Dr. Pepper is hurting America

One could call a recent episode, in which the employees at a Mott’s factory in upstate New York’s Williamson face a $1.50 an hour pay cut combined with other benefits reductions just another day in the continued American slide toward inequality. Yet as noted by New York Times writer Steve Greenhouse, the strike is interesting because the concessions are being demanded at at time when the parent company, The Dr. Pepper Snapple Group, is showing healthy profits.

As noted by Leo Casey over at Dissent Magazine’s blog, there’s nothing new about the race to the bottom which has undermined middle class incomes over the past 40 years. Wages for the bottom 90% of the American workers have stagnated for the last 30 years, at the expense of the wages of the top 10%. That’s 20 years of growth for which all of the benefits have flowed to society’s richest.

There is no reasonable argument that this is fair – data shows that the change can’t be attributed to growing gaps in educational attainment.

Besides fairness, however, there is growing understanding, backed up by evidence and theory, that inequality is a large part of what caused the financial crisis.  Former chief economist at the IMF Simon Johnson lays out arguments to that effect from Robert Reich and Raghuram Rajan, no economic slouches themselves. While admitting the long term fiscal problems faced by the United States, Johnson points out that the immeditate causes of the fiscal crunch was paying for the financial crisis – one facilitated by 30 years of growing inequality.

Johnson’s argument is about the implications of this understanding for US fiscal policy, but it also provides a useful perspective on the Mott’s strike. A recent book from Richard Wilkinson and Kate Pickett (you can read a defence against their critics here) has demonstrated the almost unbelievable numer of ways in which equality improves the lives of whole societies (that is, not just the poor); the work of Johnson, Rajan and Reich simply adds another reason to realize that the US has far from crossed the line from reasonable into irresponsible.

Some public advocacy groups have taken a hard tack on inequality, yet public awareness on the causes of inequality have as of yet gained much less traction, and policy responses seem focused on tax measures alone. It is all well and good to focus on individuals and their earnings, but ultimately distribution is a result as much, if not more, of the regulation of the market as it is of post-income readjustment. The Mott’s strike demonstrates just one of the myriad ways in which corporations – empowered and informed by legal rules and government policies – are allowed to increase their share of the total economic pie. It is this wealth which has increasingly found its way into the hands of America’s richest.

If Americans want to do something about inequality – and the crisis has shown that we all have a stake in America rebalancing its economic pie – then they have to do more than raise taxes on the beneficiaries of corporate largesse. They have to go after the largesse itself, with policies which ensure a fairer distribution between business and workers in their common enterprise. That requires a political strategy which focuses not only on the individual workers, but on the larger economic ramifications of short-term corporate policies.

It requires progressives not only to stand in solidarity with the striking workers, but to point out to American independents, fiscal conservatives, and anyone willing to listen, that is not only a matter of Mott’s shortchanging handful of workers. These policies, and those like it, have implications for American social outcomes, global financial stability and the nation’s fiscal health.

So even if it has the ring of comedy, we have to start pointing out the greater truth of the matter, much as John Stewart did when he called out the hosts of CrossFire: it’s not that the demand in Williamson for concessions are bad. It’s more than that.

Dr. Pepper is hurting America.

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