Inequality in America: An Interview with Professor Gordon Lafer

March 16, 2018

The UE News spoke this week with Professor Gordon Lafer of the University of Oregon’s Labor Education and Research Center about rising inequality in America, shortly before he joined Senator Bernie Sanders, filmmaker Michael Moore and Senator Elizabeth Warren for a National Town Hall Meeting on Monday, March 19th. Watch the video on Facebook here.

UE News: Why should union members be concerned about the state of inequality in America?

Professor Lafer: One, out of solidarity with people for whom it is harder and harder to make ends meet. For the majority of American workers, the goal of just being economically secure has become out of reach.

Two, in most industries, the more people who are knocked down by the economy the more people there are for bosses to use to undermine other workers. I don't think there's any industry where bosses haven't figured out a way to use people who are more desperate to undermine wages and benefits.

What and who is driving increasing inequality in the U.S.?

Obviously, there are multiple causes but it turns out that one of the big drivers is the corporate lobbies, who are the richest and most powerful actors in American politics. In every dimension of the economy, their agenda not only takes money from the majority of people but also takes rights and power away from working people.

Anti-unionism is part of it, but it's also things that you don't think about until you run into it, like making it easier to classify workers as independent contractors, who have no right to organize, or to overtime pay. Or making it much harder to get unemployment insurance.

Another example is passing laws that make it easier to make workers sign non-compete agreements. Non-compete agreements used to be limited to people who had access to corporate trade secrets, but now they have spread. There was a Jimmy Johns that had waiters and waitresses sign and agreements that they wouldn't work as a waiter or waitress for any other restaurant. If you've signed one of these non-compete agreements, then while you're employed you're much more under the thumb of your employer.

What has changed about the relationship between corporations and the country over the last few decades?

One is that the Citizens United decision in 2010, which allows corporations to spend unregulated amounts of money on politics, means that growing economic inequality gets translated directly into political inequality.

Two other things are important.

The first is the degree of globalization. Increasingly the companies that are writing our laws are not dependent on U.S. workers or U.S. consumers.

The second is financialization, which is a series of legal and regulatory changes that happened over several decades, the result of which is that companies are now driven by short-term return to shareholders. In the 1960s, 60 percent of corporate earnings were plowed back into the company in the forms of wages, investment, research and development. Now it's only 10 percent and all the rest of the money is going to shareholders.

Hillary Clinton talked about "quarterly capitalism." She asked a CEO whether it wouldn't it be in their long-term interest to have somewhat higher taxes that could be used to make investments that would more broadly help the economy. He responded that it would be in the company's long-term interests, but that the CEO would be out of a job in six months because his job is to create short-term returns for shareholders.

That's not a moral question, that's a structural change in the way that corporations are organized.

That means that when we look at the companies that are writing our laws, their interests are different than the interests of the majority of the country, because they are looking abroad and short-term.

Not that there haven't always been different interests between workers and employers, but the shape of the battle is different in different times.

What do you think is the way forward for the labor movement in this moment?

The more we can campaign about issues rather than candidates or parties we'll be more powerful, because there is strong bipartisan support for making the economy more fair.

The real strength of the labor movement is in being able to have organizing conversations and develop relationships with people, and issue campaigns lend themselves to that.