co-author with Fernando Gapasin of the new book Solidarity Divided: The Crisis in Organized Labor and a New Path toward Social Justice. He is the executive editor of BlackCommentator.com and the former president of TransAfrica Forum.
While the press has extensively covered the Wall Street meltdown, little attention has been paid to what this means to the American worker. We speak to longtime labor activist and writer Bill Fletcher, co-author with Fernando Gapasin of the new book Solidarity Divided: The Crisis in Organized Labor and a New Path toward Social Justice. Fletcher is the executive editor of BlackCommentator.com and the former president of TransAfrica Forum. [includes rush transcript]
JUAN GONZALEZ: The Wall Street Journal has called it the worst financial crisis since the 1930s. The Washington Post described Wednesday as one of the most tumultuous days ever for financial markets. A recent Financial Times headline read “Goodbye capitalism American-style.” The events on Wall Street in recent weeks have shocked the financial world. The federal government has used taxpayer money to bail out the mortgage giants Fannie Mae and Freddie Mac as well as the American Insurance Group.
Meanwhile, Lehman Brothers has declared bankruptcy, Merrill Lynch has been bought out by Bank of America, and Morgan Stanley is in talks to sell almost half of the company to a state-run Chinese investment fund. And now the Fed and Congress are working on an unprecedented bailout plan that would result in the most direct commitment of taxpayer funds so far in the financial crisis.
AMY GOODMAN: While the press has extensively covered the Wall Street meltdown, little attention has been paid to what this means for the American worker. On Thursday, the Federal Reserve announced American households had lost $3 trillion over the past nine months. The nation’s unemployment rate has reached 6.1 percent, a five-year high. The unemployment rate for African Americans is now in double digits, at 10.6 percent.
Wages remain stagnant, and retirement funds are taking a major hit as stock values plummet. Since President Bush took office, the S&P 500 has fallen 14 percent.
We’re joined now from Washington, D.C. by longtime labor activist and writer Bill Fletcher. He is co-author of the new book Solidarity Divided: The Crisis in Organized Labor and a New Path toward Social Justice. He’s executive editor of blackcommentator.com and former president of TransAfrica Forum.
Welcome to Democracy Now!, Bill Fletcher.
BILL FLETCHER: Amy, Juan, thank you for having me on the program.
AMY GOODMAN: It’s great to have you with us. Why don’t you start out by simply talking about that issue? How has this global meltdown affected the American worker?
BILL FLETCHER: Well, among other things, Amy, what it means is that the whole illusion that we have something called a free market economy is gone. I mean, here we have for years been subject to this propaganda blitz regarding deregulation and that regulations have hurt the economy. And now what we’re seeing is an implosion, an implosion that government is prepared to respond to by assisting corporations, but there has been — this situation has been disastrous for workers, and not just in the most recent past — workers and farmers, actually, if you go back to the 1980s.
JUAN GONZALEZ: Bill, one of the areas that hasn’t gotten very much attention is that — are union pension funds, as well, because many pension funds over — in recent years began investing not in conservative bonds or government securities, but increasingly got into equities and even into venture capital and private equity funds. What’s been the impact, is your sense, as what’s going to happen to the retirement funds of so many of not only the pension funds, but increasing number of Americans who were convinced to get into, by their employers, 401(k) retirement funds, which were basically invested in the stock market?
BILL FLETCHER: I’m glad you ask that. Let’s just divide it into two pieces. One is that back in the 1980s, we started to see the end of or the decline of pensions, actually defined benefit pensions, where workers would retire and actually could count on a steady income. We started to see this replaced with the rise of the 401(k)s, which you mentioned, and this whole illusion that if you invest in the market, you get a piece of the rock and that you’ll be better off than having these defined contribution or defined benefit plans.
So, the first problem is that workers — fewer and fewer workers actually have pensions of any sort. In the most recent past, it’s exactly as you describe. I mean, workers are looking at their futures dissolving in front of them. It’s as if it’s a piece of film that’s melting before their eyes, as these overly ambitious objectives were stated in terms of pension investments.
So, what workers are now wondering is, as they watch their 401(k)s decline, as they watch their pensions disappear, what kind of future do they have? And can they actually retire? And I don’t mean that as a rhetorical point, Juan. It is like, will workers be able to retire, or, actually, are we talking about working until you drop?
AMY GOODMAN: And what this means, you’ve got the defined pension plans, as Juan asked, and the 401(k)s right now —-
BILL FLETCHER: That’s right.
AMY GOODMAN: —- and the path you think that people should be going?
BILL FLETCHER: Well, the path is several-fold. I think that part of what we have to do is we have to break with this ideology around deregulation. And I think that reality is now forcing that to happen.
But I think that the more fundamental issue, Amy, is that we need the union movement and other workers’ organizations to really mount a counterattack. This issue — many unions, for years, accepted — very reluctantly, but accepted — the notion that all we could get were 401(k)s. Part of what we’re really arguing about is a change in the priorities of this country. Workers have a right to a decent retirement. They have a right to live out the rest of their lives without looking over their shoulders wondering whether or not their entire life is going to collapse.
But it’s not just for those workers. What’s happened increasingly is that those who are working, who are not retiring, have to take care — what do they call it? The sandwich generation? — have to take care of their parents, but also their children and, in some cases, their grandchildren. So, what’s happening is that workers are getting squeezed, and they’re looking around for answers, and they’re looking around for a champion. And the union movement needs to be that champion.
JUAN GONZALEZ: Bill, I’d like to ask you, on another note, a few years ago the financial industry lobbied fiercely in Congress and got the support of both Democrats and Republicans to rewrite bankruptcy laws to make it difficult for individuals who were in debt to be able to file for bankruptcy. And now you have this situation where the very financial companies that tried to prevent individual Americans from being — having some kind of an opportunity to bail themselves out from their financial — individual financial troubles are now rushing to the government to assist them in their financial troubles.
BILL FLETCHER: More of the same. I mean, just as you said. But let’s go back even a little further. Think about the Silverado Savings and Loan debacle at the end of the ’80s. You know, any time capital, big business, finds itself threatened, all of this whole thing about a free market just goes right out the window. And it’s at that point that they’re looking for government bailouts, for the government to step in and save them. And that happened in Silverado Savings and Loan.
But for working people, for farmers in the 1980s in the Midwest, for working people more generally, when they are being squeezed, the political operatives that represent the interests of big business step in and say, “No, no, no, no. You are not entitled to a bailout. You are not entitled to welfare. You are basically out of luck.” And just as you described, during a period when we were perhaps a little bit more stable economically, the Republicans were able to move that legislation in, that in fact restricted the ability of regular people to declare bankruptcy.
Now, why do regular people declare bankruptcy? Not because of bizarre investments. Largely because of healthcare costs, because they can’t — they have been driven to bankruptcy because they can no longer afford their healthcare payments, because they’ve lost a job or because their insurance has run out. That’s why regular people have declared bankruptcy. The Republicans put a block on that in order to make that more restrictive.
But now we have — what? — Wall Street, where we’re suffering as a result of the irresponsible, absolutely irresponsible, investments in game planning — playing by these individuals. And what happens? Government is forced to bail them out. Otherwise, we are in complete meltdown.
AMY GOODMAN: On the issue of the bankruptcy law, one of the chief engines of passing that pro-corporate bankruptcy law was, well, the Democratic vice-presidential candidate, Joe Biden of Delaware.
BILL FLETCHER: I knew you were going to raise that, Amy. No, you’re absolutely right. I mean, this is — for those of us that do support the Obama campaign and candidacy, although critically, one of the things that we’re concerned about is that this is not a retread of the Clinton years, and it’s not a retread of those economists like Rubin, who basically promoted their free market mania, although with a velvet cover. That is absolutely a concern. And I think that it’s critically important that we’re pushing Senator Obama to recognize that this is not simply going back to the Clinton years.
This was one of my concerns during the Democratic convention, when there were all of these references were to the great Clinton years. Well, you know, let’s be a little bit careful about what was happening during that time, and particularly the — what? — the elimination of welfare, the bankruptcy legislation, as you just mentioned. I mean, we’re not talking about going back. We cannot be talking about that. We have to talk about a new set of economic policies that really breaks with what we saw under Reagan, the first Bush, Clinton and now the last Bush.
AMY GOODMAN: We’re going to break, then we’re going to come back. Bill Fletcher is our guest. He is co-author of the new book Solidarity Divided: The Crisis in Organized Labor and a New Path toward Social Justice. After we finish our conversation with Bill, we’ll be joined by Barton Gellman, the 2008 Pulitzer Prize-winning journalist who has written Angler: The Cheney Vice Presidency. Stay with us.
AMY GOODMAN: We’re talking about the global meltdown and how it affects the American worker. Our guest is Bill Fletcher, longtime labor activist, editor of blackcommentator.com and author of the new book Solidarity Divided: The Crisis in Organized Labor and a New Path toward Social Justice.
Just continuing on this point of the meltdown, I’m wondering, Bill, your response to what Senator Schumer is encouraging Congress to do, the New York senator offering a financial lifeline to those banks that are willing to renegotiate mortgages for those on the brink of losing their homes, saying if the government is going to bail them out, they have to help bail out American homeowners.
BILL FLETCHER: Absolutely. I mean, with any of these bailout packages, there need to be concessions that are made toward — in the interests of regular working people. I think that Senator Schumer is absolutely right. And it’s interesting that the banking industry, despite what’s going on, despite this meltdown, continues to resist such suggestions, considering them irresponsible. But he’s absolutely right.
And it’s interesting, I was just reading that they are prepared to make concessions on individuals who are threatened with foreclosure on their second homes. I mean, give me a break! Second homes? What about regular people who are losing their first homes, their only residence? I mean, these are the individuals that need to gain the support of government in such a crisis. So I think that the senator is absolutely on point. And this is an issue that I believe that Senator Obama needs to be hammering away at.
JUAN GONZALEZ: Bill, I’d like to get back to your book, per se, Solidarity Divided. Most of it deals with the period when John Sweeney became head of the AFL-CIO and then the split within the AFL-CIO and the creation of a new labor federation, Change to Win. And I know you were a special assistant to John Sweeney for many years. Your take on what’s been happening now among the — within the dissident federation, the reformers, led by the most influential union, I guess, in the country now, SEIU, the Service Employees International Union? Now the reformers are racked by a major battle within that union over corruption and union democracy, and there are many people speculating that it’s going to have an impact on labor’s ability to mobilize for the presidential campaign. Your sense of what’s going on among the reformers of Change to Win?
BILL FLETCHER: Well, I’m actually deeply worried, Juan. The split accomplished nothing. Nothing. There were — nothing of any significance. I mean, there has been some level of growth on both sides of the split, the AFL-CIO and Change to Win. There have been plans that have been announced for organizing.
But part of the problem is that when you have a split that’s not based on principle, that’s not based on anything that’s very concrete, but that’s based on rhetoric and spin, it is almost inevitable that things will start to unravel. And I think that that’s what we’ve been witnessing very recently. In both SEIU as well as UNITE HERE, which was the merger, as you know, of the hotel workers and the textile workers, textile and garment workers, we’re seeing very serious problems of instability and challenges in terms of direction.
In SEIU, as you mentioned, what we’re witnessing is, in the West Coast there have been allegations of very serious corruption among locals that have been allied very strongly with SEIU President Andy Stern, and in the middle of this, this absurd attack on one of the largest SEIU locals by the SEIU President Andy Stern — and this is United Healthcare Workers-West — an attack that comes at absolutely the worst time, in an attempt to trustee the local, that is, to take it over by the international.
So — and it’s ironic, Juan. In the spring, there were many of us that were concerned that when United Healthcare Workers-West started raising various issues and differences with the Stern leadership, that they were going to be trusteed, and we were told, “No, no, no. You’re paranoid. This is ridiculous!” What did they do a few weeks ago? Announce that they’re going to have trusteeship hearings with the intention of taking over the local.
See, I think that the problem is that the debate that we should have had in our movement back in 2004 and 2005 did not take place. Instead, there were these exchanges about whether organizing or politics was more important, as opposed to understanding, getting at the root of why is our movement in the shape that it’s in.
JUAN GONZALEZ: And also, one of the — one of the issues that is increasingly coming to the foreground is obviously how will labor function in this presidential campaign.
AMY GOODMAN: Yes.
JUAN GONZALEZ: To what degree will it be able to mobilize voters behind the Democratic candidate, because I think most of the unions now are supporting the Democratic candidate? What do you think will be the effectiveness of the labor movement compared to prior to elections?
BILL FLETCHER: Well, let me take this in two pieces. One is, in terms of this particular problem in SEIU, if SEIU goes forward with this ridiculous idea of a trusteeship of United Healthcare Workers-West, they are going to have to dedicate many staff to dealing with this situation, because the members of that local are very, very clear: they’re not accepting a trusteeship. So what that means is that people that could otherwise be around the country working on various campaigns are going to be tied up in trying to impose this trusteeship. This is going to be absolutely horrible.
But the other problem that goes a little bit beyond this, Juan, is that within the union movement there is this question of race that is starting — a few months ago, started to be raised by some leaders, including, and very notably, AFL-CIO Secretary-Treasurer Richard Trumka, but also by other leaders who have encountered resistance among a segment of the white membership to the idea of backing Obama for the presidency. And we can see it around the country, that there is this squeamishness in some sectors about pushing the envelope in terms of supporting the Obama candidacy. Actually, more than anything else, this concerns me. The SEIU situation in California is horrible, and I think it’s absurd that there would be any thought of a trusteeship, but this issue of race, which for years union leaders have refused to talk about, beyond this idea of diversity — you taste my food, I’ll taste yours — we haven’t confronted this issue of race.
And so, now what do we have? People saying, “Well, you know, I’m not sure whether I really want to support him,” when the basic question is simple: are you better off now than you were eight years ago? And if you are not, then you had better be supporting Senator Obama. Yet, this is — there’s some squeamishness, as I noted. And so, I think this, over the next several weeks, this will be the critical question. And I’m hoping that unions on both sides of the split will be forthright in tackling this question. Let’s not play any games. The race card, the race issue, is central in this race. There’s no question about it.
AMY GOODMAN: Bill Fletcher, I want to thank you very much for joining us, co-author of the new book Solidarity Divided: The Crisis in Organized Labor and a New Path toward Social Justice, also executive editor of blackcommentator.com, former president of TransAfrica Forum.