B   M   W   E
JOURNAL
 
ONLINE VERSION VOLUME 106 - NUMBER 6 - JULY 1997
 
If Nobody Spends, Nobody Works
 
By Jeff Faux

Ever wonder why so many people who ought to know better take big business’ side of an argument? Even many union members nod their heads when some corporate CEO or conservative politician says the country "can’t afford" more money for schools, or that making it easier for people to join unions is "impractical," or that national health insurance "can’t work."

It’s no accident. For more than 20 years, business groups have been training people to argue for conservative economic ideas--over the back fence, on talk radio, in letters to the editor. In effect, they’ve created an echo chamber for their ideas, which get repeated and repeated until the average person begins to think it must be so.

A dozen years ago, when I lived in Maine, I was invited to debate the case for unions at the state university. When I showed up, there were about 100 people in the room, along with my opponent--an insurance salesman.

You could see he was nervous, that he wasn’t used to speaking in public. He had a few notes on 3 x 5 cards and his hands shook a little. But he was game. And, although I think I won the argument, by the end of the debate he had warmed up and wasn’t doing too badly. Afterward, I asked him where he got his information. He told me that he’d gone to a program sponsored by a business group on how to argue for conservative economic ideas.

A couple of years later I was driving late at night and I heard him on a talk radio show. This time he was sharp, relaxed and had his "story" down cold. According to his story, American workers were doing just fine. Anyone having a hard time paying bills was either unskilled or had a bad attitude. He said that unions made wages and benefits so expensive that business was "forced" to outsource to Mexico and Asia. He claimed that minimum wages, health and safety regulations and laws protecting consumers against harmful food and drugs were bad economics. And, of course, he said that taxes on corporations should be cut.

His ideas were just as wrong as they had been two years before. But he was a lot more convincing. He used words ("union bosses," "protectionism," "lazy bureaucrats") you hear in the speeches of right-wing politicians or on Rush Limbaugh-type TV and radio shows. It was a classic example of the echo chamber at work.

That’s why the effort by the AFL-CIO and its unions to create a national dialogue about how the economy works is so important. It’s time that business had a little competition from labor in the marketplace of ideas. It’s time for union members around the nation to start arguing back--to make the case that unions and the progressive policies they stand for are good for all Americans.

Working families need to create their own echo chamber with the message that paychecks are more important than stock market speculation, that people are more important than profits.

Understanding basic economic issues is mostly a matter of common sense. Let’s take the minimum wage. Most union members make more than the minimum wage and many think it doesn’t affect them. But it does. If wages are kept too low, customers won’t have the money in their pockets to buy the goods and services that business produces. In a market economy like ours, if nobody spends, nobody works.

This helps explain why we need government policies--like the minimum wage or lower interest rates--to maintain purchasing power. If you left it up to business, workers wouldn’t have enough money in their pockets to buy the goods they make. The late Walter Reuther, former president of the United Auto Workers, once walked through a plant with a vice president of the Ford Motor Company. The executive showed Reuther the new high-technology machinery that the company had bought, and added that the machines would put six dues-paying UAW members out of work. Reuther asked, how many cars would the machines buy?

Don’t be fooled by people who use numbers to twist the truth. Torture a statistic, goes the saying, and it will tell you anything. For example, the pro-NAFTA politicians have been telling us for the past two years that exports to Mexico and Canada are up. What they don’t tell us is that imports are up much further, and the result has been a net loss of more than 400,000 American jobs. Reporting the exports without the imports is like giving you only the runs that one team scored in a baseball game.

The more you hear about the economy from the point of view of people who work for a living, the more you’ll begin to spot the distortions in the newspapers and on TV. Arm yourself with some reliable facts that make sense to you, and start debating. Write a letter to the editor or call in on the talk shows. Maybe one of these days you’ll meet up with that insurance salesman from Maine. If you do, give him hell.

Jeff Faux is an economist and president of the Economic Policy Institute in Washington, D.C. His latest book is The Party’s Not Over, published by Basic Books.

Reprinted from America @ Work, May-June 1997.

 
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