Our Annual Labor Issue is out!

0915cover--very-largeOur September/October Annual Labor Issue is out!  (In time for Labor Day, for the first time in a long while!) We have emailed the full-color pdf to electronic subscribers and print subscribers should be getting their copies in the mail in the next few days.  See the full table of contents here.

We have posted two articles from the new issue to the website: John Miller’s “Up Against the Wall Street Journal” column on German Wage Suppression, and Harry Konstantinidis’s “Making Sense” piece, What’s Next for Greece?. Konstantinidis talks about what Syriza, or whichever party or coalition wins the snap elections that have been scheduled, can and should do to deal with the harsh terms of the agreement Syriza was forced to accept from the Troika. (His recommendations are in sync with the ones Leo Panitch and Sam Ginden put forward in recent pieces emphasizing that the Greek government still has some latitude despite the austerity agreement; see The Syriza Dilemma in Jacobin and The Real Plan B: The New Greek Marathon, in The Bullet; you can listen to Leo Panitch present some of these ideas on this recent episode of Doug Henwood’s great radio show Behind the News).)

Here is this issue’s page 2 editorial note:

“Born Free … But Everywhere in Chains”

That is Jean-Jacques Rousseau’s description—from The Social Contract (1762)—of the plight of suffering humanity. And it aptly describes the condition of labor in the world today. The “chains” are not, for the most part, literal. But the downtrodden condition of labor, in an era of rampant capitalist power, is unmistakable.

In the United States today, fewer than one in fifteen private-sector workers is a union member. The average real hourly wage has hardly budged for half a century. And workers’ share of total income has declined dramatically: from about 66% in 1960 to about 56% today, according the Bureau of Labor Statistics (BLS) data.

These overall figures, moreover, hardly capture labor conditions for the most vulnerable workers in the United States. As Zoe Sherman describes in “Manicures, Pedicures, and Commodity Fetishism,” the mostly immigrant women workers in New York City nail salons labor under abhorrent conditions: Most get less than the minimum wage. Wage theft is widespread. And exposure to toxic chemicals creates serious health hazards.

The picture is hardly rosier around the world. Germany, once known for “high road” labor relations, has turned sharply toward wage repression. As John Miller argues in his “Up Against the Wall Street Journal,” that has meant inadequate domestic demand and sluggish growth. But it has also bolstered Germany’s trade surplus, contributing to huge trade deficits for countries like Greece.

In India, tens of millions of women have exited the wage-labor force in the last decade. Even as the Indian economy has boomed, economist Sirisha Naidu observes, women have lost jobs in the declining agricultural sector, but gotten few jobs in the growing industrial sector. The enormous shift of women from wage labor to unpaid household labor, Naidu argues, represents a survival strategy where paid employment opportunities are scarce.

Meanwhile, Mexico has experienced a transition, since the late 1980s, from statist capitalism and party-state control of labor to even-more-naked exploitation under neoliberalism. As Dan La Botz reports, some 18 million Mexican workers get wages of $9 per day or less. Yet, even in the midst of widespread disillusionment with the political system, no clear, radical alternative has emerged—either in terms of new insurgent unions or political movements.

In all these cases, we need to look unflinchingly at the depths of the problems and come up with clear-eyed ways forward.

In the depths of the crisis in Greece—and of the Syriza government in the wake of the latest capitulation to the creditors—economist Harry Konstantinidis outlines a sorely needed leftist program, including the “productive reconstruction” of the Greek economy along principles of worker self-management and participatory budgeting.

For India, Naidu argues for a new development program prioritizing job creation, living-wage and labor-conditions regulation, and essential public services. Government action against gender discrimination and sexual harassment, too, is necessary for inclusive development.

Finally, Cynthia Kaufman argues that, to help get us out of the “economic dependency trap of capitalism”—reliance on the capitalists who control investment, production, and employment—the solidarity economy cannot remain “utopian islands in a sea of misery.” Rather, it must become part of a broader movement for expanded social safety nets, shortened work hours, and reduced economic inequality.

Leaping into change can be terrifying. But at some point, the status quo becomes intolerable, and the promises of those in power too empty to be believed any longer. There may be but glimmers of a fight-back today, perhaps at first just to stave off further losses, then to win back some of what has been taken away. But those struggles can also be the beginnings of a bigger struggle—to create a new kind of society, founded on liberty, equality, democracy, and solidarity.

It may not be literally true that workers—born free but everywhere in chains—have nothing to lose by taking that leap. But this is true: They have a world to win.

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On Its 80th Birthday, Securing Social Security


Today is the 80th anniversary of Social Security; here’s our book reviewer Steve Pressman’s review of Social Security Works!, from our current issue:

Social Security Works! Why Social Security Isn’t Going Broke and How Expanding It Will Help Us All by Nancy J. Altman and Eric R. Kingston, with a Foreword by David Cay Johnston (New Press, 2015).


President Franklin D. Roosevelt signed the Social Security Act nearly 80 years ago, on August 14, 1935. Since its inception, Social Security has had both strong defenders and harsh critics. Defenders see it as a successful program that enables American workers to retire rather than work until they drop; critics see it as a government Ponzi scheme promising unsustainable entitlements.

The American public has also been of two minds regarding Social Security; they worry about the program going bankrupt, but also favor expanding it.

Social Security Works! makes a strong case for expanding Social Security. Its authors worked on the Greenspan Commission in the early 1980s (Altman was Alan Greenspan’s assistant). In this book, however, they criticize the Commission report, which led to higher Social Security taxes and lower Social Security benefits for all Americans.

The book’s great strength is its solid case that Social Security is an insurance program rather than an entitlement. With insurance, payments protect people from large future expenses. Social Security protects Americans from financial disaster as a result of becoming disabled or exhausting their savings during a long retirement. The program has been a great success in reducing poverty for the disabled and elderly in the United States, which is why it is so popular.

Social Security also provides life insurance. Initially, the system only covered workers, so when a recipient died, his or her family received no benefits. This flaw was soon corrected by adding survivors’ benefits. As a result, Social Security aids surviving spouses plus 4.4 million children today.

But the program does have problems. Retirement benefits will be 24% lower for those born after 1959 because Congress adopted the Greenspan Commission recommendations—increasing the age to receive full benefits from 65 to 67, delaying cost-of-living adjustments, and taxing benefits for most households. Future increases in Medicare premiums will add to these losses.

Another problem is the projected revenue shortfall (a bit more than 2% of annual wages subject to Social Security taxes). Beginning in the 2030s, Social Security taxes will not be able to pay all promised benefits and monies accumulated to fund the retirement of the baby boomers will be exhausted. General revenue could fund benefits; but this would transform Social Security from an insurance plan into an entitlement program, since benefits would no longer be linked to individual contributions.Entitlement programs typically have low political and popular support, which is why FDR insisted that Social Security be self-financing.

A third problem is insufficient insurance protection. To strengthen the program, Altman and Kingston want to increase monthly benefits and establish a minimum benefit so that Social Security provides at least 125% of poverty-level income for every eligible household. They also suggest adding paid parental leave to the program. Finally, they propose restoring college education benefits for the children of disabled or deceased workers, something eliminated in 1981.

Following FDR’s political instincts, Altman and Kingston suggest financing these benefits by eliminating the Social Security wage cap, investing some of the current surplus in corporate stocks (for their higher average rate of return than U.S. treasury bonds), and imposing a 10% millionaire’s tax and a 0.5% stock transfer tax, with the proceeds devoted to Social Security. For 2015, Social Security taxes only the first $118,500 of wage income (this figure increases each year with inflation). Removing the wage cap would help finance a significant expansion of the program.

While these are all reasonable extensions of Social Security, the book does have some flaws. First, it lacks historical detail. For example, it fails to explain why FDR insisted that Social Security taxes finance benefits. Altman’s The Battle for Social Security (Wiley, 2005) provides this background. It would have strengthened this book to include some of that material here. Second, it makes no case for adding paid parental leave, which enables parents to afford to take time off from work around the birth of a new child. This is a program that every developed nation has—except the United States. Third, its claim that Social Security faces no financial problem is a bit misleading. The retirement and disability portions should be fine (given the current structure of benefits and taxes), if the U.S. economy performs relatively well over the next half century (with low unemployment and greater wage equality). But the Medicare part of the program faces large projected deficits.

For me, however, the biggest problem is the uneven quality of its defense of Social Security. After clearly explaining why Social Security is not unfair to the young or to minorities, it quickly dismisses the claim that Social Security is a Ponzi scheme. This popular assertion requires a detailed rebuttal. And, strangely, Altman and Kingston assert that the annual Trustees report should convince people that the program is solvent; yet this actually generates public fear. The July 2014 report identified 2033 as the year that Social Security, as currently structured, will most likely no longer be able to pay all its obligations.

One doesn’t have to be an Einstein to realize the threat to Social Security if Republicans win the 2016 presidential election. With Republicans likely to maintain significant majorities in Congress, cutting Social Security benefits will likely be part of the political agenda in 2017 if a Republican takes the White House.

On the 80th anniversary of Social Security, a book defending the system and seeking to alleviate fears about its demise is most welcome. And in many ways Social Security Works! does a good job defending the program. But because Social Security does so much good, and because it has such a huge target on its back, it deserves a stronger defense than it gets from Altman and Kingston.

is a professor of economics and finance at Monmouth University and author of Fifty Major Economists(Routledge, 2013).

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