This post is a bit of a mash-up. Three radio commentaries follow a provocative article by Hanns Skoutajan on the link between economic equality and a peaceful spirit. If the authors of The Spirit Level: Why Equality is Better for Everyone are correct, then perhaps unions are part of the solution.
Happy and Equal
Are you happy? A recent poll of some 130 countries has placed Canada in 6th place of happiness. Number one is Denmark. Having visited the famous TivoliGardens in Copenhagen, which opened in 1843, with its amusement park of great rides and eating and drinking places I can vouch that Danes are a happy people, particularly their children. But that is not the only or primary reason for the Danish being in first place in happiness or for any of the people in the top 5.
In The Spirit Level: Why Equality is Better for Everyone, Richard Wilkinson and Kate Pickett make the point that egalitarian societies are invariably happier people. And Denmark, and indeed all of the Scandinavian countries, are societies that stand out as free and equal.
Our neighbour, the people of the United States, have ebbed and are now far down the line of happiness, 16th, along with Greece, Spain, Portugal and Italy. When compared with Canadians, who share so much with our southern cousins, the US who prides itself for its freedom and democratic ethos, is nevertheless a far less egalitarian society.
“If the United States was to reduce its income inequality to something like the average of the four most equal rich countries ( Japan, Norway, Sweden and Finland) the proportion of the population feeling they could trust others might rise by 75%…. rates of mental illness and obesity might similarly be cut by almost two thirds, teenage birth rates could be more than halved, prison populations might be reduced by 75% and people would live longer while working the equivalent of two months less a year.” So argue the authors of the Spirit Level. Equality and the resultant happiness affect every facet of our lives.
Surely it is a worthwhile goal to aim for, rather than following slavishly in the footsteps of our neighbour. We are a happier people precisely because we have been less successful in building as unequal a society as has America. We are, however, well on the way of adopting and emulating their ways.
The United States prides itself as being a beacon of democracy for the whole world, in Biblical language “a city on a hill” and indeed many throughout the world still admire the United States and would give anything to live there. Unfortunately many who have immigrated have found it a less than happy experience.
Milton Friedman, of the famous Chicago School of Economics, the prophet of capitalism, admitted that he was not fond of democracy. He states “one of the things that troubles me very much is that I believe a relatively free economy is a necessary condition for a democratic society. But I also believe that a democratic society, once established , destroys a free economy.”
For Friedman and his disciples, many of them in Canada, a free economy trumps a free society. In that economy the gap between the rich and the middle class, to say nothing of the poor, has spread exponentially over the last thirty years.
Writing in the CCPA Monitor, the monthly publication of the Canadian Centre for Policy Alternatives is an article by Joseph Stiglitz, a former chief economist of the World Bank, that states that “The International community must face reality. We have an unmanageable, unfair, distortionate global tax system that is pivotal in creating the increasing inequality that marks most advanced countries today.”
In the same issue Murray Dobbin, a BC-based writer on economic, social and political issues writes, “Capital in its drive for complete freedom from community and society, has outsmarted itself. In Canada the largest corporations are now sitting on some $700 billion that they can’t invest in productive activity because demand for their products by cash-strapped consumers has flattened, 7% of them are unemployed and 14% of youth are unable to find jobs.
Nevertheless advertising continues to dangle goods before the eyes of consumers who can acquire them only as they max-out their credit cards and live in deep and unrelenting debt.
The result is an unhappy society, a divided citizenry estranged from one another by their inequality. They have become beholden to the powers of mega corporations many of whom have jettisoned their Canadian work force in favour of cheap labour in third world countries.
What is required, Wilkinson and Pickett affirm is “a society which knows where it wants to go…. coupled with the urgent task of dealing with global warming. In all these settings we must speak out and explain the advantages of a more equal society.” and thus a happier people. It can be done, indeed it has been achieved in those countries that precede us in the happiness poll. They are a measure of the possible.
I encourage you to read the above quoted book, The Spirit Level as well as subscribe and read the CCPA Monitor to become people who are informed and value democracy and equality more than did Milton Friedman.
© Hanns F Skoutajan, September 2013.
A Footnote on Friedman
Alan Greenspan gets US Medal of Freedom 2005
One of his acolytes, Alan Greenspan was Chairman of the US Federal Reserve from 1987 to 2006. He takes his philosophy from Ayn Rand, author of Atlas Shrugged who advocated a rapacious individualism. In testimony before the US Senate in 1997, Greenspan stated that growing worker insecurity is a significant factor keeping inflation and inflation expectation low, thereby promoting long term investment.
He was named by Time Magazine as one of the architects of the 2008 Recession. In October 2008, he confessed to another Congressional hearing that his faith in the unseen and unregulated hand of the market had perhaps been misplaced …
“Those of us who have looked to the self-interest of lending institutions to protect shareholder’s equity – myself especially – are in a state of shocked disbelief.”
Rep. Henry Waxman (D-CA) asked him for clarification: “In other words, you found that your view of the world, your ideology, was not right, it was not working.”
Alan Greespan replied, “Absolutely, precisely.”
CFOS Owen Sound Commentaries
I first wrote about the Great Income Gap on this site on July 2011 with “Dohconomics: how to turn a doughnut economy into a feudal society.” Since then, more and more studies are pointing out the link between falling middle class incomes and falling union membership. The following were broadcast over the summer of 2013.
June 10, 2013
So, we got to have our booze and drink it too over the May-24 weekend. But what did LCBO workers get? A small signing bonus ($400 for most), a modest 1.9% wage increase and a promise to create more full-time jobs.
What most people don’t realize, and what the media did not report, is that this strike was about part-time work. Over 60% of LCBO workers across the Province earn relatively little and receive even fewer benefits. They are on-call with two hours notice, their hours can be changed on a whim and they take home a wage that, for a family of three, hovers around the poverty line.
This is a precarious existence and it has become a North American scourge. Fully half the workers in Toronto are part time. That suits the bottom line of their employers—for one thing they don’t have to pay into OHIP. No wonder the LCBO, last year made a profit in excess of $1½ billion.
No wonder food banks are running out of food—more people are using them to make ends meet. No wonder the economy is stalling—who can afford to buy stuff when you’re living pay cheque to pay cheque? Job numbers might be up, but the economy is not.
If big box stores would roll up their prices just a little so that we paid 15 cents more every shopping trip, they could raise over a million people in the US and Canada out of poverty.
Fifteen cents. But they won’t do it. That leaves workers but one choice—unionize.
June 24, 2013
Most liquor store workers are part-time. Most of the folks behind the counter at your favourite fast food joint are part-time. Many “associates” in the local big box stores are part-time. All are at, or just above, minimum wage. Great for high school students. Not so great if you’re trying to raise a family.
Not so great for the rest of us either. Part-time means employers don’t have to pay into OHIP. About 60% of the Canadian economy and 70% of the American relies on people buying stuff. You can’t spend what you don’t have.
But wait, here’s a report of hotel workers getting a raise. Chamber maids, bell-hops, kitchen staff … all full time … all earning more than $50,000 a year, plus vacation time, sick leave and benefits. In New York City no less. That’s a middle class life in a country split by the largest gap between rich and poor since the Great Depression.
What do they have that you don’t? A union. And a good one at that. Since 1938 Local 6 of the Hotel and Restaurant Workers Union has been backing employees in some of the swankiest hotels and eateries in the Big Apple. When you’ve got someone on your side who can trump the Donald, you know you’re in the game, and I don’t mean penny ante.
As one banquet waiter put it, “The union takes jobs and turns them into professions. It makes better managers out of management. The good ones get better—the bad ones don’t survive.” As it should be.
September 16, 2013
Labour Day in Canada got its start on April 15, 1872 when people marched in support of the Toronto Typographical Union. Its leaders had been jailed for striking to get a 9-hour working day. You see, unions were illegal and strikes were a “criminal conspiracy to disrupt trade.”
It took more strikes, more marches, more jail-time and another 30 years, but finally unions were accepted as part of our capitalist system. Collective bargaining and union contracts became part of the business plan.
As Henry Ford said when he paid his workers the revolutionary wage of $5 a day, capitalism is a contract: companies must pay workers enough to buy what their employers sell. Unions, not government and certainly not Henry Ford, became the best way to enforce that contract.
But now it’s back to the future. The income gap has become the abyss of inequality it was in the roaring ‘20s. Middle class income has fallen in lock-step with declining union membership.
This is not by choice. Companies and governments on both sides of the border are making it harder and harder for workers to organize. US states that have passed right-to-work-poor legislation are on the bottom rungs of the socio-economic ladder. And politicians here want to join that race to the bottom, in spite of a World Bank study that shows no relationship between unionization and economic performance.
Looks like unions will have to start over again. Perhaps Unifor will bring today’s workers what they needed in 1872 – strength and solidarity. Looks like they’re going to need it.
© David McLaren 2013