The Labor Movement

Public sector pension funds: Not dead yet

A new report suggests government union benefits won't be bankrupting states, after all

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Public sector pension funds: Not dead yetBenita Johnson, recording secretary for the Transport Workers Union, shouts near the State Capitol building during protests against the proposed budget cuts from Wisconsin Governor Scott Walker, in Madison February 25, 2011. The Wisconsin state Assembly early on Friday passed a Republican plan to curb public sector union power, setting up a showdown with Senate Democrats who have fled the state to prevent a vote in that chamber. Tens of thousands of demonstrators from inside and outside the state have converged on Madison in the last two weeks to fight the proposal, which they fear could encourage similar measures in other states and cripple the U.S. labor movement. REUTERS/Darren Hauck (UNITED STATES - Tags: POLITICS CIVIL UNREST BUSINESS)(Credit: © Darren Hauck / Reuters)

Remember that awful public sector union pension crisis that was going to bankrupt every state from California to Wisconsin? A little less Armageddon in the coffee, please. Reuters is reporting some interesting details from a new report by the National Conference of Public Employee Retirement Systems.

Public pension funds are experiencing a robust recovery from the historic market downturn of 2008-2009 — reporting strong investment returns, growing assets and funding levels on track to meet obligations,” said the National Conference of Public Employee Retirement Systems.

The group, the largest trade association for public sector pensions, surveyed state and local systems representing 7.6 million people and assets exceeding $900 billion.

It found that over the last year, funds have achieved an annual investment return of 13.5 percent, nearly double the 7.7 percent rate most assume. On average, said NCPERS, pension systems are 76.1 percent funded, meaning they can cover more than three-quarters of liabilities. Typically, pensions are considered fully funded when they surpass 80 percent.

Sure, pension funds aren’t going to register 13.5 percent returns annually on an ongoing basis, and the report goes on to note that the improved performance isn’t happening in a vacuum. There has been some clear retrenchment:

NCPERS found that over the last two years most public pensions have lowered their assumed rates of return, lengthened the period of time to amortize their liabilities, increased employee contributions and raised the retirement age.

But the changed financial outlook does underscore an important point that defenders of public sector unions have been making for several years: Judging the financial prospects of a pension fund in the middle of a historic economic crash is a dumb thing to do. As the economy improves so too will fund performance.

The lesson can be extrapolated to the larger challenges facing the federal government. The best deficit-reducing strategy is a growing economy that generates increased tax revenues. A misguided pivot to austerity, on the other hand, runs the clear risk of inducing slower economic growth, lower tax revenues and higher deficits.

Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

Can unions fight Super PACs?

The AFL-CIO says labor will reshape its political operation. Not all union leaders think it goes far enough

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Can unions fight Super PACs?Richard Trumka (Credit: Reuters/Mike Segar)

No one was surprised this winter when the AFL-CIO and its major unions endorsed President Obama’s reelection. Despite decades of enrollment decline, the AFL-CIO remains the largest membership organization in progressive politics, and it is a much relied-upon ally in Democratic election campaigns. But faced with a post-Citizens United landscape and armed with hard-fought lessons, AFL-CIO President Richard Trumka is pledging a “big change” in how the federation does politics.

“Before, we used to build everybody else’s structure,” says Trumka, “and now, we’re going to build our own structure.”  He says to expect three changes: more focus on door-to-door organizing rather than TV ads; more funds toward building a permanent, independent political infrastructure and less towards candidates’ coffers; and more outreach beyond union households.

What could this look like for Obama’s reelection effort in Ohio or Elizabeth Warren’s Senate campaign in Massachusetts? Less direct campaign cash from unions and fewer union-backed TV ads on their behalf. More union volunteers, acting apart from the Democratic campaign, persuading and mobilizing people to vote for the candidates. And an organization pledged to better hold the candidates accountable if they win.

“The dilemma of Citizens United,” says AFL-CIO Political Director Michael Podhorzer, “is that [conservatives] have a huge megaphone to repeat lies. Our view is that when someone has a conversation with someone – especially with someone they know – that has much, much more power than top-down TV commercials… We have to build that to scale.” To that end, the AFL-CIO launched a new PAC called Workers’ Voice. Rather than running TV ads or donating to candidates, the PAC will fund the training of worker volunteers to talk to other workers on the job, over the phone or while at home about the coming elections. Trumka says he hopes to involve 400,000 volunteers, each of whom will both activate other workers and train them to do the same.

In the past, says Trumka, the AFL-CIO would build political infrastructures and then “tear them down” in between elections. This time, he says, labor will build a “full-time, year-round campaign structure,” which can transition from electing politicians, to holding them accountable on issues, and back again. Trumka says this will make a difference whenever “one of our friends or acquaintances gets amnesia” about workers’ rights. As an example of its commitment to independence and volunteerism, Workers’ Voice told the Huffington Post last month that workers who take volunteer shifts will earn votes on which campaigns get Workers’ Voice support.

Trumka drew attention – and some skepticism – with speeches last year (and an interview with Salon’s Joan Walsh) promising greater political independence from the Democratic Party. Podhorzer says the recent decline in direct contributions from unions to candidates backs up Trumka’s promise. Echoing his past comments, Trumka says that labor’s efforts will be focused on “friends” who’ve earned it. He lists President Obama among those friends, saying that while he “got sucked into the wrong debate for a while” – over deficits rather than jobs – his focus has since improved, and he “came in at the worst of times and has created several million jobs.” A Romney presidency, warns Trumka, would mean bankers could “run DC like a branch office.”

Thanks to Citizens United – a decision the AFL-CIO opposes — labor can take that case to a larger audience than ever before. Unions have long had the legal right to spend money to communicate about politics to their members (contrary to right-wing talking points, for decades workers have had the option not to pay for their unions’ political activism). But – except for members of Working America, an AFL-CIO affiliate for workers without unions – non-union households were long off-limits for unions’ political efforts.

Citizens United changed that. “Before,” says Trumka, “you could only knock on union doors. Now, we’ll be able to knock on every door in a working-class neighborhood. So it’ll be a big difference.”

The federation’s shift isn’t a 180-degree change. Asked whether the AFL-CIO will cease all donations to party committees, which spend money based on their own priorities, Trumka says it won’t. “Sometimes it’s symbolic,” says Trumka. “Sometimes you want to show some support.” Asked whether the AFL-CIO will devote resources to primary campaigns against conservative Democrats, Podhorzer says Republicans had taken care of that for this cycle by wiping out most of them.

Incoming South Carolina AFL-CIO President Ken Riley says the national federation’s shift is “not as significant a difference as it may sound.” He says more drastic change is needed – not this year, when all-out effort against Republicans is necessary, but after the election. Riley wants to see more political resources used to challenge anti-union Democrats and more resources shifted from politics into organizing non-union workers in states like his. Citing an estimated hundreds of millions of dollars in labor spending on this election cycle, Riley says that for a fraction of the cost, organizers in South Carolina could “paint the state blue” by organizing more workers into unions. Without more drastic change, Riley warns, “we will succumb to the same treatment we’re getting, right into the future, and our numbers will continue to dwindle, and we will be legislated out of existence.”

Trumka says such criticism is misplaced. “We do [put] a tremendous amount of money into organizing,” he says, but the AFL-CIO’s job is also “to create a climate where organizing is possible … To working people, politics isn’t just about winning elections, but it’s about a way to restore economic and political balance between the rich and the poor.”

A similar debate is playing out in the fight to lead AFSCME, the largest public sector union and the largest union in the AFL-CIO. With long-time AFSCME President Gerald McEntee retiring, delegates to next month’s convention will choose between current Secretary-Treasurer Lee Saunders and challenger Danny Donohue, who leads AFSCME’s largest affiliate. Donohue charges that AFSCME, under McEntee and Saunders, has been bankrolling national Democratic Party priorities at the expense of local struggles, trying to win over politicians with donations (what he calls “checkbook unionism”) at the expense of being a “grassroots union” that wins respect by mobilizing members.  “The last few years should have proved to us,” says Donohue, “that we can win the White House and we can lose our members in state after state.”

Reached over e-mail, Saunders said, “We have always built and maintained a formidable ground game” and that “nearly two-thirds” of the union’s political resources for the 2009 to 2012 cycle “have been devoted to state and local fights …”  Saunders charged that Donohue was “quibbling over some past tactics” and said he doesn’t believe he is “seriously proposing to dismantle or radically change one of the most aggressive and sophisticated political operations in the labor/ progressive movements.”

“It seems like every election cycle, there’s the same kind of discussion of ‘We’re doing politics differently’” says Columbia University political scientist Dorian Warren. “But I do think it’s really smart – and kind of obvious, but really smart – to focus on the ground game. Because there’s no way they can even compete with the Right and with the corporations in the ad wars, and we know that pound to pound and buck to buck, you get more with the ground game and face-to-face voter contact. So that’s heartening, and it means they’re on the right track.”

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Josh Eidelson is a freelance journalist and a contributor at The American Prospect and In These Times. After receiving his MA in Political Science, he worked as a union organizer for five years.

New video could damage Walker

Exclusive: One of the Wisconsin governor's closest allies says the GOP wanted to "go further" on union-busting

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New video could damage WalkerScott Walker and Jeff Fitzgerald (Credit: AP)

Does Scott Walker want to make Wisconsin a right-to-work state? He says no. But his allies are gunning for it.

In a new video, the speaker of the Wisconsin Assembly says his caucus wanted to pass a right-to-work bill last year. The video, shot on March 27 of this year by a Democratic Party tracker, who provided the footage to Salon, captures Speaker Jeff Fitzgerald talking at a bar with a reporter from the Milwaukee Journal-Sentinel.

The reporter asks Fitzgerald whether he was surprised when Walker described his plans to attack public workers’ collective bargaining. “No, it wasn’t a shock to me …” responds Fitzgerald. “My caucus wanted to go further. I had people in my caucus that was, you know, were wondering if we were going to do Right to Work in this state. So to tell you the truth, the collective bargaining, to me, I thought was more of a middle ground if you can believe that.”

Fitzgerald says “a number of people thought” they would push right-to-work, just as Republicans were in Indiana (where it passed this winter) and Minnesota (where it stalled). “When I heard about the collective bargaining,” he says, “it didn’t surprise me at all.” (Fitzgerald did not immediately respond to a request for comment.)

The video of Fitzgerald comes a week after Walker himself was caught on camera in January 2011, saying, “The first step is we’re going to deal with collective bargaining for all public employee unions, because you use divide and conquer.” Taken together, both men’s comments suggest the state GOP plans to step up its attacks on organized labor, though publicly Walker has insisted otherwise.

Assembly Speaker Fitzgerald, and his brother Scott, the majority leader in the Senate, are two of Walker’s closest political allies. When they helped push through Walker’s collective bargaining bill last year, critics charged that Wisconsin had become “Fitzwalkerstan.” He’s also the front-runner in a hotly contested GOP primary for U.S. Senate – perhaps the reason he’s talked up right-to-work even though Walker is trying to tamp down the topic.

Contacted over email regarding the video, Walker spokesperson Ciara Matthews responded that Walker “has made clear repeatedly that he does not have an interest in pushing Right to Work legislation.”

The Democratic Party of Wisconsin, having recorded the video, was quick to try to turn it against Walker. Calling the video “shocking,” Wisconsin Democratic Party communications director Graeme Zielinski said it offers further evidence that Walker “does not tell the public honestly what his plans are because they would reject them.” Referring to Fitzgerald, Zielinski said, “This is the guy who has carried water for Scott Walker like nobody else.”

A so-called right-to-work bill bans union contracts that require workers represented by unions to pay for the costs of that representation. By leaving unions stuck representing some workers for free, it saps them of resources to grow or defend themselves. By ending union membership as the default in union workplaces, it makes it easier for management to discriminate against union members.

Since the recall effort picked up steam, Walker has been downplaying right-to-work as an issue for Wisconsin. Walker, who co-sponsored a right-to-work bill as a freshman legislator in 1993, told the Atlantic in February that he had no plans to push the issue and that “Private sector unions had been our partner in the economic revival we’ve had in this state.” At the time, I noted that Walker was trying to walk a fine line: stoking resentment against supposedly overpaid public employees while working to shed the anti-union label. As Steve Kornacki wrote, that became even more difficult last week, after the video of Walker was released.

Watching that video, it’s not a stretch for private sector union members – who swarmed the capitol last year in defense of their public sector counterparts – to imagine Walker would like to conquer them next. The day after the video came out, Walker told reporters that right-to-work “isn’t going to get to my desk. I’m going to do everything in my power to make sure it isn’t there …” But he declined to say whether he would sign it. While today’s new video doesn’t mention Walker’s stance on right-to-work,” it offers further evidence of Walker allies salivating over it, and it undermines his efforts to render it a non-issue. Citing two attendees, Blogging Blue reported that GOP Assembly Member Chris Kapenga told constituents at a listening session last night that Republicans “have Right to Work legislation ready to go” and just “have to wait until it is politically feasible.”

If Walker survived the recall and signed a right-to-work bill after disclaiming any interest in it, he wouldn’t be the first. Fellow Republican rock star, Indiana Gov. Mitch Daniels, ended public workers’ bargaining just after being elected, claimed to have no interest in right-to-work, got reelected and then pushed and signed Indiana’s bill this year.

Could that history repeat itself in Wisconsin? That depends not just on who wins the recall races for governor and Senate, but on how much they win by and what lessons their colleagues take from the results. But today’s video reinforces what many Wisconsin voters on both sides likely suspect: The question isn’t whether Republican leaders want to bust unions, it’s just what they think they can get away with.

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Josh Eidelson is a freelance journalist and a contributor at The American Prospect and In These Times. After receiving his MA in Political Science, he worked as a union organizer for five years.

“I’m not Scott Walker”

State Republicans are terrified of pushing anti-union legislation -- and becoming targets like Wisconsin's governor

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Gov. Scott Walker (Credit: Reuters/Darren Hauck)

Labor has taken a beating. While private companies squeeze and lock out workers, resurgent right-wingers have pushed anti-union bills in statehouses around the country. But after a seemingly relentless national assault provoked dramatic pushback in Wisconsin and elsewhere, some Republicans are … relenting.

Take Minnesota. 2010’s red wave flipped both the state House and Senate, putting Republicans in unified control of the Legislature for the first time in 38 years. In January 2011, just after they took office and just before an uprising erupted in neighboring Wisconsin, Minnesota Republicans introduced Right to Work – a bill to defund unions by banning contracts that require workers represented by them to pay for representation. To get around newly elected Democratic Gov. Mark Dayton, Republicans proposed Right to Work as a constitutional amendment, requiring approval from the voters, but not the governor.

But 16 months later, the Minnesota Legislature ended its session Thursday without a vote to put Right to Work to the voters. The bill has been attached to, then detached from, other legislation. It’s been introduced, and reintroduced. But Republicans won’t give it an up-or-down vote in either house. Just after 2 a.m. on April 27, Republican Rep. Mark Buesgens made a last-ditch attempt to transfer Right to Work from the Commerce Committee, where it had stalled, to the Rules Committee. But Republican colleagues tabled his motion by a 118-to-9 vote. Republican Sen. Michelle Benson, who pushed for the bill’s passage, says it’s now a lost cause until next year’s session.

What happened? In interviews with the Associated Press last month, a spokesperson for the Minnesota Senate majority leader called right-to-work “such a divisive issue.” GOP state Rep. Tony Cornish cited the prospect of “millions of dollars coming in from other states, and thousands of people. Buses emptying out, banners, people camping.” In other words: the fear of becoming the next Wisconsin.

Minnesota AFL-CIO president Shar Knutson says that the year’s high-profile battles in other states had had “a large impact” in discouraging Minnesota Republicans.  “You’ve seen what’s happened in Wisconsin and Ohio,” says Knutson. “There’s a lot of money that goes in, a lot of volunteers, a lot of people out on the streets working hard. So yeah, I’d be nervous if I were them too.” Wisconsin Gov. Scott Walker’s attack on collective bargaining provoked a 17-day occupation of the state capitol and landed him a recall election next month; Ohio Gov. John Kasich’s assault was overturned by voters in a 61-to-39 referendum vote.

Sen. Benson says that the threat of union payback at the ballot box “was enough to divide our caucus.” She attributes her colleagues’ reticence to their “justified concern that the unions, with their massive coffers, will come after people in swing districts.” Asked about the impact of Wisconsin and Ohio, Benson says that “Minnesota is not Wisconsin,” but grants that “Nothing occurs in a vacuum.” Wisconsin and Ohio, says Benson, show that “the unions are afraid of the change that is happening in this country, and they will work vigorously against any attempt to cause them to step back from their current position.”

The ranks of now-reluctant Republicans — call them the Cold Feet Caucus — extends beyond Minnesota. In February, the House Commerce and Energy Committee in deep-red South Dakota voted to kill a bill that would have banned collective bargaining for public workers. The AP reported that Rep. Brian Liss, the bill’s main sponsor in the House, blamed his colleagues’ votes on fears for reelection. Ten days earlier, one of the bill’s Senate sponsors, Republican Stan Adelstein, announced he was withdrawing his support and would oppose the bill instead. “Further study,” Adelstein said in a statement, “has shown me that South Dakota is NOT Wisconsin, and passage of this bill into law would cause grievous harm.” Adelstein may have meant that South Dakota didn’t need the same labor relations “reform” that Wisconsin did. But his constituents could be forgiven for inferring a different message from his all-caps contrast: I’m not a Walker-style Republican.

The presumptive GOP nominee for Washington state governor is also taking pains to send a “What, Me Walker?” message. Last month, in audio obtained by Politico, Attorney General Rob McKenna told a meeting of Puget Sound Carpenters, “Now, unfortunately, because of a couple of governors – particularly Scott Walker – everyone thinks that someone who’s going to be a Republican governor, they’re going to be Scott Walker. I’m not Scott Walker. This is not Wisconsin.” A spokesperson for McKenna’s presumptive Democratic opponent, who has made a point of tying McKenna to Walker, retorted to Politico that McKenna had pushed to privatize workers’ compensation, and “called the unionization of state employees ‘dangerous.’”

After Michigan Republicans passed an “emergency manager” law that allows appointees of Gov. Rick Snyder to throw out some local union contracts, some planned to push their own right-to-work bill. But facing a Wisconsin-style recall effort against Snyder, an Ohio-style referendum effort against the emergency manager law, and a pro-union constitutional amendment drive, the House’s leading right-to-work backer has held off on introducing a bill. Rep. Mike Shirkey told Michigan’s News-Herald last month that he wasn’t dragging his feet on right-to-work because of the pro-union efforts, but declined to say when he would introduce his own bill.

Despite these Republican retrenchments, labor faces a continuing crisis. Witness Indiana, which became the industrial Midwest’s first right-to-work state this year, or New Hampshire, which if not for a gubernatorial veto would have become New England’s. Or Connecticut, where liberal Democratic Gov. Dan Malloy proposed “education reform” that would curb collective bargaining for teachers in “low-performing” schools.

So the Cold Feet Caucus isn’t cause for labor to relax. Rather, it’s a reminder of what’s at stake in higher-profile battles – especially in Wisconsin, where Democratic voters this week nominated Tom Barrett to face down Scott Walker in next month’s recall. Four weeks out, the race is much too close to call. But it’s safe to say either unions or their opponents will emerge emboldened after the June 5 vote – not just in Wisconsin, but around the country.

If Walker ekes out a victory, it won’t represent a decisive mandate for legislative union-busting. But it will be enough to get some Republicans over their cold feet.

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Josh Eidelson is a freelance journalist and a contributor at The American Prospect and In These Times. After receiving his MA in Political Science, he worked as a union organizer for five years.

May Day’s radical history

The date of Occupy's strike has ties to the eight-hour day movement, immigrant workers and American anarchism

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May Day's radical historyThis 1886 engraving depicts the Haymarket affair. (Credit: Wikipedia)
This article originally appeared on AlterNet.

American general strikes—or rather, American calls for general strikes, like the one Occupy Los Angeles issued last December that has been endorsed by over 150 general assemblies—are tinged with nostalgia.

AlterNetThe last real general strike in this country, which is to say, the last general strike that shut down a city, was in Oakland, Calif. in 1946—though journalist John Nichols has suggested that what we saw in Madison, Wisconsin last year was a sort of general strike. When we call a general strike, or talk of one, we refer not to a current mode of organizing; we refer back, implicitly or explicitly, to some of the most militant moments in American working-class history. People posting on the Occupy strike blog How I Strike have suggested that next week’s May Day is highly symbolic. As we think about and develop new ways of “general striking,” we also reconnect with a past we’ve mostly forgotten.

So it makes sense that this year’s call for an Occupy general strike—whatever ends up happening on Tuesday—falls on May 1. May Day is a beautifully American holiday, one created by American workers, crushed by the American government incubated abroad, and returned to the United States by immigrant workers.

The history of May 1 as a workers’ holiday is intimately tied to the generations-long movement for the eight-hour day, to immigrant workers, to police brutality and repression of the labor movement, and to the long tradition of American anarchism.

Perhaps the first nation-wide labor movement in the United States started in 1864, when workers began to agitate for an eight-hour day. This was, in their understanding, a natural outgrowth of the abolition of slavery; a limited work day allowed workers to spend more time with their families, to pursue education, and to enjoy leisure time. In other words, a shorter work day meant freedom. It was not for nothing that in 1866, workers celebrated the Fourth of July by singing “John Brown’s Body” with new lyrics demanding an eight-hour day. Agitating for shorter hours became a broad-based mass movement, and skilled and unskilled workers organized together. The movement would allow no racial, national or even religious divisions. Workers built specific organizations—Eight Hour Leagues—but they also used that momentum to establish new unions and strengthen old ones. That year, the Eight Hour Movement gained its first legislative victory when Illinois passed a law limiting work hours.

The demand for an eight-hour day was about leisure, self-improvement and freedom, but it was also about power. When Eight Hour Leagues agitated for legislation requiring short hours, they were demanding what had never before happened: that the government regulate industry for the advantage of workers. And when workers sought to enforce the eight-hour day without the government—through declaring for themselves, through their unions, under what conditions they would work—they sought something still more radical: control over their own workplaces. It is telling that employers would often counter a demand for shorter hours with an offer of a wage increase. Wage increases could be given (and taken away) by employers without giving up their power; agreeing to shorter hours was, employers knew, the beginning of losing their arbitrary power over their workers.

The Illinois eight-hour law was to go into effect May 1, 1867. That day, tens of thousands of Chicago’s workers celebrated in what a newspaper called “the largest procession ever seen on the streets of Chicago.” But the day after, employers, en masse, ignored the law, ordering their workers to stay the customary 10 or 11 hours. The city erupted in a general strike–workers struck, and those who didn’t leave work were forced to by gangs of their colleagues roaming through the streets, armed with sticks, dragging out scabs. After several days of the strike, the state militia arrived and occupied working-class neighborhoods. By May 8, employers and the state they controlled had won, and workers went back to work with their long hours. The loss of the eight-hour-day movement led also to a massive decline in unions, and the labor movement would not pick up in such numbers for almost two decades.

The Illinois law and its defeat, however, were not forgotten. By the 1880s, a new labor movement had grown up in Chicago. This one was more radical and was dominated by immigrant workers from Germany. They remembered 1877, when a strike by railroad workers spread around the country. For a brief moment, as strikers took control of St. Louis and Pittsburgh, staring down the national guard and local police, nobody knew what would happen. But President Rutherford B. Hayes called out the army and brutally repressed the strike. They also remembered the state was rarely if ever on the side of the worker. Yet they also remembered the brief shining moment when it appeared that there might be an eight-hour day.

So in 1886, the Chicago Central Labor Union again demanded an eight-hour day. Led largely by anarchists like August Spies and Albert Parsons, this renewed movement demanded “eight for 10”–that is, eight hours’ work for 10 hours’ pay. Throughout the winter of 1886, they successfully organized and won a series of small victories, largely in German butchers’ shops, breweries and bakeries, where owners agreed to recognize unions and grant shorter hours. Then they issued a new demand: that again on May 1, Chicago would go on a general strike and not return to work unless employers agreed to an eight-hour workday.

The demands of the militant Chicago anarchists coincided with a massive upswing in other militant movements. Workers and Texas farmers were rebelling against a monopolistic railroad system. The Knights of Labor were rapidly organizing and spreading their vision of a cooperative, rather than capitalistic, society. “What happened on May 1, 1886,” writes James Green, the most recent and most accessible historian to have written about it, “was more than a general strike; it was a ‘populist moment’ when working people believed they could destroy plutocracy, redeem democracy and then create a new ‘cooperative commonwealth.’”

Four days later, it all came crashing down. On May 3, police had shot to death six strikers at the McCormick Works, where a long-standing labor dispute had turned the factory into an armed camp, and beaten dozens more. On May 4, anarchists held an outdoor indignation meeting at a square called the Haymarket to protest the police murders. Anarchist leader Samuel Fielden was wrapping up his speech when the police, led by the same inspector who had led the charge at McCormick the night before, moved in to disperse the crowd. “But we are peaceable!” Fielden cried, and just then somebody wasn’t. Somebody threw a bomb at the police, the police open fire, and the course of American history changed.

To this day we do not know, nor will we likely ever know, who threw the bomb. Some say it was an agent provocateur. Some say it was an anarchist. If it wasn’t an anarchist, it surely could have been, since there were indeed anarchists who made bombs and would have thrown one given the opportunity. But we also know that many of those who died that night, including police, were felled by the police bullets.

We also know that the effect of the Haymarket bombing was far greater on the labor movement than it was on the police. Eight anarchist leaders were rounded up and put on trial for the murder of a police officer. No evidence was ever given that any of them threw the bomb, and only the flimsiest evidence was presented that any of them were remotely involved. All eight were convicted, and seven were sentenced to hang. Two of these had their sentences commuted, and a third—Louis Lingg, undoubtedly the most radical and militant of them—cheated the hangman by chewing a detonator cap and blowing off his jaw. The remaining four—August Spies, Albert Parsons, Samuel Fischer, and George Engel—were hanged on November 11, 1887. They went to their deaths singing the Marseillaise, then an anthem of the international revolutionary movement, and before he died, Spies shouted out his famous last words: “The time will come when our silence will be more powerful than the voices you strangle today.”

Before that happened, the state ensured more silence. The strike collapsed. Police around the country raided radicals’ homes and newspapers. The Knights of Labor never recovered. In the place of the radical industrial labor movement of the mid-1880s rose the American Federation of Labor, the much more exclusive and conservative organization that would dominate the labor movement until the 1930s. Meanwhile, it would take until the Fair Labor Standards Act of 1938 to finally enshrine the eight-hour day into federal law.

May 1 would live on, mostly abroad. In 1889, French syndicalist Raymond Lavigne proposed to the Second International—the international and internationalist coalition of socialist parties—that May 1 be celebrated internationally the next year to honor the Haymarket Martyrs and demand the eight-hour day, and the year after that the International adopted the day as an international workers’ holiday. In countries with strong socialist and communist traditions, May 1 became the primary day to celebrate work, workers and their organizations, often with direct and explicit reference to the Haymarket Martyrs. May Day remains an official holiday in countries ranging from Argentina to India to Malaysia to Croatia—and dozens of countries in between.

Yet in the United States, with some exception, the workers’ tradition of May 1 died out. Partially this was because the Knights of Labor had already established a labor day in September. Opportunistic politicians, most notably Grover Cleveland, glommed onto the Knights’ holiday in order to diminish the symbolic power of May 1. In 1921, May Day was declared “Americanization Day,” and later “Loyalty Day” in a deliberately ironic attempt to co-opt the holiday. Even that was not enough, though, and in 1958 Dwight Eisenhower added “Law Day” to the mix, presumably a deliberate jibe at the Haymarket anarchists who declared, “All law is slavery.” Today, few if any Americans celebrate Loyalty Day or Law Day—although both are on the books—but the origins of May Day are largely forgotten. Like International Women’s Day (March 8), which also originated in the U.S., International Workers’ Day became a holiday the rest of the world celebrates while Americans look on in confusion, if they notice at all.

Yet May 1 lives on, and indeed has been rejuvenated in the United States in the past few years. In 2006, immigrant activists organized “a day without an immigrant,” a nationwide strike of immigrant workers and rallies. It was perhaps the largest demonstration of workers in United States history. These immigrants, mostly from Latin America, had brought May 1 back to its birthplace, and in so doing they resurrected its history as a day specifically for immigrant workers.

It is appropriate that when the Occupy L. A. first issued its call for a general strike this May 1, it said the strike was “for migrant rights, jobs for all, a moratorium on foreclosures, and peace.” The order was significant, for migrants in the United States have been the ones who have made sure that the voices the state strangled that November day have remained so powerful. And regardless of what happens on Tuesday—and of course an actual general strike, in which cities grind to a halt and workers control what activities occur, is unlikely—we can, through a national day of action for the working class, work toward a new cooperative commonweath. We have a opportunity now to create and renew the labor movement, through new tactics, but ones that pay homage to the generations that preceded us.

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Jacob Remes teaches history and public affairs at Empire State College, SUNY’s college for adult learners.

Minimum-wage misconceptions

Contrary to right-wing propaganda, decent pay for workers helps the economy and boosts job creation

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Minimum-wage misconceptions (Credit: sarken / CC BY 2.0)
This originally appeared on AlterNet.

Sen. Tom Harkin, Democrat of Iowa, has introduced a bill to raise the federal minimum wage to $9.80 from its present level of $7.25. Polls are showing many voters in favor, though they are confused about what it would mean for the job market. The truth is that a move would be good for a slow economy and have a positive impact on the job crisis. Naturally, this has led to the usual cries of opposition, largely based on the notion that raising the minimum wage hurts the very people it is supposed to help. Typical of this view is a letter to the New York Times from Michael Saltsman, a fellow at the Employment Policies Institute, a business-backed nonprofit research group (surprise!).

AlterNetSaltsman trots out the old canards against the minimum wage, claiming that research indicates that a minimum wage increase “simply doesn’t help the poor — in fact, it hurts them.” He cites studies which showed that states with their minimum wages between 2003 and 2007 found no associated decline in state poverty rates. Saltsman gives three reasons for this:

  1. A majority of working-age individuals who live in poverty don’t work and thus cannot benefit from the raise.
  2. A clear majority of those who do earn the minimum wage live in households that aren’t in poverty.
  3. Less skilled and less experienced employees lose employment opportunities when the cost to hire and train them rises as a result of a minimum-wage increase.

Let’s take these arguments in turn. Implicit in the first point is that a majority of working-age individuals don’t work because they choose not to (that is, they are lazy scroungers), or because unemployment is caused by laziness or lack of training. The argument they often use is that “I can get a job; therefore all the unemployed could get jobs if only they tried harder or got better education and training.”

The way I go about demonstrating that fallacy is a dogs-and-bones example. Say we have 10 dogs and we bury nine bones in the backyard. We send the dogs out to find bones. At least one dog will come back without a bone.

We decide that the problem is lack of training. We put that dog through rigorous training in the latest bone-finding techniques. We bury nine bones and send the 10 dogs out again. The trained dog ends up with a bone, but some other dog comes back without a bone (empty-mouthed, so to speak).

The problem is that there are not enough bones and jobs to go around. <!–The “bones” in the jobs discussion are insufficient spending power in the economy.–> It is certainly true that a well-trained and highly motivated job seeker can usually find a job. But that is no evidence that aggregate unemployment is caused by laziness or lack of training. And besides, we could easily determine how much unemployment is truly voluntary. The government could serve as the “employer of last resort” under a job guarantee program modeled on the WPA (the Works Progress Administration, in existence from 1935 to 1943) and the CCC (Civilian Conservation Corps, 1933-1942). The program would offer a job to any American who was ready and willing to work at the federal minimum wage, plus legislated benefits. No time limits. No means testing. No minimum education or skill requirements.

It’s hard to believe that reducing or even eliminating the minimum wage (which is the corollary of Saltsman’s point), would enhance employment, when the problem is a basic lack of demand. Business will not hire more workers until it has more sales. Consumers will not spend more until they’ve got more jobs. A private-sector recovery requires 300,000 new jobs every month. But the private sector doesn’t need 300,000 new workers per month until there exists sufficient spending power in the economy to induce them to hire those workers. How is retaining a static, or reduced minimum wage, going to achieve this?

Higher wages means higher income and thus higher consumption spending, which induces firms to employ more labor. So the truth is that economic theory does not tell us that raising the minimum wage will lead to more unemployment; indeed, theory tells us it can go the other way — raising the minimum wage could increase employment. That’s one of the reasons Henry Ford believed in paying his workers a decent wage: so that they could buy his product.

To be sure, even an increase in the minimum wage to $12 or $15 an hour is not going to provide the means to purchase a Ford (or GM) today. And so what if, as Saltsman argues, the workers earning this minimum wage are not living in poverty? Does that mean they wouldn’t spend the money derived from an increased minimum wage? I wonder if Saltsman would also argue that tax cuts across the board are unnecessary because most of the people who receive them are not living in poverty?

That argument is a red herring. The truth is, if you earn your money through wages (unlike many of the 1 percent, who earn through things like investments and a tax system biased in favor of capital gains over income) then a higher wage, minimum or otherwise, would mean that you’d spend the additional dollars, creating jobs for other workers. You’d pay down your mortgages and car loans, getting yourself out of debt. You’d pay more taxes — on sales and property, mostly — thereby relieving the fiscal crises of states and localities. More teachers, police and firefighters would keep their jobs. America would get a virtuous cycle toward higher employment and, more importantly, the cycle would be based on a policy that creates higher incomes, not higher debt via credit expansion.

Then there’s the common belief that minimum wages cause unemployment, which relates to Saltman’s third point – namely that less skilled and less experienced employees lose employment opportunities when the cost to hire and train them rises as a result of a minimum-wage increase. It is at least partly true that for an individual firm, higher wages reduce the number of workers hired. But we cannot extrapolate that to the economy as a whole. The issue of eroding wage competitiveness, which allegedly follows from a higher minimum wage, doesn’t really apply to jobs that offer the minimum wage. It might apply to areas such as manufactured goods and traded services like insurance and banking. But these are sectors in which most people already earn far more than the minimum wage.

As far as the minimum wage goes, the jobs we’re talking about are in non-traded services like checkout clerks, hair cutters, domestic help and food-service workers. When checkout clerks and cooks earn more in wages, then businesses start getting the sales required to induce them to hire more workers. And if sales are robust enough, then guess what? Even more workers will be hired, or wages will be increased.

The point is that wages are a source of demand, as well as a cost input. Reduce wages and demand plummets, which more than overrides any cost savings derived from paying less to workers (especially given today’s paltry minimum wage, which is hardly a living wage for any American).

Let’s be clear: Americans have never embraced welfare. For better or worse, our nation has always preferred a more libertarian path: self-help, personal responsibility, individual initiative. As a result, our welfare programs have always been stingy, temporary and purposely demeaning. But maintaining the minimum wage at today’s ridiculously depressed level does not enhance anybody’s employment prospects. In fact, it makes things worse, because it sucks demand out of the economy and minimizes the chances of those now receiving unemployment benefits or other assistance to quickly get back into the workforce, to “pull themselves up by their own bootstraps,” as conservatives like to say. They cannot do that when our politicians continue to focus on policies that merely enhance the incomes of the top 1 percent.

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