VScope
editorial screed
3/13/04

Three things demand every citizen's attention in these perilous times:

1. Joblessness - a most efficient weapon of mass destruction.
Joblessness now haunts those who thought they were secure in the upscale economic ranks of America's middle class, and who heartily embraced free trade so long as their lives weren't impacted by it. Over the past two decades, few "upscalers" could foresee the impact on their own livelihoods when U.S. corporations started shipping the manufacturing jobs of blue collar Americans to low-wage countries (Mexico, China, Indonesia) in order to cut labor costs.

The extinction of blue-collar jobs is still proceeding full force in America, thanks to American corporations who do not scruple to do business with some of the worst labor exploiters in the world.
Meanwhile, better-paid folks are learning that the cost-cutter's axe does not distinguish between blue collar and white collar necks.

When the jobs of American workers evaporated under pressure of low-wage production in the new "global economy," the American workforce was generally admonished to learn new skills which would then prepare them for the new wave of "high tech" jobs. Many Americans did so, preparing to ride that wave into a rosy economic future.

They did not see the rosy future that cost-cutting CEOs envisioned, namely axing company payrolls by shifting as many of those white-collar jobs and high-tech projects as possible to foreign labor markets where well-educated, but low-paid, workers were to be had in plenty. American corporations foresaw that it would be cheaper, easier, and infinitely more profitable to export the work itself than to import low-wage foreign workers - especially since those workers, once here, might pick up the American habit of seeking a living wage.

So it is that many hundreds of thousands - soon to be millions - of well-paying white-collar and high-tech jobs are currently being "outsourced" by American corporations to cheap labor plantations overseas by the same wage-busters (like the Microsoft executive who instructed department heads in that software giant to "Think India" and to "pick something to move offshore today") who had exhorted American workers to "upgrade" their skills.

The hollow "upgrade your skills" exhortation has been recycled for popular consumption, and is always combined with the gratuitous observation that technological advancements in any society (for instance, the combustion engine) have historically always rendered certain jobs (for instance, driving horse-drawn vehicles) obsolete.
An idle observation at best, and at worst a deliberately false analysis of the American workforce's current dilemma, namely that it is our nation's workforce itself which is being rendered obsolete by the "off-shoring" of countless jobs in order to increase corporate profits.

Corporate greed, not technological advancement, is systematically trashing this generation of technically skilled and well-educated American workers.

A recent report by economists at UC Berkeley says that as many as 14 million programming, accounting, paralegal and other service jobs are presently at risk of being "off-shored" by American corporations. Not a few of those corporations have contracts to perform jobs for government agencies in the U.S. - all in the interest of "cutting costs on behalf of the nation's taxpayers," of course.

But do America's taxpayers want their tax dollars to subsidize corporations who profit from giving jobs to low-paid foreign workers whose earnings - such as they are-- do not translate into consumer dollars spent in this country's local marketplaces? Or who are not on the tax rolls of any American cities, counties and towns?
Are America's taxpayers relieved by the deliberate "outsourcing" of jobs to foreign workplaces as far beyond the reach of America's labor laws, tax laws, and wage standards as possible, workplaces whose owners may even practice a form of slavery? Do American taxpayers think survival in the "global economy" means they must pledge allegiance to One Market Under God ?

American CEOs enrich themselves by enriching the bottom line of top shareholders - an enrichment at the immediate expense of millions of American families. If CEOs and top stockholders feel no obligation to us, should we feel any obligation to them? If they set themselves and their corporate fortunes above the fortunes of our families, our communities, and our nation, should we not begin to separate them from the special tax breaks, enormous subsidies, regulatory favors, political privileges, and all the other advantages which they consider the divine right of corporate kings?

Some political commentators have advanced the argument that Americans should be grateful for cheaper prices of merchandise and services made possible by the ceaseless corporate quest for cheaper and cheaper overseas labor.
What a concept! Americans at risk of losing their jobs should be grateful for the shopping bargains made possible by the loss of millions of American jobs!
Such gratitude would require a deliberate suspension of normal adult mental activity.

2. More than 117 million people - representing 56 percent of the American labor force - work for businesses that employ less than 500 people.
Should we not, therefore, turn our attention to the difficulties big corporations have heaped on America's small businesses?

Small business owners are at a big disadvantage when competing with global giants.
Major corporations get deeper discounts on everything from merchandise to health insurance for their employees to fees charged on credit card transactions to interest rates on borrowed money.
So why does the federal government tax the largest corporations at rates that are in many cases less than half the rate paid by neighborhood "Mom and Pop" stores?

Most small businesses are sole proprietorships and, as such, the owners pay taxes at their personal tax rate. A married small business owner whose store made between $56,800 and $114,650 in profits in 2003 would have been taxed at a 25 percent rate. A more successful small businessperson, one whose business generated more than $312,000 in profits, would pay tax at a 35 percent rate.

The federal corporate tax rate is 35 percent, but large corporations don't pay anywhere near that amount. Armies of corporate lobbyists, tax attorneys and accountants have won new laws and mined the existing tax code for clever deductions and tax credits that have dramatically reduced the tax rate of America's largest businesses. The nation's corporations were estimated to pay less than 15 percent of their net income in federal taxes last year, according to Citizens for Tax Justice, a widely respected non-partisan research organization.

America's personal income tax is a progressive system that taxes those with the highest incomes at the highest rates.
The American corporate tax system has evolved in an opposite direction: small neighborhood businesses pay higher tax rates than giant multinationals.

In the 1980s, as corporate greedheads were busy pillaging the nation's de-regulated Savings and Loan industry, news that dozens of American businesses with billions of dollars in profits were paying no taxes at all drew considerable public anger. The result? A crackdown, in 1986, on corporate tax shelters; also, corporate subsidies were reduced. Now the corporate tax dodges and subsidies have reemerged, once again weakening the competitive position of small business and starving the federal budget of much-needed revenues.

While big businesses dodge their fair share of taxes, small businesses ("the economic backbone of our country") struggle to survive.
Tens of millions of jobs are at risk in that struggle.

Federal budget writers try to cope with the biggest deficits in history by slashing programs that serve public needs, even as corporate subsidies continue to grow unabated - more than $125 billion each year. These government subsidies are not going to struggling small businesses that need taxpayers' help to survive, but rather they are handouts to some of the most profitable and successful big businesses in the nation: drug manufacturing, insurance, oil drilling, and commercial real estate, for example.

Corporate tax reform, properly done, can reinvigorate America's small businesses, restore public confidence in the fairness of the tax system, and generate much needed revenues to sustain education, housing, healthcare and other needed elements of a society whose citizens have historically believed that "we are all in this together ." Big corporations would have to pay more, but the millions of small businesses trying to survive in America would end up paying a lot less.

The realization that "we are all in this together" brings us to a most important issue:

3. The Living Wage
When Americans are paid enough to support their families, they pay more taxes and buy more goods and services in the local economy, stimulating its growth.
But the federal minimum wage, which in 1968 stood at 86% of the wage necessary to lift a worker and his or her family to the official poverty line for a family of four, today represents less than 64% of that living wage.
In many higher-cost regions (ours, for instance), a true living wage is substantially higher. Just to pay the rent on a one room apartment in NJ you'd have to be earning about $20.00 an hour, which represents the combined income from 4 minimum wage jobs.

The federal minimum wage, presently $5.15 an hour, would have to be raised to $8.20 an hour simply to meet the federal poverty level.

Why should any taxpayers who have themselves attained decent incomes care about the millions of our country's "working poor?"
How about this: when people are paid enough to support their families they no longer need to rely on public assistance in the form of housing subsidies, medical assistance, food stamps, and welfare.
In effect, all American taxpayers are subsidizing employers who don't pay living wages.

Big Business lobbyists predict economic doom and mass unemployment in their consistent opposition to minimum wage increases. These dire predictions never came true when the minimum wage was increased in the past, but the BigBiz lobby is nonetheless dead set against raising this country's wage floor to a decent level. In their view, if future generations of Americans want jobs they should learn to live five to a room, ride bicycles to work, and think themselves lucky to have a job "manufacturing" french fries on Monday if they don't come in on Sunday .

Will Americans call for
(1)an end to the corporate "offshoring" and "outsourcing" of their jobs, for
(2) an increase in the minimum wage, and for
(3) corporate tax reform to help small businesses survive?
Sure.
We're a nation of problem solvers who know, especially when our economy is at stake, that we're all in this together.

 

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