You’ve suggested a brilliant and very, very revealing question to ask Marti Rosenberg, David Segal, Bob Walsh and all the other far left types who support living wage legislation in Rhode Island: “Why shouldn’t we set it at $25,000 per year?”
I can’t wait to watch them struggle with that one. Simplicity at its best.

A couple of points.
The ‘free market’ is a myth trotted out to justify Social Darwinism. It has never existed. In the late 19 Century, the Senate was known as “The Millionaire’s Club.” Senators were appointed rather than elected. By controlling the Senate, business interests were able to create a favorable climate that prohibited unions, ensured high protective tariffs, and saw that gov’t paid for 60% of the railroads that were built. Not exactly a non-interventionist system, is it?
Then, in the 1950s, the Interstate Highway system benefitted the auto companies at the expense of the railroads. Again, an interventionist action, not the ‘market’ rendering its rational decision.
The class war is alive and well. But, somehow, it’s bad manners to point this out, unless you are part of the moneyed interest. Median income is down over the past few years, even as mean income is up. That shows that conditions are skewed towards the high end. That is, the rich get richer, while the bottom 50% sink. That sounds like a pretty fair definintion of ‘class warfare’ to me.
And the shift to the non-unionized service industries from unionized manufacturing industries usually means a shift-a big one- downward in wages. People working in retail, at restaurants, or as nannies don’t make $60k a year. Stores & bars are much harder to unionize than factories since the ratio of management to employees is much less favorable to the organizers.
And the creation of the American middle class after WWII was the result of an activist, interventionist gov’t. The gov’t redistributed wealth downward through programs like the GI Bill, and a favorable regulatory climate allowed the creation of unions. The combination of these things lifted millions of people into the middle class. This then created a true mass market for consumer goods, which created more wealth, etc.
Four people making $50k will spend more money than 1 person making $200k. Which is better at creating wealth? Money circulating? Or invested? The price of a stock probably won’t go up if there is no one to buy that company’s product.
So redistribution of income downward benefits everyone. Redistribution upward benefits a few. Like the latest tax break.
So, please, spare us the free market nonsense. Not when about about half of the growth in GDP over the last few years is due to gov’t spending: think defense contractors, no-bid contracts for Haliburton and other connected industries…have you been following the Duke Cunningham scandal? It was all about Repubs directing defense contracts to their buddies, or their paymasters. Doesn’t sound like a free market to me.
Go read Kevin Phillips “Wealth and Democracy” and you’ll see the connection between having gov’t connections and getting rich, from the time of the Revolution until now. And remember Mr Phillips started off as a Republican.
So, please. The class war is alive and well, and the upper class is waging it. And winning. Someone needs to look out for the average guy. With a few exceptions, business sure won’t.

Overthrow the teachers’ unions? That’s all we have to do? Wow, I’d like to live in your world where life is so simple.
Unions are declining because the milieu in which they thrived–factories–is declining. I don’t have the percentages, but a large portion of union jobs were industrial, and the industrial base has been shrinking for the last 2 decades. Add hostile gov’t actions–PATCO–and the conditions that fostered unions don’t exist any more.
Second, yes, closed shop regulations made ‘unwilling’ workers join the union. However, those same workers greatly benefitted from the union negotiations, so it was unfair not to support union activities through dues, etc.
Third, yes, the unions want to take wages out of competition. But that’s what companies do every day. What happens when a Wal-Mart (the other favorite bogeyman) comes into an area? The competing stores go out of business because they can’t compete with Wal-Mart’s prices. Then, with no competion, Wal-Mart is able to drive wages down. Maybe it didn’t happen in Johnstown, or Warwick, but look at the effect it has in smaller towns. It’s no accident that Wal-Mart came to larger cities and the Northeast recently. They milked the smaller places first.
A union stands between the average worker and big business. Be real-the average guy stands no chance against his/her employer. And, yes, you are free to go elsewhere, but when median wage is falling in real terms, that doesn’t leave much real choice. In any negotiation, when one side has all the power, there is no effective negotiation. Now you’re going to bring up getting retrained, etc. Let’s face it: not everyone can be a brain surgeon. And five years ago computer programming was seen as the answer. Not any more. What has happened is that the ‘star’ system (used so effectively at Enron) has driven up the price for a few high performers while the wage for everyone else has dropped. Hence, increasing mean, decreasing median.
The free market did not create the middle class without gov’t intervention. Unions drove up wages, which increased the number of consumers. What was the difference between the US in 1920 and 1950? Highly industrialized in both instances, but the wages were proportionately higher in 1950, and higher still in 1960 and 1970. More people with more money to buy more products. 4 people making $50k a year spend more money than 1 person making $200k, and consumer spending–not investments–make up about 2/3 of GDP. Want to increase GDP? Give more people more money to spend.
Yes there are Pell Grants. However, the cost of college has increased almost exponentially while the amount of aid available has not kept up. The median income of the bottom 10% of the population has gone up by 34% between 1967-2001. The top 5% saw its median income almost double. In 1967, the bottom tenth made about 9% of what the top 95% made; in 2001, the percentage had dropped to 7%. In the same time, a year at a state college went from about 30% of the annual wage of the bottom 10% to about twice the annual wage. The bottom is not keeping up because the mechanisms raising their income are broken.
Henry Ford was rabidly anti-communist, but he figured out that it was to his benefit to pay his workers enough to buy his products. That is, he created a whole new group of consumers; unions continued and expanded on that process. The result was a growing middle class. It wasn’t businesses bidding up wages; businesses were forced to raise wages by union activity.
And the reason teachers’ wages are becoming such an issue is because median incomes falling. Certain professions are more or less immune to productivity gains. Doctors, teachers, plumbers, athletes, musicians, actors can’t benefit from productivity gains made by office or retail workers. So, their salaries have all increased much more than the average. However, since meidan income has stagnated, the increases in teachers wages hurt taxpayers very directly. But so does a trip to Fenway. But teachers are a necessity, and baseball players aren’t. So drive up median income, and teachers wages wouldn’t seem so onerous.
Oh, and check the percentages spent on the welfare state. At the federal level, it’s in the single digits. The military takes up several times more of the fed budget. And most of the cost of state budget is personnel, which is true in any business. And do you have any problems with corporate welfare? I love it how the same people who crow about the free market come to the gov’t looking for handouts. Prov Place wouldn’t have gotten built without the state outlay and tax breaks. Not exactly “laissez-faire” there, is it? The whole ‘welfare queen’ who sucks up all of your tax money is a stereotype from the 1980s. It’s way out of date.
Also, your 40% tax burden is total tax burden, which is FICA, disability, and the like. And, interesting that someone making the median income who derives all income from wages (i.e. “works for a living”) has a higher tax rate than someone who derives all income from dividends (i.e. “the idle rich.”) Sure seems fair to me.

OK, one at a time.
Middle class income did not peak coincident with max union density because it took a couple of decades for the very real union effect to work its way through the system. Wages did not go from minimal to middle class in one fell swoop. Contracts negotiated over the course of 20 years kept raising wages.
OK, can’t fully address RI econ history. Not from the area. However, it seems that RI did not have the heavy industry where high union wages were prevalent. Think cars and steel. Textiles is the first stage of industrialization, and it was one of the first to flee to the south to avoid unionization. However, I can’t speak to the timing.
As for teachers’ performance, you missed my point about productivity growth. An office worker can accomplish much more in 8 hrs than 20 years ago. A school day is a school day. The professions I mentioned are time-intensive; these professions are not producing widgets. Whether the unions would allow it is irrelevant, unless you can come up with a way to allow teachers to teach the same amount of info in two hours that they taught in 6 hours in 1970. That is the analogy.
Windfall profits on universities. 1) Straw man; 2) see answer above. Another time-intensive situation. A class hour is a class hour. You need to speed up the receptivity of the human brain, so we can absorb more than the couple of 100 (or whatever it is) words per minute that we can now absorb.
FICA is welfare? Whatever. I can’t argue with a statement like that. It’s pure ideology. But, even if it is, poverty among seniors has plummeted in the past 40 years How is that a bad thing?
While you’re at it, go take a look at this website:
http://www.oah.org/pubs/magazine/greatdepression/stevens-fogel-photos.html.
Especially the last photo, called “Christmas Dinner.” Rather than put people through that, I’ll put up with a little welfare for the elderly. And before you get into how they should be saving their own money, have you ever tried to live on $18k per year? So what are we supposed to do with the elderly who have worked all their lives but haven’t been able to save? Are they just out of luck?
Right, the unwed mothers. Well, case closed, you say. Glad to hear that you’re willing to discuss this.
Look, all I can say is that I hope you have a good job with good benefits, and that you’re never unfortunate enough to lose either. Even with these, you are one bad break away from poverty. Unless you come from money. Guess it’s my bad planning that I didn’t pick my family more effectively.
The middle class pays most of the taxes? That’s funny. When people complain that the wealthy benefit the most from tax cuts, Rush & his ilk always claim that the wealthy pay most of the taxes, so they’re entitled to most of the tax cut. Which is it?
And the inference from your “point” about the supposedly progressive tax rates is that you oppose the Bush tax cuts, previous and coming, and the tax cut for the high-end earners just passed by the RI House? Have to agree with you.
Because the rich do have most of the money. The top 10% of households own 65% of all assets. So I agree with you that we need to make income taxes more progressive by raising the top marginal rates. The top 10% should be paying 65% of all the taxes. Sounds fair.
My point is that concentrating wealth in the hands of an ever-smaller group is an economic disaster waiting to happen. We did that once. We got the Depression.

Klaus,
Pretty obvious you’re not from these parts. If you were, you’d realize that RI has what — the second highest unionization rate in the country? Unfortunately, the outcomes we who live here observe all around us don’t match the predictions of your theory.
Also, on your point about doctors and productivity, you are way, way off base. One of the great challenges we face is to raise the productivity level of America’s health care system. For example, here in RI we are voting on a bond issue this year to finance a statewide healthcare IT system; Lifespan is at the forefront of using IT in hospitals, and over half the state’s physicians have just agreed to use electronic patient records. All of these moves are, in essence, an attempt to have RI match the dramatic improvements in efficiency and patient outcomes achieved by the Veterans Administration in their hospital system through a similar application of technology and complementary organizational changes in recent years. The idea that you cannot improve productivity in healthcare is simply wrong.

My “theory”? Guys, come on. Read a bit. Do some research. It’s not “theory”. When a factory worker without a college degree can make more than a teacher, or some mid-level corporate types, that’s not theory. I saw it. The wage scales I’m familiar with are out-of-date, so I can’t give you hard dollar amounts, but what the average factory worker made would have to be in the $50-$60k range today. And we’re talking about whole medium-sized cities being supported by factory wages. At one point, GM had upwards of 700,000 people on the payroll, and that’s not counting Chrysler and Ford. And Bethlehem Steel. And Boeing. And a whole lot of other places.
“Theory”?
And John, please forgive the inclusion of doctors. Yes, medical care can be made more productive, but I doubt a real physical exam takes a whole lot less time that it did 30 years ago. But regardles, take doctors out of the list, and you’re still left with a lot of time-intensive professions.
And interesting that Tom only mentioned the Dem millionaires in the Senate. Let’s see, what about…Lincoln Chafee?
And whether I’m from around here is irrelevant. Or maybe it’s a benefit. RI is a beautiful place, but it has what, 1 million people? I doubt it’s particularly representative of the country as a whole. So if you’re generalizing about the whole country from RI, I think you’re apt to draw some skewed conclusions.
And funny John should mention the VA as an example of medical efficiency. It is, pretty much, real socialized medicine. The doctors work for the gov’t.
So, we’ve got Tom saying that the rich should be taxed more, and John saying that socialized medicine offers a model of efficiency and achievement.
Interesting post.

OK, this is what seems to be happening:
I am writing you detailed narratives, with facts and figures; in response, you pick out certain sections and try to make it appear that my entire line of reasoning is invalid based on some sort of quibble over a term.
Secondly, I’m frankly astonished that you seem to believe that the effects of unionization are some sort of moonbat conspiracy theory. To this, all I can say is that you don’t have to take my word for it. Read some US History, econ history, social history, whatever history of the period. And, by “history” I mean legitimate, scholarly history, and not some popularized version written with an agenda. Better yet, go to the library, read some contemporary news accounts. Better yet, get out of RI and talk to some old-timers. They’ll tell you.
Third, wages are a lagging indicator. They increase over time (see my response to John; I won’t repeat it). It took decades for wages to increase. As they did, union wages put upward pressure on other employers. In the meantime, workers with higher incomes spent more money, which distributed wealth to more people, who in turn spent more money, and so on in a virtuous cycle. It’s called “economic expansion.” Prime the pump by putting real money into the hands of a lot of people and the economy grows.
That’s the fallacy of supply side: don’t matter how much you produce if no one has any money to buy it. Cross ref: see “Depression, Great.”
Fourth, while I am trying to present conclusions based on evidence gleaned from what I have read, it seems like you are working from ideology. “Case closed” when discussing AFDC and all of the unwed mothers sucking off the public teat. Referring to taxes as “gov’t sanctioned robbery” and claiming that this is the road to “serfdom” when you’re not at all clear on what serfdom is, how it originated, or what it actually means or meant.
Taxes are the price we pay for living in society. If you want roads, sewers, schools, courts, a military, these have to be paid for. We all benefit from the protections offered by law. Those who benefit the most, should pay the most. Seems fair to me, especially when their “leftovers” are more than I’ll ever see. For example, that $42k that millionaires will be getting as a tax break is a pretty substantial chunk of what I’ll make this year.
It comes down to a choice: do you want to live in a society where it’s every man for himself, and the devil take the hindmost? Or do you want to live in a society that takes care of its weaker members?
If the former, you really need to read some more history. The idea of “every man for himself” pretty much describes the conditions known throughout virtually all recorded history. That was the revolution of the 20th Century: society would take care of its members. Otherwise, what you got was a concentration of wealth in a very few hands, and the rest of the population wass on its own.
Except, the problem with that is that people who have money have a tremendous advantage over people who don’t. Ever read Thucydides? The Melian Dialogue? There is a line that “the strong do what they can; the weak suffer what they must.” In essence, he’s saying that might makes right. And, let’s face it, money is power. Without some ameliorating force, money will prey on those without. If you doubt that, I advise you to go read some more history. Any period, any country prior to the 20th Century and this is what you will find.
Personally, I do not want to live in that kind of society. In fact, it’s not a society at all. Rather, there is a cabal of rich living behind gated walls and everyone else is fighting over the scraps that have trickled down.
Conservatives used to claim that they were so hard-headed, while liberals were all mushy in their thinking. I think that’s changed. Conservatives want to go back to some golden age when slackers had to pull their weight because of they were afraid of starving. The reality is that we tried it your way. It was horrible. People did starve, and through no fault of their own. Poverty is not a moral defect. And you can call me overly cynical, but read the history and you’ll see that I’m being very realistic.
Money, power, and privilege concentrate, and “the strong prey on the weak” (more Thucydides) unless something stops it. The mass of the population can do this, if some form of gov’t prevents it.
Ever read about factory conditions in the 1890s? Do so. Child labor. 60-80 hour work weeks. No breaks. Meager pay. People out of work for chunks of the year with no safety net. Why did that change? Because business was forced to change, first by the Progressive Movement, then through unions. Oh, and read about the Pinkertons and their role as strikebreakers if you want to discuss might = right.
Did you look at that picture? “Christmas Dinner”? Here’s the link again.
http://www.oah.org/pubs/magazine/greatdepression/stevens-fogel-photos.html
This is black-and-white proof of what can happen if we dismantle the social safety net that you so perjoratively call welfare. It’s a pic of farm kids in Iowa; not exactly slackers or welfare queens, but hard workers who busted their humps but couldn’t make it work. And that can happen, even today. Ever try to live on $18k a year? That’s about $8/hr. Do the math: take out for rent, food, and transport and see what you’re left with. Then try to save.
Oh–the privatized Social Security system you espouse. What happens if you have the bad luck to live in a period like 1966-1981, when the Dow went up by a grand 1 point? Man, are you SOL. The stock market does not always go up. The supposedly “automatic” 7% a year is an historical average. But, you know what? 3-4% was based on dividends, not capital appreciation. How many companies pay a 3% dividend now? Answer: very, very few, which means you are counting on cap appreciation. That’s not investing; that’s gambling.
Like I said: I hope you never lose your job or get really sick because then you’ll see the fruits of what you try to sow.
And, in addition to Thucydides, read Ezra and Nehemiah in the Old Testament. The basis of both is how the rich were exploiting the poor, and how this was such a heinous offense in the eyes of God. Man, what a bunch of commies!
And serfdom came about because the local strong man could coerce the peasants to support him. It happened because there was no central gov’t (as in Empire, Roman) to stop it. Hence, it came about as a result of a LACK of taxes, not as a result of too many.
I like living in a society that cares for all its members. Oh–remember the possibly spurious interview that Grover Norquist gave? Where he said he couldn’t wait until all the “Greatest Generation” died off? He called them “unamerican” because they colluded in the creation of the welfare state. You know why they did? Because they remembered how horrible it was before the New Deal. It’s not an accident that this whold “gov’t is bad” movment has come about as the generation that lived through the Depression is dying off.
But you know what, I don’t have time to educate you. Take the initiative. Read some history.

Klaus:
Take the initiative. Visit Rhode Island. We spend proportionately more than almost every other state on social welfare programs. Why? Because our benefits are the most generous (across cash assistance, subsidized daycare, free health insurance, etc) and people stay on them here longer than in any other state. Oh, yes, and because our rate of fraud is very high. The lowest estimate is $14 million annually, and our Democratic Attorney General has noted it could be much, much higher. Even if we conservatively just double it, that makes welfare fraud in RI equal to what we as a state spend each year on school books and other instructional materials. And what has all this wonderful spending brought us? Not a booming economy. Rather, we have the 4th highest tax burden in the country, and the absolute worst one if you are retired or affluent. Our Latino population is up 13%in the last four years, and they now have the lowest median income in the nation. Wonder why they’re coming here? Oh, yes, and we now rank just above Mississippi and Louisiana (but no other state) in the percent of children not living in a married couple family. And our child poverty rates are, as a result, skyrocketing. Sounds like a real paradise, doesn’t it? This is what your theories look like in the real world. Why don’t you move here and enjoy the results with the rest of us? Talk like yours is cheap, my friend.