—still below the poverty line for a family of four.
Would such an increase have an unduly negative effect on jobs? The research I cited earlier would suggest not (although that view is not unanimous). The minimum wage can and should be increased to a more adequate level. But, vitally important as the minimum wage is, it only makes a dent in achieving what our goal should be. And that is to raise incomes to a level of basic adequacy, or twice the poverty line—a level higher than the current individual earnings of 44 percent of working-age adults in this country.38 Other measures will therefore be needed to raise incomes beyond the level of the minimum wage, as I’ll discuss later in this chapter.
Also, the minimum wage and other labor laws still leave out some groups. The Fair Labor Standards Act (FLSA) is still interpreted to exclude home care workers from both minimum wage and overtime protections, although as of January 2012 a new Department of Labor regulation to rectify this is pending. The FLSA also excludes agricultural workers from overtime. Domestic workers are not covered by federal job-safety laws or overtime pay requirements. Nor does the National Labor Relations Act accord the right to organize to agricultural workers or domestic workers.39 When I went with Robert Kennedy to meet César Chávez in 1966, I don’t think any of the three of us thought that such a hole in the law would still be there nearly half a century later.
The federal minimum wage does not operate in a vacuum. Seventeen states and the District of Columbia—generally jurisdictions with higher costs of living—have minimum wages higher than the federal minimum. Only five have no minimum wage of their own. State minimum-wage laws are still important targets for improvement, but what advocates and organizers accomplished with the state minimum wage during the past decade is an important case study, particularly because it is an example of successful advocacy by unions in partnership with others.
The federal minimum wage was stuck during the Gingrich years at $5.15 an hour and was steadily losing ground to inflation. The Service Employees International Union, along with other unions and some faith-based and community groups, decided to pursue change at the state level through legislation and ballot initiatives. Campaigns to raise the state minimum wage were successful in Oregon, Washington, and California, and were followed in 2004 by spectacular successes in Florida and Nevada, ones that included annual cost-of-living increases and engaged low-income voters in the process.
These successes led to plans in 2006 for ballot initiatives in eight more states, and merely the threat of such a campaign led the legislatures in Michigan and Arkansas to raise the minimum wage by statute and thereby head off a possible skew toward Democratic candidates if there was a ballot measure that would draw low-income voters. These remarkable state changes played a major role in paving the way for the federal increase to $7.25. By 2007, thirty-three states had raised their minimum wages—some to levels more than 50 percent higher than the federal minimum wage. The number with levels higher than the federal level went from ten in 1999 to seventeen (plus D.C.) at present.
Governments have other points of leverage on wages, too. A recent study reported that employees of federal contractors are paid less than federal workers—20 percent of contractors’ workers are paid less than the poverty line for a family of four, compared to 8 percent of the government’s own employees. States offering tax incentives to entice businesses to relocate could require that they pay their employees a decent wage, as some already do. Reimbursement regimens in health care could also require that nursing homes and home health agencies pay wages above the poverty line.
Dozens of local governments require a “living wage” for employees of businesses to which they award contracts for services or tax abatements for development projects. They typically require a wage of $10 an hour with benefits and $11.50 without. Critics claim that such laws deter economic development or hurt employment, but a recent Center for American Progress study of fifteen cities with living-wage laws found the same levels of employment growth as in similar cities without such requirements.
The all-too-real world of low-wage work is sordid beyond belief and has worsened with the flood of undocumented workers. The most heinous of those involved are the employers who just plain cheat their workers out of pay and blatantly flout health and safety rules. Dishwashers, office cleaners, day laborers, nannies, health care aides, packinghouse workers, and sweatshop factory employees by the millions in cities and towns across America endure this reality every day. If employers don’t outright withhold overtime or even a basic paycheck, they evade the law by using subcontractors and pretending not to know what is going on under their noses, or classify their employees as independent contractors and thereby shirk their own responsibilities. Unlawful deductions from wages and off-the-clock work are common. Chicago organizer Kim Bobo’s excellent book Wage Theft in America lays out the issues in stark terms.
Researchers surveyed workers in Chicago, Los Angeles, and New York and learned that in just the previous week 26 percent had not been paid the minimum wage and 76 percent had not been paid for overtime.40 A national survey in 2006 found that at least once in the previous two months, half of all day laborers received no compensation at all. A study of New York City restaurant workers in 2005 found 13 percent had not been paid the minimum wage and 60 percent were neither compensated for overtime nor received required rest breaks. In Massachusetts, from 1995 to 2003, misclassification of workers as independent contractors jumped from 8 percent to 19 percent.41
The amount of money being stolen from workers is astronomical. The study in Chicago, New York, and Los Angeles concluded that workers in those three cities lose an average of $56.4 million every week because of law violations.42 Annualized, we’re talking about $2.5 billion in just those three cities.
Workers are scared to file complaints for fear they will be fired or, if in the country illegally, deported. Law-abiding employers feel pressure to cheat and thereby not lose business to shady competitors. Enforcement agencies are woefully understaffed, and, depending on which party is in power, they fail to use even the limited capacity they have. The Government Accountability Office reports that enforcement actions by the Department of Labor’s Wage and Hour Division dropped by more than a third from 1997 to 2007, a fact not unrelated to which party was in power for most of that period.43
The Obama administration added about 250 inspectors to the Wage and Hour Division, bringing the total number to nine hundred.44 The states contribute about six hundred more inspectors to the mix. But with 8 million workplaces to cover, the challenge is still daunting, to say the least.
Still, there is much that can be done. The National Employment Law Project (NELP) and dozens of other advocacy organizations, including unions such as the Service Employees International Union (SEIU), have come together in a Just Pay Working Group to strategize and act. They are working with the Labor Department to target high-violation industries and—rather than waiting for individual complaints—consult with outside groups that are knowledgeable about the situations on the ground.45 NELP has also published a lengthy advocates’ policy guide on wage theft that offers more than two dozen suggestions for state and local legislation.
The states of Colorado, Illinois, Maine, Maryland, New Mexico, New York, and Washington have all toughened laws against wage theft, embodying recommendations of the Just Pay Working Group and NELP. All were the result of organizing and advocacy by unions, faith-based groups, and sundry other allies. During the summer of 2011, San Francisco enacted a Wage Theft Prevention Ordinance that was the result of a campaign led by the Progressive Workers Alliance, a coalition spearheaded by Interfaith Workers Alliance, the Chicago-based organization headed by Kim Bobo that works closely with NELP and SEIU. The ordinance embodies many of the provisions in the NELP policy guide: doubled retaliation penalties, penalties for not posting minimum-wage notices, a requirement that employers notify employees of a pending investigation, and a mandate that all cases be resolved within one year.
If there is a silver lining in the current mess, it is that perhaps it will get people to see the importance of banding together to protect themselves. Nonetheless, the prospects for broad-scale union revitalization in the immediate future look pretty dim.
The unions need labor law reform in order to have a reasonable shot at neutralizing the effective advantages employers have when unions try to organize. Currently, employers can get away with firing organizers among their employees and with stalling contract negotiations almost ad infinitum even when a union is successful in winning an organizing vote. Most important to the unions is the Employee Free Choice Act legislation, which would reform the way in which elections are conducted. They were unable to get such legislation when Carter and Clinton were president, and their quest gave way to other administration priorities during the first two years of the Obama administration.46 Having a Democratic majority, even sixty votes in the Senate, doesn’t mean there is a super-majority or even a simple majority when it comes to labor law reform. If that fact doesn’t speak volumes about the state of our politics and about who holds sway, I don’t know what can.
I do not mean to paint a picture that is wholly bleak. Unions—some of them, anyway—are still an important progressive force. The state minimum-wage story and the current work on wage theft are only two recent examples of important changes in which unions have played a major role. These examples suggest the possibility of a European model of a more general-purpose political and social advocacy role for unions to pursue on behalf of their members.
Here’s the situation. Surprising as it may be, we do not have—nor are we going to have any time soon—enough good jobs for all people to earn a decent income. In 2010, 103 million people in this rich country had incomes that did not ensure their regular ability to pay for such essentials as food, housing, and health care, much less accumulate any savings—incomes of less than twice the poverty line, or less than $44,000 for a family of four.
The minimum wage, raised to the maximum that is possible politically, cannot get us to where we need to be. Unions, fully revived, will not get us there either. We have become a low-wage nation. “Bipolar,” one might say, where those at the top have absconded with all the fruits of economic growth over the past forty years and continue to feather their nest even when millions of people are in deep trouble. A well-functioning economy in a prosperous nation surely ought to produce jobs that pay a living wage to every worker.
There has to be something else—actually, more than one something else. Fortunately, we do have some policies that work. They don’t close the income gap, but they do make a big difference in people’s lives.
These measures come in two categories: one directly raises the incomes of low-wage workers, mainly parents in families with children; the other is what I call “matters of societal responsibility” that also have the effect of adding to incomes. These include health coverage, assistance with the cost of housing, child care, and postsecondary education.
The federal Earned Income Tax Credit (EITC) is the leading income supplement. It is a great policy and a political success, at least up to now. It’s what is called a refundable tax credit. “Refundable” means that the government writes a check to the taxpayer, who otherwise owes no federal income tax or owes less than the amount of the credit.
The benefit increases each year to keep up with inflation. In 2011, the EITC added a maximum of $5,112 to the annual income of a minimum-wage worker with two children, an amount that gets a family of that size with a minimum-wage job out of poverty.47 (There is also a three-child category, enacted on a temporary basis in President Obama’s Recovery Act.) With one child, the maximum is $3,094. Single individuals qualify for the EITC as well, but with a maximum payment of only $464.48
The EITC was enacted in 1975 and has been substantially expanded over the years, especially in 1993 on the initiative of President Clinton, but also including major expansions in 1986 and 1990—all with bipartisan support. It is a powerful tool, lifting more than 4 million people out of poverty. Its cost is now well over $40 billion, and it has a very high participation rate—well over 80 percent of those eligible.49
The EITC is not perfect. It contains a marriage penalty that is still a challenge to policy makers. For example, if two single parents, each with one child and receiving the EITC, marry each other, their EITC payment will decrease. Combining two households that have two children each could cut the total EITC in half.
Another important issue relates to single individuals, or at least to noncustodial parents.50 The current supplement to the income of single individuals is a maximum of $464, as I noted earlier. Raising that figure would reduce somewhat the poverty of unmarried low-income workers, of whom there are millions, and also would help low-income noncustodial parents fulfill child support obligations that they cannot meet at present.
One reason the EITC has been a political success is because employers like it. It frees them from paying more out of their own pockets in wages. To put it bluntly, that’s not so great. It probably makes it more difficult to pass increases in minimum wages. The minimum wage and the EITC have to remain in continuous tension with each other. We require an EITC because wages are so low, but, to minimize the free ride the EITC is giving to some employers, we need to keep improving the minimum wage. Employer support for the EITC has not stopped some right-wing politicians from attacking it for letting too many people escape from having to pay federal income taxes, but the simple truth is that if workers had more income, they would pay federal income taxes.
Twenty-two states have EITCs as well. So do the District of Columbia (to me, a state); New York City; and Montgomery County, Maryland. They range from Louisiana’s modest provision of a refundable state tax credit at 3.5 percent of the federal EITC up to a 35 percent refundable credit in the District of Columbia, although most are being cut badly in the recession-driven fiscal crisis. This is fertile ground for more work once state coffers recover from the current crises.
Another effective income supplement is the Child Tax Credit (CTC). This is a $1,000-per-child tax credit (subtraction from taxes) for people who pay taxes, but it is also refundable for those with low incomes. Currently, a family needs $3,000 of income before it receives a payment. For each dollar a household with children earns over $3,000, it receives a 15-cent CTC payment.51 So, for example, a mother of two children with an income of $13,000 receives a payment of $1,500, 15 percent of $10,000. This amount is over and above what she receives under the EITC. The Center on Budget and Policy Priorities estimates that the refundable portion of the credit reaches 13 million people and keeps 2.3 million out of poverty at an annual cost of about $5 billion. But the $3,000 threshold is a temporary antirecessionary measure. If it is not renewed by the end of 2012, the income threshold for eligibility will revert to a prerecession level of about $13,000, and the impact will shrink by about 90 percent.
The three-child EITC category and the $3,000 threshold for the CTC, added as temporary provisions in the Recovery Act, were originally slated to expire at the end of 2011. In the great tax “compromise” at the end of 2010 that kept the Bush tax cuts for rich people in effect, one of the fig leaves was to extend the EITC and CTC provisions for another year.
Although these income supplements are doing a reasonable job in raising many low-wage workers out of poverty, we would need to do much more to reach everyone whose income leaves them short of having enough to live on.
The UK during the Blair-Brown period accomplished much more than we did in the United States in using tax policy to increase incentives to work. The UK Working Tax Credit was similar to our EITC, but there was a child care component that was worth almost $15,000 for families with one child and $25,400 for families with two or more children.52
Let us turn to category number two, where reside the things that a caring nation sees as its social responsibility to provide, either universally and free or on a means-tested basis. In this category I include health care, child care, housing, and education from pre-kindergarten through college. The glass that holds category number two has filled substantially thanks to Obama. Sixteen million or more people will be added to Medicaid under his health care legislation.53 A somewhat strange gap in Medicaid over its nearly half-century of operation is that it omitted most low-income adults from coverage (except for the elderly and the disabled). Only the parents in welfare families were covered and these were mainly women; even these women constituted only a small fraction of the population of low-income women. All poor children are already covered under Medicaid, and the combination of Medicare and Medicaid takes care of the elderly and the disabled, but other adults were mainly out of luck. What Obama has accomplished is truly historic.
Medicaid coverage for people with incomes below 133 percent of the poverty line will effectively supplement wages for workers (and add income for others), as will subsidized coverage for somewhat higher-wage workers who purchase health insurance through the exchanges that will be set up under the law.
Another income equivalent that needs to be strengthened is child care. During World War II, the government subsidized child care to enable women to work in the war plants. Called the Lanham Act, its funding disappeared after the war when women were no longer urgently needed (or, some would say, wanted) for work outside the home.
Federal funding specifically for child care did not reappear until 1988, culminating a twenty-year debate that was highly politicized and acrimonious. President Nixon vetoed comprehensive child care legislation passed by the Democratic Congress in 1971, calling it “a communal approach to child rearing over against the family-centered approach.” 54 Nixon had just returned from his historic trip to China and wanted to do something to assuage right-wing critics of his journey. For nearly two decades thereafter, extreme conservatives blocked significant federal funding for child care. The logjam was broken during the presidencies of Ronald Reagan and George H.W. Bush, who, in contrast to Nixon, signed bills focused specifically on child care enacted by Democratic Congresses.
The federal role was expanded somewhat in conjunction with the 1996 welfare law. The idea was that if mothers of small children were going to be pushed into the job market, child care should be available. Perhaps not surprisingly, the level of funding has not been consonant with the rhetoric, especially since there is no legal right to assistance. Over the past fifteen years, federal funding for child care has been essentially level, meeting the needs of approximately one in seven mothers who are income-eligible for assistance.55 Child care assistance for all who need it in order to work outside the home is critical if mothers are going to succeed in the workplace. And, again, it is an item that has monetary value—one that effectively adds to the low-wage worker’s income.
The third vital income equivalent is housing. Housing is a major component in the cost of living for low-income people, and it has become more and more expensive in recent years. The generally accepted rule of thumb is that housing should constitute no more than 30 percent of a family’s budget. By this standard, more than half of all renters lived in unaffordable housing in 2009, and 7.1 million households either paid more than 50 percent of their income in rent or lived in severely substandard rental housing, a 20 percent increase just from 2007 (probably due more to falling incomes than rising rents).56 According to federal guidelines, there is not one state in which a family with one minimum-wage job can afford to rent a two-bedroom home or apartment at the federally defined “fair market rent” for that state.57
The two major federal policies in this area are public housing and housing vouchers. Federally financed public housing, which goes back to the New Deal, has an inventory of about 1.2 million units. Housing vouchers, enacted in the Nixon era, serve more than 2 million families. Together, the two programs reach about one in four people out of the population whose incomes would qualify them for participation if sufficient funding existed. For those low-income people who are fortunate enough to have it, help with housing is a major supplement to income.
The fourth major income equivalent we have is help with postsecondary education, mainly Pell Grants. Named for Senator Claiborne Pell of Rhode Island, the grants are another Nixon-era creation. They are now ample enough to pay community-college tuition in most states, although students still need to find other ways to pay for the other costs of daily life, which can be a tall order, and the limited grant size precludes many from attending a four-year college. Another problem now is that there are not enough community-college seats, and for-profit colleges have entered the arena. These profit-making entities pose a serious problem. Too many have troublingly low graduation rates, and some offer programs that are so grossly inadequate as to border on fraud. Some are outright scams. A mountain of evidence tells us that they need to be regulated much more closely, the claims of their well-paid lobbyists to the contrary notwithstanding.
I said it earlier, but it bears repeating that because of all these programs we have many fewer poor people, and millions of low-wage workers are better off. If housing and child care reached everyone who needs help, even more low-wage workers would be closer to a living income. It would be wonderful if all workers were paid enough so that we didn’t need to subsidize things like child care and housing. Unfortunately, that’s not the America we live in.
Increasing the income of low-wage workers, by whatever means, would be good economic policy, too. As President Franklin Roosevelt once succinctly remarked, “Cheap wages mean low buying power.”
This is the 64-gazillion-dollar question, but history does provide hope. The rich have always had too much power in our country, but the extent of that power has waxed and waned. Sometimes the people have pushed back and won. The voracity of the railroads, the oil companies, and other industries in the late nineteenth century created a populist rebellion, which in turn resulted in the Interstate Commerce Act and the Sherman Antitrust Act. What followed was the Progressive Era, during which a coalition of immigrant workers, muckraking journalists, urban reformers, and followers of the social gospel produced both a sharper backlash against corporate power and a new spate of socially oriented legislation. And of course the Depression gave us the New Deal and the broad support for the historic laws enacted through the leadership of FDR.
We have been moving to the right for a long time. The path from Nixon to Reagan to Gingrich to George W. Bush (and particularly Dick Cheney) and, more recently, on to the Tea Party is truly frightening. Each Republican ascendancy in our political cycles has been farther to the right than the one before. Civil rights sent much of the South into Republican hands. Vietnam and Watergate tore a hole in our national confidence in government. Roe v. Wade energized the socially conservative right. Free-flowing campaign contributions powered the machine of the corporate right. And Democrats are seen by a wide slice of the electorate as not having held up their side of the bargain. Large numbers of the currently disaffected see both parties as having done little over the years to alleviate the ever-increasing economic squeeze on the lower half (or maybe the lower 55 or 60 percent—pick your number). So, if government doesn’t help regular people, why strengthen government? Why have a government at all? Might as well vote for the party that wants to shrink the government to the point where it can be drowned in a bathtub.
And now? What is happening now makes Nixon and even Reagan look (to some) like moderates. Bad times evoke anger—more easily if that ire has been simmering for a long time. In our deeply divided country the Tea Party has power far beyond its actual numbers. The weak economy plays into the long-accumulating loss of popular confidence in government solutions. Obama is seen by many as having helped Wall Street more than Main Street (a sentiment shared by people on the left as well as on the right, but with different conclusions as to what should be done). Many of those who do want to tax the rich want to send the proceeds to reduce the accumulated national debt rather than help people in need, even the victims of the recession. (And I have to say, many people still do not accept the idea of an African American president.)
I am far from the first to suggest that there is a cynical alliance between the rich and powerful and the socially conservative and economically angry voters who are among those injured by the behavior of the rich and powerful. But there is just such an alliance, implicit though it may be, and it is all too successful. The non-rich portion of the alliance participates because of their disillusionment with or downright hatred of government (and, in better times, because of their social conservatism). But someone might ask why the rich and powerful would oppose measures to help lower-income people—what difference does it make to them? The answer is that more than anything they want low taxes (and no regulation), and it is harder to maintain low taxes if government is going to spend money to help people who do need it (and take care of things such as health care that help many people who are not poor). No doubt some understand that money in ordinary people’s pockets creates demand for corporate products over the longer term, but corporate horizons are nothing if not short-term. Selfishness trumps selflessness.
Politically, the few remaining Republicans with moderate records are terrified of primary opponents from the Tea Party, and they act accordingly. Senators with long records of bipartisan cooperation on many key issues now vote most of the time as though they never saw a constructive proposal from the Democratic side. The politics of the moment exacerbates the substantive impasse.
Current politics will not change until a sufficient bloc of voters gets sufficiently disgusted to take action. Obama, running for reelection, needs to make the challenge to the powerful the centerpiece of his campaign. He began to do that with speeches at the end of 2011 as I wrote these words, and such leadership in pressing the issue, if it continues, will pull it toward the front burner.
But people must not be passive. It has been astonishing to me that so many people who have been hurt badly by the recession and Washington’s failure to build on the stimulus package of 2009 have been so silent. The only noise has come from the right, which in its anger and frustration has come to include many people who have decided, often against their own economic interest, that government is useless (except for defense and law enforcement). The president will be more likely to continue his emphasis on the obligation of the rich to pay more if more people vocalize their support for his doing so and press him to do so if he falters.
As of the end of 2011, many of us are watching with sympathetic interest the course of the Occupy Wall Street movement around the country and wondering what seeds it will sow. As I write, the encampment phase seems to be winding down, but the idea of “We are the 99%” has begun to sprout more widely. Occupy Wall Street has definitely vaulted issues of inequality to a higher position in public consciousness, and there is a sharp increase in the media coverage of inequality. The big question is whether the Occupy effort will inspire and create space for a broader coalition that will gather political momentum. That is the real hope.
But beyond the as-yet-unanswered questions, it is also not clear whether the aims of “the 99%” actually include the whole 99 percent. Getting the rich and business to pay more in taxes than their secretaries is critical, but it isn’t necessarily the beginning of a better politics about poverty or even the 103 million people with incomes below twice the poverty line. If we are going to make headway, leadership from the top and action from the bottom must coalesce. Can it be done? At the very least, there is one fact that points toward an affirmative answer: the self-aggrandizement of the super-rich is in its own way as dangerous to our democracy as the atrocities of the robber barons of more than a century ago.