With the economy the number one issue on the campaign trail, major party candidates John McCain and Barack Obama discuss their tax plans, jobs and the financial bailout on the stump. But are they really addressing the needs of the working class? A new study from the Center for the Study of Working Class Life suggests that neither McCain nor Obama have adequately spoken to the needs of one-fifth of the population — the 60 million Americans who are barely surviving in this economy. [includes rush transcript]
This is a rush transcript. Copy may not be in its final form.
JUAN GONZALEZ: Election Day is eight days away, and the country remains in the midst of a deep economic crisis that many have compared to the Great Depression. The economy is the number one issue on the campaign trail, and the major party candidates, John McCain and Barack Obama, discuss their tax plans, jobs and the financial bailout on the stump.
But no one is really talking about the working class in this country and the impact of the financial meltdown on their lives. A new study from the Center for the Study of Working Class Life suggests that neither McCain nor Obama have adequately spoken to the needs of one-fifth of the population — the 60 million Americans who are barely surviving in this economy.
AMY GOODMAN: Michael Zweig is one of the authors of this study called “Economic Stimulus and Economically Distressed Workers.” He’s a professor of economics and director of the Center for Study of Working Class Life at the State University of New York, Stony Brook. His most recent book, What’s Class Got to Do with It?: American Society in the Twenty-First Century. He joins us in our firehouse studio.
We’re also joined here in New York by labor and workplace reporter for the New York Times, Steven Greenhouse. His latest book, The Big Squeeze: Tough Times for the American Worker.
And labor journalist Steve Early is still with us in Boston.
Michael Zweig, lay it out. Who are economically distressed workers in this country, and what is the picture of working class in this country?
MICHAEL ZWEIG: Well, the working class is having a hard time in this country. And when we talk about economically distressed workers or people, we’re talking about people whose incomes are so low that they can’t get above the — they can’t get above the bottom of their housing market for their —-
AMY GOODMAN: What was called the working poor?
MICHAEL ZWEIG: Well, we started out calling them the working poor, and we found that really it wasn’t the best term, because we want to work in a way that engages people in the process, and when -— nobody wants to be poor. Nobody wants to be called poor or low-wage. So when we started out talking about the working poor or low-wage workers, we came, in the course of conversations with these workers, to understand that maybe it would be better to find another way to talk about it. So that’s why we came up with this formulation “economically distressed,” which really talks about the content of their lives, rather than something which might get turned into an epithet.
So, these economically distressed workers are people whose incomes are so low that they can’t get out of the bottom of their own housing market in their area for a family of their size without spending more than 30 percent of their income to do that. And the federal standard is 30 percent. You shouldn’t spend more than 30 percent of your income on housing. Otherwise you won’t have enough money for everything else that you need. So that’s how we look at the problem.
And we found that in the United States, it’s almost 21 percent of the labor force are people who are in this economically distressed status, and it varies. In metropolitan areas, it’s higher. Here in New York — I just have the numbers just here — it’s in New York metropolitan area, 29.4 percent of the families and households in the New York metro area are economically distressed. And it goes as high as — in Miami, it’s 32.4 percent. So, in Los Angeles, it’s 31 percent. So we’re talking about really a lot of people who are in a very, very serious situation.
JUAN GONZALEZ: Well, Steve Greenhouse, on the campaign trail, John McCain talks about Joe the plumber, Barack Obama talks about the middle class and tax cuts and policies that address the middle class. Why aren’t either one of them talking about this sector?
STEVEN GREENHOUSE: First, the phrase "working class" is kind of forbidden from political talk in the United States, because it’s — people are going to be accused of being class warriors. So, unfortunately, that phrase is rarely used. But I think, you know, the catch phrase is the middle class, and they’re both focusing on the middle class. But we have this ever-expansive definition of what the middle class is: people from $20,000 a year to $200,000 a year.
But I think, you know, the silver lining in the current crisis is that, you know, finally, after years of ignoring what’s happening to the nation’s workers, the candidates are starting to talk to some of these issues: foreclosures, high debt levels, the large number of uninsured. I think Obama, you know, has come up with some plans where he’s really trying to address the freeze on foreclosures to pump billions of dollars into investment and infrastructure into green industries. And McCain, in his own way, is also trying to do it, you know, mainly in the traditional Republican way of tax cuts, tax cuts. And he’s hoping that there’ll be a trickle down from investors and entrepreneurs down to help workers.
AMY GOODMAN: Talk about how the candidates are talking about the working class. I mean, of course, the buzzword of Obama is “the middle class" everywhere he goes. It’s a little hard for McCain even to say “the middle class.” I mean, in the debates, I think in one of the first ones, he never said it once. But “working class” is out.
STEVEN GREENHOUSE: Yes, you’re right, Amy. “Working class” is out. But they do try to talk to the problems that average Americans are having, that people maybe earning less than $50,000 a year are having, or the people who face foreclosures, the people who have been thrown out of work, the people who are, you know, up to their eyes in debt. But they don’t use the phrase “working class.” But, you know, I think both of them know, when they campaign in Ohio, Wisconsin, West Virginia, North Carolina, Virginia, Pennsylvania, that a lot of people are hurting, and they’re trying to address those issues, and they say, you know, we want to do something.
And Obama, I think in the past few weeks, has really learned from lessons from Hillary Clinton, that he wants to show that he’s battling for them. I think for a long time, Congress, the President — you know, and this is a big point I make in the book is, you know, for years, Washington was ignoring the squeeze on the nation’s workers. Now, a silver lining in the current crisis is that, wow, people are saying the nation’s workers are hurting very, very badly. Wages have been stagnant. Healthcare is — health insurance is getting worse. 401Ks are going down the drain. Americans are working more hours than any — than people in any other industrialized nation. So I think, you know, Obama, with his tax plan, wants to reduce some of the inequality by increasing taxes on those making more than $250,000 a year to help those down below. And he has some child tax credits, and education credits, I think, are designed specifically to help those on the bottom most.
AMY GOODMAN: Michael Zweig?
MICHAEL ZWEIG: You know, there was some talk about the working class, particularly in the primaries, when the real question there was “Can Barack Obama score with the working class?” by which people meant white people. So, you know, there was a kind of conflation there of race and class, and the idea that Hillary Clinton had a lock on the working class, forgetting that all these black workers who were voting for Obama are also in the working class. So I think that there was some opening there to talk about the working class.
And there is a discussion, of course, of class war; every time anybody talks about redistributing income down, “Oh, that’s class warfare.” Well, yes, it is class warfare to redistribute the income up. We’ve been living for thirty-five years in a period of intense class warfare, except the working class has been losing. And part of that class warfare is to deny that there are classes and to deny that any of this dynamic is actually happening, so that people’s attention are shifted elsewhere. And that’s why I think that it’s so important to keep talking about and bringing back into focus what is actually happening with working people in this country.
STEVEN GREENHOUSE: There’s this great quote from Warren Buffett —-
AMY GOODMAN: Steve Greenhouse.
STEVEN GREENHOUSE: —- where he says, you know, there’s class warfare going on, but it’s my class, the rich class, that’s winning, because if you look at increased inequality in the nation, the wealthy are just zooming upwards, while people in the bottom half, bottom quarter, have really been squeezed very badly.
JUAN GONZALEZ: I’d like to bring in Steve Zweig [sic.] again on the — I’m sorry, Steve Early, I’m sorry. Steve Early in Boston, I’d like to ask you about the response of organized labor, which obviously has been the fulcrum of the American working class now for a century — more than a century, in terms of how the organized labor is responding to the current crisis, economic crisis and attack. We just heard news, for instance, that General Motors, which originally had negotiated a deal with the UAW to take early workers out — new workers out of their pension plan and give them 401Ks, now, with the crisis GM is facing, they’re talking about reducing their contribution to that retirement fund, those 401Ks for workers. How is labor responding to this crisis?
STEVE EARLY: Well, on the political front, unions are trying to make the point that what we need now, what we need next year, if there’s a big Democratic majority in Congress and Obama is elected, is the same sort of remedy that was provided by the New Deal in 1935, through passage of the National Labor Relations Act, which labor is trying to amend now through enactment of the Employee Free Choice Act, and that is a strengthening of workers’ collective bargaining rights.
If workers were able to negotiate again on a wide scale in the private sector about pensions, about healthcare, about wages, they would have a powerful new tool to address these terrible cutbacks that are already being imposed unilaterally in hundreds of thousands of non-union work places where people are losing their retirement savings, healthcare costs are being shifted to the workers, and we’re looking at a recession where there’s going to be a wage stagnation and possibly pay cuts in the three to seven percent range that workers have experienced in past recessions.
So, this is something the candidates are not talking about. Biden and Obama did not mention the Employee Free Choice Act in any of the presidential or vice-presidential debate so far, They only talk about it in front of labor audiences. And they need to start talking about strengthening of workers’ rights as a way of reviving worker purchasing power, restoring collective bargaining to this country and enabling workers to do in 2009 and beyond what they were able to do in this country in the late 1930s after passage of the National Labor Relations Act.
JUAN GONZALEZ: And they’re also not talking about the expected high increase in unemployment, which everyone knows is going to happen over the next few months. It will be the fallout of the financial crisis. And no one seems to be talking about the looming unemployment problem in the country.
STEVE EARLY: I would agree. I think the Democrats’ initial recovery package or rescue package, which they enacted earlier this year, was sorely lacking in any real improvements in unemployment insurance. That also was an innovation of the New Deal of the 1930s. Unemployment benefits today cover only a fraction of the jobless population. And again, this is an area where we need rapid government intervention. We need an injection of new funding. We need a safety net that’s real that’s not full of holes.
AMY GOODMAN: What about General Motors and Chrysler? What does this mean for working people, especially in places like Michigan?
STEVE EARLY: I think any consolidation of corporations of that scale is going to result in further job elimination. Certainly those most at risk are the salaried and management people who have no protection against termination or freeze of their pension plans, who can be laid off in any fashion. The UAW is going to have some difficult negotiating ahead of it to deal with the fallout of that kind of consolidation.
AMY GOODMAN: What do you think of such a bailout, Steven Greenhouse?
STEVEN GREENHOUSE: The financial bailout or the GM-Chrysler bailout? The financial bailout? My sense is, you know, none of us love the idea of throwing money at bankers who have been very irresponsible, but I think we have to realize that, you know, if we did not bail out Wall Street, the stock market would melt down, and then Main Street would have started to melt down, as well. I do think that the banks that have received the bailout clearly have made known that they’re not doing enough with the money to lend it to the people who need it. So I think the federal government really has to start — really should start leaning on the banks a little more to, you know, make this money available to Main Street to help Main Street recover, the same way that the British government has done to British banks.
JUAN GONZALEZ: I’d like to ask about another looming crisis that gets very little attention so far, the employee pension funds. With this dramatic drop in the stock market, certainly especially government and municipal pension funds have taken astronomical hits in terms of what their — the value — how much money they have left to pay out pension benefits — what this is going to mean for government workers over the next few years?
STEVEN GREENHOUSE: It’s going to be very painful both for the government workers and for taxpayers, because as Wall Street has dropped, the amount of money in pension funds has dropped. So cities and states, you know, will now tell their employees, “Hey, we don’t have enough money to pay for your pensions,” so they might propose different things to reduce pensions, which will be bad for the workers. But on the other hand, you know, New Jersey and other states that are struggling with pension burdens might have to cough up billions, maybe even tens of billions, of dollars to pay, and taxpayers are not going to like that either, especially when their pocketbooks are being hit by the downturn.
AMY GOODMAN: Michael Zweig?
MICHAEL ZWEIG: Well, it’s also, I think, the case that these are losses that are very big, but they’re also, in a certain way, paper losses. These pension funds have these hundreds of billions of dollars in these funds, but they’re not cashing all that money in right now to get the money so that they can pay these pensions. So, there is — in a certain sense, it’s a little bit premature to say that this is a long-term crisis for the pension funds, because it may be that in two or three years or four years, the market will recover enough of its value that we won’t have such a major catastrophe as one might think just looking at the numbers as they are today.
I would like to come back to — again, to this question of what do we do now to really help people. We are going into a recession, it seems very clear, and there’s going to be a lot more unemployment. One of the things that we did in our study is we looked at what does it take to stimulate the economy to get it back towards full employment in a way that helps ordinary working people and these economically distressed workers. And we have a stimulus package of around $220 billion that we think will do that. When we first proposed that $220 billion at the beginning of September, we started writing it up, and people said, “That’s an impossible sum of money.” Nobody can ever imagine coming up with $220 billion. Three weeks later, they came up with $700 billion, of which they only committed $350 [billion], right?
So there’s still $350 billion left on the table in Washington that the Congress has already committed to economic recovery, whatever that might mean. And we’re saying, well, why doesn’t that mean take $220 [billion] of that remaining $350 [billion] and develop a real stimulus package that will help and send resources directly to people in the form of increased unemployment compensation; in the form of earned income tax credit extensions; in the form of support to local governments, so that they don’t have to cut Medicaid or they can restore the cuts in Medicaid; in the form of checks that would go out to people so that — you know, at the lower end of the income distribution, families making less of $50,000 a year? There’s 55 million of those families. Send them each an average check of $2,000. That’s $110 billion that would go immediately into helping the economy, and it would be the complement of bailing out the financial sector, so that when there’s credit available again, there will be a reason to — for somebody to borrow, because there will be some demand for the products.
AMY GOODMAN: How has Joe the plumber skewed this debate? On the one hand, you’d think he’d be the person talking about “What about the working class?” In fact, in his own personal circumstances, he is a part of that, though he is identifying with management. He is —-
MICHAEL ZWEIG: He’s not a plumber.
AMY GOODMAN: Right, not a licensed plumber.
STEVEN GREENHOUSE: Joe the plumber and the use of Joe the plumber has muddied the waters. I mean, McCain has portrayed him as a working-class stiff, but he says he’s about to make $250,000 a year. How many working-class people really make $250,000 a year? And then I think, you know, Obama said, “Look, I want to help you, Joe the plumber, when you’re coming up and earning just $30,000, $50,000 a year. But if you’re earning $250,000 a year, you’re doing pretty well.”
But the unfortunate thing about the whole Joe the plumber debate, Amy, is that it’s really caused both candidates not to focus so much on the real members of the working class who are making $25,000, $30,000, $35,000, $40,000 a year. All those people wish they were Joe the plumber making $250,000 a year. And McCain, I think, has, in ways, distracted Obama from focusing more on issues like, you know, how do we provide health insurance to the 46 million Americans without health insurance. And when McCain, you know, condemns the whole idea of “spread the wealth,” I think of his hero, Teddy Roosevelt, you know, who was one of the fathers of progressive -— the progressive income tax and has said it’s important, you know, when there’s prosperity, that we pass the prosperity around so everyone can benefit.
JUAN GONZALEZ: I’d like to ask you about another part of the working class, the other part of the working class that’s gotten no attention: immigrants, the undocumented immigrants in the country. It seems that there’s been almost an unwritten agreement among both candidates and the media not to ask Obama or McCain about their immigration policies since the primaries. Once the primaries were over, the debate is over, in terms of the national debate. Your sense?
MICHAEL ZWEIG: It’s really quite interesting that that’s true. I didn’t expect that. I thought that the immigration question would be really a much larger one. Of course, McCain has a fairly liberal view towards immigration in the sense that he doesn’t want to just expel everybody and lock them all up.
AMY GOODMAN: So much so that Lou Dobbs of Fox, they were calling him “Juan McCain.”
MICHAEL ZWEIG: Is that right? Well, you know, you have a situation there where maybe there’s not that big of a difference, and these candidates have decided and their campaigns have decided that that’s just too much of a third rail, and it’s too emotional, and it’s too crazy, and they’re just not going to get into it.
JUAN GONZALEZ: For both campaigns.
MICHAEL ZWEIG: Yeah. They don’t need to get into it. And each has enough in them in their backgrounds and in their programs that Lou Dobbs and that whole militant anti-immigrant crowd is going to be dissatisfied with both of them, so why get into it?
JUAN GONZALEZ: But there is the issue of, will they continue to build a wall? Will they continue to prosecute, to have the raids that they’re — the massive raids that are going on?
MICHAEL ZWEIG: Yeah, but you can’t get into those questions with them without opening the whole question of immigration. I think what they’ve done is they’ve decided they’re just not going to talk about the whole question of immigration, and then we can only be left to guess what will they actually do.
You know, I will say that in the immigration situation, whatever happens, we want to make sure that there isn’t a two-tier labor force that we have in this country, where the immigrants, in whatever form they’re here, as guest workers or in whatever guise we sort of allow them to come into America, that they are some second-class labor citizen. That, I think we really have to be very careful about.
And I will say, about the Employee Free Choice Act that Steve Early was talking about before, it’s a very, very important thing. On the other hand, I’m concerned that a Democratic administration in Congress is going to give the labor movement an Employee Free Choice Act —-
AMY GOODMAN: Which means...?
MICHAEL ZWEIG: Which means that the principal legislative agenda item for the labor movement, to make it easier to organize unions, will be enacted, probably quite early. And then, the labor movement is going to be told, “You go organize your workers, and don’t bother us anymore with any other questions, because now we have serious business to attend to and all the rest of the agenda of the government.” And labor is going to be cut out in issues of the war in Iraq or in Afghanistan, in issues of the reconstruction of the banking regulations, in issues of housing and all the other items that are so very important to working people in this country. The labor movement is going to get its piece in the Employee Free Choice Act, and in much the same way that the Clinton administration gave labor the employee Family Leave Act -— unpaid, but still a Family Leave Act in 1993. It was a very important thing. But that was pretty much the end of labor’s agenda in the Clinton years. And the rest of it was devoted to deregulating the financial industry and ending welfare as we know it. And so, I’m a little concerned that we are going to be in a situation where we put so much weight on the Employee Free Choice Act that we are going to be left aside in the other deliberations.
STEVEN GREENHOUSE: I see something —-
AMY GOODMAN: Steve Greenhouse?
STEVEN GREENHOUSE: —- things somewhat differently from Mike. I think the unions are playing their hand pretty well this election. They are going all out to help Obama, and clearly, you know, if Obama is elected, they’re going to expect him to implement some of the things they’re pushing for. And they’re pushing for three things at once. One is this Employee Free Choice Act, which would make it easier for workers to unionize. Second, they’re pushing very, very, very hard for economic stimulus, which dovetails with what a lot of liberal Democrats want anyway. And third, they’re pushing very, very hard for universal health coverage, and that’s something Obama has promised. So I think they’ll feel very, very angry if Obama says, “We gave you Employee Free Choice Act, and we’re going to ignore you on other things.” The other things they’re pushing for are the very things that many, many Democrats are pushing for.
AMY GOODMAN: Last word. You have thirty seconds, Steve Early.
STEVE EARLY: I think it’s overly optimistic to assume that the Employee Free Choice Act, expanding the right to organize in this country, is going to sail through the new Congress. You look back at the history of labor law reform efforts over the last thirty years, under Clinton and Carter, a lot of disappointment and a record of failure. It’s going to take a tremendous grassroots movement, now and then, by organized workers to keep the pressure on Obama and the Democrats to make this long overdue change so that workers can organize more freely without management interference. It’s not a done deal. And I think Obama would prefer to avoid a knockdown, drag-out fight with corporate America over this issue right out of the box.
AMY GOODMAN: Steve Early, I want to thank you for being with us. Steve Early, Boston-based labor journalist. Steven Greenhouse with the New York Times, his book, The Big Squeeze. And Michael Zweig, joining us from State University of New York, Stony Brook, he is the head of the Center for the Study of Working Class Life at SUNY, Stony Brook, his book, What’s Class Got to Do with It?