American Worker Unrest Will Likely Grow as Economy Worsens
This week we learned that 1 in 10 Americans is now in if not close to home foreclosure and that almost 2 million Americans have lost their jobs. President Elect Barack Obama has told the nation that things are going to get worse before they get better. This week in Chicago about 200 workers have forcibly occupied the building from which they suffered a lay off from the Republic Doors and Windows Corporation after having been told no paychecks or severance will be payed because Bank of America is holding the money.
The American ideology has always accepted a large discrepancy in wealth and reward for workers versus management but not without turmoil nor limit. Henry Ford and Bill Gates are cultural heroes for founding new technology and institutions which created new jobs and wealth for the nation. For most of our history we have accepted the tenet first put forth by Adam Smith in his book, The Theory of Moral Sentiments, that people acting in their own interests within the confines of society can have an effect for the public good.
The relationship between worker and management in the United States has not always been peaceful. Previously in our history during tough economic times when there was a perceived indifference or excess of the management class significant violence has occurred. Out of these difficult times, the American labor movement was born which recognized that American workers had basic rights to negotiate for fair treatment and payment from their employers.
Americans today are angry at corporate America. They are seeing billions of dollars going to white collar Wall Street and executives receiving millions in golden parachutes. Despite a few discussions by politicians of potential arrest and prosecution of the criminal white collar crime by executives nothing has really happened. Almost everyone in America realizes that American automakers are kaput but many do not want to see the American autoworker suffer for the failures of the corporate executives.
The Chicago sit-in may well be just be the pre-eruption smoke of a volcano of American worker sentiment getting ready to erupt in the next few months. Almost no recognized economist can say when the current economic crisis will start to improve or even stabilize and we are beginning to hear many of them talk about the fact that the Great Depression lasted 10 years.
At the same time that employees of Republican Door and Windows can not get their paychecks, the CEO of Merrill Lynch, John Thain, which was bought up by Bank of America is demanding a 10 million dollar bonus this year in addition to his 800,000 dollar salary. This is a prime example of what is the greatest threat to our economic system, the outright criminal and selfish greed that now pervades America’s upper level corporate executives.
More than 30 years ago America’s great business schools which produced the current generation of American CEO’s promised to teach business ethnics and corporate responsibility to their students. Business used to be about productivity, margin, and efficiency not about stock options and bonuses. Our current economic crisis is absolutely attributable to selfish decisions made by American CEOs in the major industries of finance, energy, and manufacturing.
There are many who are calling for a change in our corporate system and make no mistake some change must be made as the current system is unacceptable. Some are calling for severe government oversight or even significant government ownership in strategically important entities. Conservatives rightly oppose these measures as being in conflict with the concept of private enterprise but they cannot accept the status quo.
Conservatives should advocate changes in the corporate and personal income tax structure to reward or punish CEO behavior. In return for a significant potential high reward for leadership, America’s executives must also accept reasonable risk and responsibility. In addition to tax penalties there needs to be increased prosecution,legislation, and enforcement of white collar criminal behavior of executives acting in their own interests against their corporation’s interest. Strict accountability standards for American CEO’s is the only way we will be able to maintain the American form of capitalism and avoid the coming worker unrest.
Tony Magaña grew up in McAllen Texas, attended Texas A&M University, served as an officer in Army Reserve, and holds a doctorate from Harvard University. The co-founder of Contempo Magazine has participated in Valley business for over 20 years.He is a member of the National Association of Hispanic Journalists.
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