From the Gilded Age to the Great Depression to today, the economic agenda of conservatives has been easily summarized in two words: "cheap labor." Nowhere was that more clearly on display than in the recent decision by Judge William S. Howard that "relieved" coal companies from having to pay already-earned retirement benefits to coal miners in Kentucky, West Virginia, Indiana, and Illinois.

Published on Monday, October 25, 2004 by

From the Gilded Age to the Great Depression to today, the economic agenda of conservatives has been easily summarized in two words: "cheap labor." Nowhere was that more clearly on display than in the recent decision by Judge William S. Howard that "relieved" coal companies from having to pay already-earned retirement benefits to coal miners in Kentucky, West Virginia, Indiana, and Illinois.

While the coal industry spends millions on feel-good TV advertisements featuring an eagle impressed by how they're (ahem) cleaning up the air, coal companies are cleaning up their balance sheets to give stockholders and CEOs better returns, and using bankruptcy laws to bust unions. The newest scheme is for unionized companies with pension liabilities to declare bankruptcy - during a boom time in the coal business, particularly given coal's attractiveness compared to $55/barrel oil - and then sell their operations to each other to re-open with non-union labor.

Thousands of miners - many with serious health problems – were forced to watch helplessly this month as their pensions and health benefits evaporated into thin air with, as New York Times writer James Dao noted, "a swipe of Judge William S. Howard's pen..."

None of this could have been possible without generous corporate "reforms" to bankruptcy laws pushed through Congress in the last few years by conservatives, and the lifetime appointment of conservative judges to seats on federal courts by conservative administrations. Judge Howard, for example, was appointed during the reign of George H.W. Bush, and his decisions continue to destroy union jobs and reduce labor costs for mining companies under the reign of George W. Bush.

Unions have been a bulwark of the middle class ever since the presidency of Franklin D. Roosevelt. Prior to Roosevelt’s 1935 Wagner Act, which guaranteed workers' rights to unionize, America had been mostly either very rich or very poor.

At the founding of America, the closest we'd had to a middle class was the "plowmanry" class Jefferson exalted - small family farmers – who were a major force in American politics from the time of the Revolution until the Civil War. But the industrialization of America, and the formation of huge agricultural monopolies made possible by rail transportation, began to wipe out the farming middle class (leading to the progressive Grange movement in the late 1800s), and from that time until 1935 America was increasingly a Dickensian nation of richer and poorer, with a rapidly vanishing middle class.

Workers protested, but conservatives of the Gilded Age held both economic and political power. Eleven workers were murdered in the Great Railroad Strike of 1877 when the B&O Railroad cut wages: That year only three national unions existed, and all were under siege.

In 1886, Boston police fired into a crowd of protestors – part of 340,000 strikers nationwide – who were calling for a change in the national workday from 12 hours to 8. One Boston worker died in the hail of police gunfire that injured scores of others, and four labor leaders were hanged, seriously crippling the union movement.

Of the 12 million working families in America in the census of 1890, the average income for 11 million of them was $380/year (equivalent to about $7900 today), keeping them deep in poverty. In 1893, federal troops did battle with railroad strikers in 26 states, breaking a national strike and sending labor leaders to prison. Eleven years later, while the majority of American workers were still desperately poor, Mrs. Stuyvesant Fish made society headlines by throwing a dinner party for her dog, who made a grand entrance wearing a $15,000 diamond collar.

Following the Wagner Act's implementation, and Roosevelt’s raising of the top marginal income tax rate on multi-millionaires to 90 percent, however, the first true American middle class came into being. By 1947, over a third (roughly 35%) of America's workers were unionized, and for every union job there was a non-union job in the private sector with nearly identical pay and benefits, because unions had set the floor for labor costs and employers had to compete for workers. This meant that about 70% of American workers were able to raise a family, put children through school, pay for health care, and plan a good retirement, all on a single wage earner's salary. During this era, CEOs earned, on average, around 30 to 35 times what their lowest paid employees did, and senior management salary ratio caps averaging 20:1 were put into place in civil service, the military, and most colleges.

But in 1947 the cheap-labor conservatives fought back. In the elections of 1946, Democrats lost control of both the U.S. House and the Senate, allowing Republican legislators to push through the Taft-Hartley bill, which essentially allowed individual states to opt out of portions of the Wagner act. It was an early domestic version of the "free trade" disaster we're seeing now with NAFTA and GATT/WTO - a race to the cheap labor bottom - that started to take root in the American south right after passage of Taft-Hartley. Although President Harry Truman vetoed the Taft-Hartley assault on labor, Republicans in the House and Senate overrode his veto and it became law.

From then until the end of the Jimmy Carter presidency, unionization - and, thus, average worker wages in the United States - only gradually declined. When Ronald Reagan came into office, a quarter of the American workforce was unionized, meaning half of Americans could raise a middle-class family on a single salary.

But then Reagan declared war on the middle class, starting with the air traffic controller's union (PATCO) during his first year in office. The conservative assault on labor has been unrelenting since then: Today only about 8 percent of the private-sector American workforce is unionized, and at the same time Education Secretary Rod Paige described the teachers' union as a "terrorist organization," George W. Bush announced plans to lay off over 700,000 unionized government employees and replace them with non-union "contractors."

While gutting the American middle class, conservatives also launched a well-funded propaganda campaign - using right-wing "think tanks" and talk radio - to convince workers that their growing economic woes were the fault of minorities ("affirmative action") and the poor ("welfare queens"). At the same time, they began stacking federal benches with conservative judges, and passing thousands of federal, state, and local laws, ordinances, and regulations that further weakened the powers of organized labor and their ability to unionize.

It's just fine, they said, for capital to organize in the form of a corporation. It's great when corporations organize into trade associations, chambers of commerce, industry groups, and lobbying consortiums. But to have workers organize to level the playing field? Inconceivable.

The result has been an explosion in CEO and executive pay, a rush of wealth to the conservative elite (the top 10 percent of Americans now own 71 percent of the nation’s wealth), and this year's cut in taxes to a maximum 15 percent for those who "earn their living" by sitting around the pool waiting for their dividend checks to arrive.

In 1999, Washington Post writer Dan Balz profiled Karl Rove, pointing to Rove’s affection for the Gilded Age’s most aggressive advocate for the strike-breakers and Robber Barons, and declarer of the Spanish-American war, President William McKinley (1896-1901). Writes Balz: “‘A successful party,’ Rove says of the GOP under McKinley, ‘had to take its fundamental principles and style them in such a way that they seemed to have relevance to the new economy, the new nature of the country and the new electorate.’”

So too, today. Will it be Rove’s McKinleyian Bush, with a “new economy” of terrified minimum-wage workers, an entrenched private-jet conservative elite, and wars in faraway places? Or might John F. Kerry, who often quotes Franklin D. Roosevelt and is a friend of labor, return America to its postwar era of a growing middle class, peace, and prosperity?

"The economy is booming," millionaire TV commentators tell us from their billion-dollar corporate studio empires. "The economy is creating more and more wealth," say rich conservatives. And for them, it's true, as money continues to flow from the working class up to the conservative elite and billion-dollar corporate tax cuts head legislative agendas.

Americans have a clear choice in this election year, from national to local elections. But unless average Americans wake up to the scam that's been foisted on them by the likes of Reagan, Limbaugh, and the Bush family, the American middle class will continue to evaporate just as fast as the now-stripped pensions of West Virginia coal miners.


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