What Happened to Organized Labor? | Robert Reich

why do big corporations continue to win while workers get shafted it all comes down to power who has it and who doesn't big corporations have become so dominant that workers and consumers have fewer options and have to accept the wages and prices these giant corporations offer this has become even worse now that thousands of small businesses have had to close as a result of the pandemic while mammoth corporations are being bailed out at the same time worker bargaining power has declined as fewer workers are unionized and technologies have made outsourcing easy allowing corporations to get the labor they need for cheap these two changes in bargaining power didn't happen by accident as corporations of gained power they've been able to gut anti-monopoly laws allowing them to grow even more dominant at the same time fewer workers who've joined unions because corporations have undermined the nation's labor laws and many state legislatures under intense corporate lobbying have enacted laws making it harder to form unions because of these deliberate power shifts even before the pandemic a steadily larger portion of corporate revenues have been siphoned off to profits and a shrinking portion allocated to wages once the economy tanked the stock market retained much of its value while millions of workers lost jobs and the unemployment rates soared to Great Depression era levels to understand the current concentration of corporate power we need to go back in time in the late 19th century corporate power was a central concern robber barons like john d rockefeller and Cornelius Vanderbilt amassed unprecedented wealth for themselves by crushing labor unions driving competitors out of business and making their employees work long hours in dangerous conditions for low wages as wealth accumulated at the top so too did power politicians of the era put corporate interests ahead of workers even sending state militias to violently suppress striking workers by 1890 public anger at the unchecked greed of the robber barons culminated in the creation of America's first anti-monopoly law the Sherman Antitrust Act in the following years antitrust enforcement waxed or waned depending on the administration office but after 1980 it virtually disappeared the new view was that large corporations produced economies of scale which were good for consumers and anything that was good for consumers was good for America power the argument went was no longer at issue America's emerging corporate oligarchy used this faulty academic analysis to justify killing off antitrust as the federal government all but abandoned antitrust enforcement in the 1980's American industry grew more and more concentrated the government green-lighted Wall Street's consolidation into five giant banks it okay to airline mergers bringing the total number of American carriers down from 12 in 1980 to just poor today three giant cable companies came to dominate broadband the can full of drug companies control the pharmaceutical industry today just five giant corporations preside over key high tech platforms together comprising more than a quarter of the value of the entire US stock market Facebook and Google are the first stops from many Americans seeking news Apple dominates smartphones and laptop computers Amazon is the first stop for a third of all American consumers seeking to buy anything the monopolies of yesteryear are back with a vengeance thanks to the abandonment of antitrust we're now living in a new Gilded Age as consolidation as inflated corporate profits suppress worker pay supercharged economic inequality and stifled innovation meanwhile big investors made bundles of money off the growing concentration of American industry Warren Buffett one of the Marika's wealthiest men has been considered the conscience of American capitalism because he wants the rich to pay higher taxes but Buffett has made his fortune by investing in monopolies that keep out competitors the sky-high profits of Wall Street banks have come from their being too big to fail and their political power to keep regulators at bay the high profits the four remaining airlines enjoyed before the pandemic came from inflated prices overcrowded planes overbooked flights and weak unions high profits of big tech have come from wanton invasions of personal privacy the weaponizing of false information and disproportionate power that prevents innovative startups from entering the markets if Buffett really wanted to be the conscience of American capitalism he'd be a crusader for breaking up large concentrations of economic power and creating incentives for startups to enter the marketplace and increase competition this mega concentration of American industry has also made the entire economy more fragile and susceptible to deep downturns even before the coronavirus it was harder for newer firms to gain footholds the rate at which new businesses formed had already been halved from the pace in 1980 and the coronavirus has exacerbated this trend even more bringing new business formations to a standstill with no rescue plan in sight and it's brought workers to their knees there's no way an economy can fully recover unless working people have enough money in their pockets to spend consumer spending is two-thirds of this economy perhaps the worst consequence of monopolization is that as wealth accumulated the top so too does political power these massive corporations provide significant campaign contributions they have platoons of lobbyists and lawyers and directly employ many voters so items they want included in legislation are inserted those they don't want our sprout they get tax cuts tax loopholes subsidies bailouts and regulatory exemptions when the government is handing out money to stimulate the economy these giant corporations are first in line when they've gone so deep into debt to buy back their shares of stock that they might not be able to repay their creditors what happens they get bailed out it's the same old story the financial returns on their political investments are sky-high take Amazon the richest corporation in America it paid nothing in federal taxes in 2018 meanwhile it held a national auction to extort billions of dollars in tax breaks and subsidies from cities eager to house its second headquarters it also forced Seattle its home headquarters to back away from attacks on big corporations like Amazon to pay for homeless shelters for a growing population that can't afford the city's sky high rents caused in part by Amazon and throughout this pandemic Amazon has raked in record profits thanks to its monopoly of online marketplaces even as it refuses to provide its essential workers with robust paid sick leave and has fired multiple workers for speaking out against the company's safety issues surprise surprise the scales have been tipped in corporate America's favor while corporations are monopolizing power has shifted in exactly the opposite direction for workers in the mid-1950s 35% of all private sector workers in the United States were unionized today 6.2 percent of them are since the 1980s corporations have fought to bust unions and keep workers wages low they've campaigned against Union votes workers that unions will make them less competitive and threaten their jobs they fired workers who try to organize a move that's illegal under the National Labor Relations Act but happens all the time because the penalty for doing so is minor compared to the profits that come from discouraging unionization corporations have replaced striking workers with non-union workers under shareholder capitalism striking workers often lose their jobs forever you can guess the kind of chilling effect that has on workers incentives to take a stand against poor working conditions as a result of this power shift workers have less choice of whom to work for this also keeps their wages low corporations have imposed non-competes anti-poaching and mandatory arbitration agreements further narrowing workers alternatives corporations have used their increased power to move jobs overseas if workers don't agree to pay cuts in 1988 General Electric threatened to close a factory in Fort Wayne Indiana that made electrical motors and to relocate it abroad unless workers agreed to a twelve percent pay cuts the Fort Wayne workers eventually agree to the cut one of the factory union leaders remarked it used to be that companies had an allegiance to the worker and the country today companies have an allegiance to the corporate shareholder period meanwhile as unions of shrunk so too has their political power in 2009 even with a Democratic president and Democrats in control of Congress unions could not muster enough votes to enact a simple reform that would have made it easier for workplaces to unionize all the while corporations have been getting states to enact so-called right-to-work laws barring unions from requiring dues from workers they represent since worker representation cost money these laws effectively gut the union's by not requiring workers to pay dues in 2018 the Supreme Court in an opinion delivered by the courts five Republican appointees extended right to work to public employees this great shift in bargaining power from workers to corporate shareholders has created an increasingly angry working-class vulnerable to demagogues peddling authoritarianism racism and xenophobia Trump took full advantage all of this has pushed a larger portion of national income into profits and a lower portion into wages than at any time since World War two that's true even during a severe downturn for the last decade most profits have been going into stock buybacks and higher executive pay rather than new investments the declining share of total u.s. income going to the bottom 90% over the last four decades correlates directly with the decline in unionization most of the increasing value of the stock market has come directly out of the pockets of American workers shareholders have gained because workers stopped sharing the games so what can be done to restore bargaining power to workers and narrow the widening gap between corporate profits and wages for one make stock buybacks illegal as they were before the Securities and Exchange Commission legalized them under Ronald Reagan this would prevent corporate juggernauts from siphoning profits into buy backs and instead direct profits toward economic investment another solution enact a national ban on right to work laws thereby restoring power to unions and the workers they represent require greater worker representation on corporate boards as Germany has done through its employee co-determination system perhaps most crucially break up monopolies break up any bank that's too big to fail and expand the Federal Trade Commission's ability to find monopolies and review and halt anti-competitive mergers designate large technology platforms as utilities whose prices are regulated in the public interest and require that services like Amazon Marketplace and Google search be spun off from their respective companies above all antitrust laws must stop mergers of harm workers stifle competition or result in unfair pricing this is all about power the good news is that rebalancing the power of workers and corporations can create an economy and a democracy that works for all not just a privileged few what do you think are you finding that you're paying more for less how else are monopolies hurting the economy let us know in the comments if you found this video informative please also watch our video the monopolization of America as always thank you for watching and please subscribe to our channel for more videos like this one

Channel: Robert Reich

Views: 102,823

Keywords: robertreich, robert reich, robert reich inequality for all, inequality media, secretary of labor, facebook, amazon, jeff bezos, jamie dimon, anti-trust, monopolies, sherman anti-trust act, conglomerate, Mark Zuckerberg, labor day, unions, sherman antitrust act, monopolies in free market economy, monopolies are bad, unions in america, monopoly mayhem, corporate america, income inequality, richard reich, robert reich dismantling the rigged economic system

Id: hwyvjvZO5Ls

Length: 13min 16sec (796 seconds)

Published: Tue Jul 07 2020