Sunday, November 25, 2012

working class life has become impossible

Peter Suderman of Reason was on Up with Chris Hayes this morning, making the libertarian argument in support of Walmart. He summarized his argument in Tweet form, which has been helpfully aggregated here. (Ignore the herp-de-derp headline attached.) Suderman is no phony, and when he speaks about the greater good for the working poor, I know he means it. But I think there are deep problems with his take.

I'll farm out the economics to the great Doug Henwood. Henwood injects some numbers that can't be perceived as anything but a disaster for retail workers and which significantly damage Suderman's point. Surely, whatever damage slightly higher prices at Walmart might cause to the working poor, it's nothing compared to the relentless downward pressure on wages. I will also point out that a huge amount of mental work is being left out of Suderman's Twitter argument in the vague Tweet #9, which states that raising prices cuts into the low-price benefit of Walmart for poor consumers. The essential question is to what degree and what practical effect?

More generally, though, I wonder what Suderman thinks of the essential plight of the working poor-- the plain fact that a very large portion of this country cannot subsist on the wages they earn. I invite anyone to do the math on a lifestyle lived at the current poverty line of $23,050 for a family of four. Even if you assume that people in such households live like monks, the numbers simply don't add up, particularly for those millions of Americans who live without access to any workable public transportation. The work of people like Barbara Ehrenreich has helped to convey some of this reality (and has met with considerable pushback from those who would prefer not to hear about it). Contributing to this problem is the federal minimum wage, which is now at an inflation-adjusted level below that of the minimum wage in 1968. In no state can a worker making the federal minimum wage at 40 hours a week afford to rent a two bedroom apartment at fair market rent. It's essentially impossible to afford payments, insurance, and gas on even the cheapest cars while feeding four and renting a modest important. What we consider basic elements of even working class lifestyle have become unreachable for millions.

What I would fear, were I a libertarian like Peter, is whether I was in fact hurting libertarianism in supporting a status quo that has become inimical to the basic American social contract. I suppose there's no reason to think that systemic change is going to come anytime soon. But our economic system is underwritten by the assumption that if you're willing to work you can at least ensure your own material security, and in the typical telling, gradually improve the quality of your life. Let's leave the middle class alone for now. I cannot imagine an honest observer who could conclude that this social contract is currently being fulfilled for those at the bottom of the income spectrum. We're all aware of the growing sense within this country that playing by the rules is no longer rewarded, that the system is failing for everyone but those at the top. Perhaps this sentiment will be directed in a way that brings us closer to libertarian principles, but I doubt it.

For Ezra Klein, who appears to be pulling the full David Broder these days, there are at least some outs. The social welfare state can be expanded, whether through indirect subsidy such as expanded public transportation (hugely important to the working poor) or direct payments. You fund such things through raising taxes on the rich, who now pay historically low rates and can afford it many times over. It's classic pity charity liberalism, and it makes our working poor even more subject to the vicissitudes of politics, and does nothing to make workers better able to redress grievances with their employers. But it's something, it's a way forward. As a bonus for Klein, it's the kind of mushy centrism that he seems to equate with seriousness these days.

What is Suderman's path forward? He's opposed to Obamacare, which makes a very real difference for the affordability of medical care for the poor. (Obamacare is his main beat at Reason.) I imagine that he's opposed to major public investment in public transportation. I'm damn sure he's opposed to higher corporate, capital gains, and upper income tax increases to fund redistributive programs. The working poor pay no income taxes and pay paltry sums in payroll taxes, cutting which would not have anything like the net positive impact as increasing money for food stamps or rent subsidies. I can only guess that Suderman's plan would involve the typical notions of a rising tide lifting all boats, that if we cut taxes and regulation the economy will grow and improve the stock of those on the bottom. But look again at Henwood's chart. That collapse for retail wages reflects the overall trend in wages across decades-- decades that correspond with a prolonged period of deregulation and tax cuts at the top. What is so strange about the notion that cutting taxes and regulation will improve wages for the rest of us is that we've been doing that for decades and seeing the opposite effect.

I said before that Suderman does care about retail's impact on the poor, and I do mean it. I wouldn't suggest otherwise. Indeed, if I were to suggest otherwise, the trend now would be to accuse me of the worst kind of political ugliness. But reflect on what that means for a moment. For a long period of time, it was acceptable  to take the Gordon Gekko line, to believe in a kind of survival of the fittest where capitalist society had no particular obligation to support those on the bottom. That's changed to the point where even the followers of Ayn Rand typically argue that their position is the position that actually helps the poor. That represents progress. But it muddies the waters a great deal, and it forces writers like Suderman to bend themselves into pretzels. This happens all the time in his reporting on Obamacare; he has many critiques of the legislation, some of them convincing. But he has no meaningful alternative, and also understands that he can't argue that sick people should just die, even if he wanted to. So there are weird gaps in a lot of his voluminous output on the subject. Those kind of gymnastics have become commonplace in conservative economic discussion, where everyone must assert the importance of helping the poor while they minimize their plight or actively work against programs to improve it.

I like a guy like Peter Suderman a lot more than I like the Gordon Gekko, fuck-the-poor types. But I understand them more, and I think there's more internal coherence to what they advocate. From a more concrete perspective, I think that the growing failure of the American system to fulfill our social contract is a problem for all ideologies, but particularly for those whose policy options are limited to tax cuts and deregulation. And a part of me believes that libertarian antipathy towards unions-- what the Walmart fight is really about, after all-- has been a profound strategic mistake, to say nothing of a real disappointment. Because the gaps that were once filled by unions look to be increasingly filled by government.Our social compact is a powerful thing, and you underestimate our desire to ensure it at your own peril.

Stripped away all the politics, and you can still see a basic problem: we can't have the kind of society we say we want to have when so much of the resources have been captured by so few. The system is not working for too many people, and the long term effects of that breakdown might be severe. I've got ideas to change things. I'm not sure if everyone does, not really.


tongorad said...

Suderman is no phony, you say.

This from an exiled piece on Suderman's wife, Megan McArdle:
"Peter Suderman worked for FreedomWorks on an astroturf campaign called Angry Renter that was essentially a Tea Party 1.0, a 2008 precursor to the Tea Party movement of 2009.

In May 2008 The Wall Street Journal exposed McArdle’s husband’s outfit as a “fake grass-roots effort” to kill off proposed Democratic Party legislation to provide mortgage relief to struggling homeowners."

And I'm not seeing much else that indicates Suderman's other than a deeply reactionary Koch Brothers employee. Can you elaborate on why you're so sure he's such a friend to the working man?

tongorad said...

"and it forces writers like Suderman to bend themselves into pretzels."

Follow the money should be the iron rule in sussing out these jackals. They get paid for writing advertising copy.

Freddie said...

In this instance, I don't think that Suderman is being disingenuous in speaking about the good of the working poor as reflected in Walmart wages and prices. I just think that he's deluded as to what would actually help them, and somewhat boxed in by an ideology that was created by people who were explicitly appealing to selfishness but which has had to adopt at least the vocabulary of compassion in the contemporary political world.

Tim Donaghy said...

It's always seemed to me that libertarian objections to unions are basically cultural. Joining a union is very often a perfectly rational choice for an individual who wants to increase their take home pay. It's just market competition taken to another arena. What's not for a libertarian to love?

Ian McCullough said...

This comment is more generally on Libertarianism and my views have congealed in the two decades since I was first exposed to the ideology. I try to be reflective and self-critical about Libertarianism, because it's the topic I'm most prone to heuristics, but experience keeps reinforcing the futility of engaging with Libertarians. By now you’d think an algorithm could just extrude Libertarian arguments (followed by insults). The entire philosophy is a house of cards designed to liberate the privileged from social responsibility and guilt. In this, it's not so different than religion - it can allow truly awful people the ability to say "no, I *am* good".
But something I decided was that it wasn't important to argue with Libertarians. I've *never* seen one change unless they were personally brought down by circumstance. Also, given the individualism, they seem incredibly ineffective at organizing on any scale that would matter. I understand the danger of the philosophy given the wealth level of the adherents, especially with our current funding model for elections. But given the predictability, inflexibility and magical thinking of Libertarians, should leftists engage them? The whole ideology seems like an elaborate time wasting trap that siphons energy from organizing. Yes, I get writing in comments on a blog isn’t pushing any policy I want forward, and putting forward leftist arguments are important, but should leftists react to Libertarians? I’ve come to think no. I get excited and hopeful by broad agreement on certain policy issues – military violence, drug policy, the police state, and privacy. But it always comes apart when talking solutions and the process of discussing policy is so predictable that I just cannot take Libertarianism seriously enough to engage honestly anymore.

matt said...

"...libertarian antipathy towards unions-- what the Walmart fight is really about, after all-- has been a profound strategic mistake, to say nothing of a real disappointment. Because the gaps that were once filled by unions look to be increasingly filled by government."

Rather than a mistake, it's a bedrock principle. Labor can't succeed against a state whose function is only 'night watchman' for capital. (Yglesias relates an illuminating detail on this regarding FDR and the UAW today.)

Also, is Obamacare "pity charity liberalism"? Is social security? Medicare? Public transit, for that matter? Why is organized labor so supportive of these programs?

Freddie said...

It's a fair question, Matt. To me it can't be answered in relation to individual programs but rather to the full suite of redistributive policies and support for worker organization and labor law. I would never want a world without food stamps; I could never believe that food stamps are enough to ensure the long term welfare of workers. If that makes sense.

tongorad said...

If you are as I see it, attempting to remind the Libertarians of the social contract in this piece, I wonder if you're forgetting that for Libertarians, the market is the social contract. According to them, if the market doesn't deliver the social goods, it's our fault. The market is the place from which all blessings flow.

And as far as the Libertarians being worried about the government filling gaps previously occupied by unions, this is not a problem for them. Considering that we've got Democratic President who's made cutting social services the number one goal of his second term, I'd imagine that Libertarians feel pretty good about their policy prospects going forward. Neat the way Neoliberals and Libertarians harmonize on so many issues isn't it?

tonycpsu said...

One of the more compelling arguments I've heard from progressives is that Wal-Mart voluntarily increasing wages would lead to much of that money coming right back to Wal-Mart as the employees spend more to provide for their families. Do Libertarian types like Suderman have an answer to this? It seems very intuitive, and the alternative is having the dreaded nanny state increasing social spending on those low income workers.

easytolo said...

Please apologize to Corey Robin for making him watch that awful movie

Brett said...

I invite anyone to do the math on a lifestyle lived at the current poverty line of $23,050 for a family of four.

You don't. It requires two incomes to make it work, usually one full-time and one part-time.

Which is actually the usual order of things. The whole "One Income Middle Class" was and always has been a privilege for those who managed to find professional or management work, plus a smaller number of working class folk who got jobs in heavily-protected, unionized sectors of the economy in the postwar period (translation: white men and some women). Most working-class families historically either had both parents (and unfortunately too often children) working in some fashion, or they were just incredibly poor by modern standards.

Of course, it wouldn't be as much of a problem if costs of living were falling faster, particularly housing and health care. But they aren't, and so Wal-Mart's major reductions in the prices of things like food costs are muted to some extent.

And a part of me believes that libertarian antipathy towards unions-- what the Walmart fight is really about, after all-- has been a profound strategic mistake, to say nothing of a real disappointment. Because the gaps that were once filled by unions look to be increasingly filled by government.Our social compact is a powerful thing, and you underestimate our desire to ensure it at your own peril.

I think unions need some way to re-invent themselves for the new, rapidly changing economy, and they haven't found it yet. They're still strong (but now weakening) in the public sector, and while you can point to increased effectiveness in breaking unionization efforts in the private sector, the simple fact is that the public support for unions as they are just isn't there anymore in the US. Look at how insignificant most of the OUR Wal-Mart protests were, particularly in terms of getting Wal-Mart employees involved.

It's something they've done before. In the late 19th century/early 20th century, unions expanded beyond the typical "craft" unions into more inclusive ones that unionized low-skilled labor, often across entire sectors of the economy.

Brett said...

EDIT: I shouldn't say that nobody found the "one income middle class" status outside of the categories I mentioned, but they did constitute a major part of it.

zmil said...

My family lived on under $15,000/year for much of my childhood. Out in the boondocks where the cost of living is low and whatnot, but hey, that's Walmart country. And my childhood was pretty awesome, to boot. Our situation was unusual, no doubt, but it can be done. In purely monetary terms, anyway. In terms of social capital we were not poor at all, so I'm not saying it's doable for everyone. Though I question whether minimum wage laws will solve the problem.

Anonymous said...

Well 15K in 1990 is comparable to almost $26K day.

Out in the sticks, the difference between a good winter or a lean one depends on the garden and deer season. It doesn't scale beyond poor farm families.

zmil said...

This was mid to late 90's, early 00's. And we didn't hunt. We did garden a good bit, but we weren't growing our own staples or anything. For several years I believe our income hovered around 12k. Of course EITC made a huge difference. And not having any major medical problems helped. I believe we were eligible for Medicaid but that was too welfarey for my dad so we didn't apply for it. If something had come up, though, I suspect we would have taken the government's help gladly.

Again, we definitely had some unusual mitigating circumstances, but my point, if such a thing exists, is that not only did we survive with very low income, we lived pretty well, or at least happily.

jpmeyer said...

There are definitely quite a few strains of libertarianism that are okay with unions. Hazlitt endorses them in Economics in One Lesson, for example while Rothbard says that they're okay as long as they aren't coercive (lol libertarian ideas of coercion lol, of course).

That then leads into a pretty common overarching theme with libertarians in that they usually can't swallow the entire philosophy and end up either picking and choosing the pieces that they believe in, or tying themselves in logical knots trying to get around ugly conclusions like how parents selling their children into sexual slavery under anarcho-capitalism is a feature rather than a bug.

Dan said...

"trying to get around ugly conclusions like how parents selling their children into sexual slavery under anarcho-capitalism is a feature rather than a bug."

The theorists themselves get around it by *touting* it as a feature.