News You Can Use
When I was a young reporter for a daily newspaper in Chicago, I soon learned that the Saturday edition could be used to “hide” articles that might risk attracting negative attention—even downright anger—from the top editors. They’d be too busy working on the Sunday edition—with its higher page count and circulation—to notice. So, if you wanted to pitch a dissident story and avoid editorial interference or offending the paper’s friends, the time to do so was toward the end of the day on a Friday afternoon.
That’s how I stumbled upon a buried treasure in the New York Times. It was published on May 15, a Saturday of course, and it talked about the long-term wage stagnation among the least educated people, those left out of the wealth boom of the techno-financial class that now dominates American society. At the bottom of the front page of the Business section was the headline, in the form of a question, “Is Washington at Fault for the Wage Gap?” The dominant thesis, often promoted by the Times, claims that the automation of labor has caused an inevitable, widening chasm between workers from the small top bracket of society and those from the large bottom bracket. But now, the Times was asking whether the authors of a new economic study were right to suggest that this gap actually was due to “intentional policy decisions.”
The study was conducted by the Economic Policy Institute (EPI), a think tank affiliated with the politically moderate left, and it is well worth a read. In fact, the authors of the study, Lawrence Mishel and Josh Bivens, are more candid than the Times’ explanation of the study gives them credit for. “We refer in this analysis to wage suppression rather than wage stagnation because it was an actively sought outcome—engineered by policymakers who invited and enabled capital owners and business managers to assault the leverage and bargaining power of typical workers, with the inevitable result that those at the top claim a larger share of income.” The researchers state that between 1979 and 2017, pay for median workers lagged behind national productivity growth by 43 percent. In the 38 years analyzed in the study, the bottom 90 percent of workers suffered an anemic rise in salaries to the benefit of the top 10 percent, “mostly highly credentialed professionals and corporate managers.”
How did these clever policymakers in Congress—supported by hundreds of academic economists—achieve their ambitions? In many different ways: excessive austerity measures meant to increase unemployment and control inflation; the globalization of big business and of the work force, aimed at pitting American workers against cheap foreign labor; a brutal war on unions; the effective lowering of a minimum wage already eroded by inflation and weakening regulations, including on overtime; more numerous and more restrictive contracts; the deregulation of industry, the rise in mergers, and the outsourcing of production that led to an extraordinary concentration of power in purchasing and employment negotiations.
At times, the EPI’s analysis seems somewhat superficial—for example, when it references the effects of free trade on the labor market. However, it does take into account trade agreements such as NAFTA, which harm not just workers in the Rust Belt but also workers in occupations that aren’t directly affected by outsourcing: “While landscapers may not be displaced by imports, their wages suffer from having to compete with apparel (and auto, and steel) workers who have been displaced by imports.” Add to that number the eight million undocumented immigrants—the vast majority of whom work for lower wages than what is guaranteed by the law in all fifty states—and it’s easy to understand just how much workers suffer from an increasingly globalized market.
What is missing from this remarkable study is the “why.” As career economists, Mishel and Bivens rather naively explain how neoliberalism reached “great prominence, even in the Democratic Party,” as if they were unaware of the cynical transformation of the party into a corporate- friendly entity as far back as the 1970s. The “why” is that the neoliberal project promoted by the so-called New Democrats, and led by Bill Clinton, was conceived to fish in Republican waters and thus gather as much money as possible from Wall Street and big business in order to finance their electoral campaigns. The moral support they received from a neoliberal consensus in universities and in the mainstream media did not go unnoticed by the leadership of what had traditionally been known as the “party of labor.”
It’s clear that politicians from both the Republican and the Democratic sides have waged a four-decades-long war on the working and middle classes. What’s not so clear is why the Times, the quasi-official paper of the Democratic Party, would even report on this study. Why bother to mention it in a little-read Saturday edition after the war has more or less been won? Did the editors run it then on purpose? Or was it the work of a cunning journalist just taking advantage of a distracted boss one fine Friday evening?
