American workers are getting fleeced and they know it, writes Les Leopold.
University of Pennsylvania professors, grad students and other workers rallied on April 17, 2024, to show support for all campus unions. (Joe Piette, Flickr, CC BY-NC-SA 2.0)
There comes a time in the history of a nation when extreme inequality turns into pillage. If economic power is concentrated so is political power, and the wealthy are able to do whatever they damn well please. They can lie, cheat, and steal because they know they won’t be held to account.
Have the super-rich now taken control of America’s political and economic systems? Some current news makes me worry.
Let’s start with the food industry, the food cartel that includes General Mills, PepsiCo, and Tyson, which has been jacking up prices non-stop since 2020. Why are food prices up 25 percent since then?
These giants blame supply chains, the rising costs of labor, and the rising prices of other inputs required to produce and distribute their products. It’s not their fault, they say. But the real culprit, upon closer examination, is stock buybacks, another word for stock manipulation. These firms are fleecing shoppers by raising prices and then using the cash to buy back their own stocks, thereby increasing the market value of each share.
Stock buybacks do not increase the value of a company, but they move money effortlessly to the largest Wall Street shareowners and to a company’s top executives, who receive most of their compensation via stock incentives.
As food prices shot up by 25 percent, “the ten largest grocery and restaurant brands have together returned or pledged to return more than $77 billion to shareholders,” reports Veronica Riccobene in her excellent article “Big Food, Big Profits, Big Lies.”
In related news, California fast-food giants have claimed that the state’s 2023 minimum wage law, which raised wages from $16 to $20 per hour, killed 10,000 jobs. A closer look, picked up by the Los Angeles Times, showed that the industry cooked the numbers by comparing employment in September with December.
But every year, September is within the peak dining out season, and in December people dine out least. When adjusted for seasonal variation or compared with the employment levels exactly one year earlier (both standard ways of measuring employment levels) the number of jobs actually increased by 7,000 after the minimum wage law was enacted.
Fast food workers in St. Paul, Minnesota, on April 14, 2016, joined a nationwide walk out to press for $15 per hour minimum wage, paid sick days, and union rights. (Fibonacci Blue, Flickr)
Boeing recently crashed into the news again, when company CEO Dave Calhoun was roasted by a couple of congressional committees about its shoddy production processes. There were plenty of outraged performances, but none of the oh-so-self-righteous lawmakers had the cajónes to ask about the impact on safety of Boeing’s $61 billion in stock buybacks or about how Calhoun hauled in $30 million in stock incentives while Boeing lost $1.6 billion in 2023.
Is it possible that maybe, just maybe, Boeing financed those buybacks by laying off workers, moving work to lower-wage sub-contractors, and cutting safety corners? Radio silence from Congress. (See “Did Stock Buybacks Knock the Bolts Out of Boeing?”)
Then there’s the way Wall Street squeezes out new home buyers by gobbling up houses and turning them into rentals. (See “Wall Street to Working-Class Homebuyers: Fuggeddaboutdit!”)
Let’s not forget that John Deere recently announced moving jobs from the U.S. to Mexico while feasting on government contracts and, of course, using job cuts to finance stock buybacks.
U.S. Department of Agriculture Secretary Tom Vilsack, back to camera, with the United Auto Workers Local 450 strikers at the John Deere plant in Ankeny, Iowa, Oct. 20, 2021. (USDA/Lance Cheung)
Do we have to even mention how Big Pharma is charging us more than it does Canadians, or how health insurance companies collude to fix prices, or how giant hospital chains over-charge us with impunity?
They rip us off to feed their profits, which then gets shipped to the richest of the rich via stock buybacks. Of the $3 trillion in after tax U.S. corporate profits in 2022, about $1.31 trillion went to stock buybacks. In 1980 there were 13 U.S. billionaires. Now there are 748.
None of this is accidental. Stock buybacks were deregulated in 1982. That’s when Wall Street began its financial war on workers and got filthy rich. (See my new book for the gory details.)
Corporate Welfare
ExxonMobil global headquarters in Irving, Texas. (ExxonMobil, CC BY-SA 4.0, Wikimedia Commons)
Just hearing that phrase makes me nauseous because it’s a stark reminder of how feeble we are. Progressives have been complaining about government giveaways to large corporations at least since the 1970s and the practice has only grown worse.
I’ll bet you already know how bad it is. We taxpayers give the oil industry about $20 billion a year in subsidies while BP, Shell, Chevron, Exxon Mobile and TotalEnergies plow $104 billion in dividends and stock buybacks into the pockets of their shareholders (2022).
Wall Street may be getting as much as $800 million a day via the Federal Reserve, according to one report. I have yet to find a credible source that adds it all up. I’m guessing it’s well over a trillion dollars a year in direct subsidies, tax breaks, and financial market supports. To rub it in, the richest corporations have successfully lobbied for so many tax loopholes that they pay little or nothing at all. (See here and here.)
“But wait,” they tell us, “Tax cuts and subsidies create jobs.”
That’s the biggest and most painful lie of all. Since the deregulation of Wall Street, corporations have been on a job killing spree. Stock buybacks are financed with job cuts. More than 30 million of us have suffered through mass layoffs (defined as 50 or more workers let go at one time) since 1996. Kill the jobs, save some money, buy back your stocks, put the money in your pocket, rinse and repeat.
Working Class Revolt?
Welders in Montana at the ADF International, Inc. facility fabricating structural steel elements for a dock project, July 2021. (ADF International, Inc., Washington State Dept of Transportation, Flickr, CC BY-NC-ND 2.0)
We’re nowhere near any kind of organized mass uprising. But American workers are not stupid. They may not be able to spell out in detail how they are getting ripped off, but they know it’s happening. Most importantly, they understand that the government works for the rich and not for them.
That’s why so many are willing to support train-wrecking outsiders who attack the government, even when they are anti-worker billionaire buffoons. In 1964, 77 percent of Americans had trust in the federal government. Now it’s 16 percent.
We’re living with the results of the collapse of countervailing working-class power. In 1955, 35 percent of the private sector workers were in labor unions. Today it’s only 6 percent. That means there is no organized mass of working-class folks with enough power to stop corporate looting.
I hate to be alarmist, but we’re really in bad shape and it is likely to get worse. Power is so tilted towards the rich that more and more people are giving up on politics, leaving the field open to the modern-day robber barons. This corrupt environment is a petri dish for conspiracy theories and hate.
Somehow, somewhere, a new working-class movement has to emerge. I’ve been begging progressive labor leaders to start a new organization that would fight against mass layoffs and for workers who are not in unions. (How about Workers United for Justice?)
While labor unions must organize shop by shop, they should also acknowledge that labor law is so tilted against workers, that it will be very difficult to make major inroads into the 94 percent with no union protection. We need a new parallel path to connect with these workers that doesn’t involve years and years of costly combat within a rigged labor law system.
Victims of mass layoffs are everywhere. They need a voice. They need an organization that will fight for them. If leaders like Shawn Fain of the United Auto Workers (UAW) and Sara Nelson from the Association of Flight Attendants-CWA (AFA) reached out to non-union workers who are getting crushed by Wall Street stock buybacks, those workers just might come running.
Until we rebuild large scale working-class power, it’s going to be a very rough ride. If we have learned anything at all since 1980, it’s that greed begets greed. The super-rich always want more and they’re not shy about grabbing it, even if democracy crumbles all around them — and us.
Les Leopold is the executive director of the Labor Institute and author of the new book, Wall Street’s War on Workers: How Mass Layoffs and Greed Are Destroying the Working Class and What to Do About It. (2024). Read more of his work on his substack here.
Views expressed in this article and may or may not reflect those of Consortium News.
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They can only get away with it for so long. History repeats itself and tells us that eventually the people will revolt. That time is fast approaching in the US, and no amount of heavy duty weaponry given to police and state militaries will stop them when they do.
It will be a bloodbath, as it will in Europe when the same happens there.
Our civilization is plunder based since the Viking and Roman Empire turned religious empire days for the Valhalla of permanent wars where it is the war that wakes up to fight again the next day. R2P right to profit all across the planet
That is deficit war spending that requires world investors to back us with the maximized profits.
Deregulation and maximized profit is since Vietnam the the Reagan reactionary rebuild of the MIC and destruction of progressive rule is dragging human civilization down. The middle class youth finally get into college without ruling calls status. The reaction to being conned into war fodder once the lottery kicked in meant all middle class and middle manager had to go.
Human civilization cannot survive 20th century addiction to wars for profits using the military in demolition derbies for corporate rebuilding rights after the people have fled into exile.
I have Les Leopold’s book //Wall Street’s War on Workers// and I urge everyone to read it! What he writes about are not just opinions–his points are backed up by a tremendous amount of research and solid statistics.
He’s begging the U.S. Dem Party to use the fact of mass layoffs that fund stock manipulation and personal gain for CEOs as a campaign issue. Not only is this practice grossly unfair and was illegal until 1982, but it would tear a hole in the false populism of right wingers who have no real concern for the working class. The response of the Ds?
I think it’s likely more than the suspect corporate donations to Ds. On the nice liberal sites where people think Joe is a good guy doing what he can under difficult circumstances, repeatedly I’ve asked them to explain why the D party has been neoliberal for decades; supporting an econ system destroying ecosystems and human lives. And currently why the Biden state dept. is run by neocons? So if they are okay with that, then why? Never an answer except for deflections, ad hominems, straw man arguments.
IMHO they don’t want to look closely, want desperately to believe the Ds are always the good guys. The denial is intense. Otherwise information like that Les Leopold has provided would be taken up as a just cause.
Related to the D supporters’ denial is a often cited rationale that the working class, especially white men are, as in H. Clinton’s words, “a basket of deplorables.” So then they deserve neglect. Never mind the connection between Rust Belt unemployment and deaths of despair. However, Les Leopold’s book has the stats on how inaccurate this prejudice is–stats showing the depth of support for LGBT issues and the steep drop over decades of racist attitudes.
“Have the super-rich now taken control of America’s political and economic systems? Some current news makes me worry.”
You are writing this today? Seriously, this could have been written decades ago.
To quote Caitlin Johnstone:
“It’s so obvious at this point that the US is being run by unelected empire managers who throw up half-dead, half-brained presidential candidates to trick Americans into thinking they live in a democracy. Those empire managers are going to do whatever they want to you regardless of how you and your compatriots vote. Your electoral system is a fake plastic toy they give you to play with so you won’t interfere with the gears of the imperial machine.
There are no answers in electoral politics. Start looking for answers elsewhere.”
Caitlin tells it like it is. Also, George Carlin told us as well.
Corporations need to lose their 14th Amendment Supreme Court privileges. It is about time that Corporations come under control and Foundations lose status.
Move to Amend
Great Article.
As long as we have people like you to tell us, the only thing we have to do is read.
The People will be along presently no doubt.
Great article. I didn’t know it was that bad, depressing. But you can’t fix a problem if you don’t know what it is.
Here’s a great video, Terrence explains it pretty well.
h**ps://www.youtube.com/watch?v=AeG7IrQ-_og
We need new ideas. I remember a video of Richard Feynman telling a story about getting to the end of one of his physics texts, and it said “New ideas are required”
I thought to myself; what is it like to be there. And I know some of you are there. I’m putting my money on an as yet unknown Political Philosopher.
But it’s looking like just plain old violence and greed are turning for the home stretch.
Even fairly small inequalities involve pillage–small by recent standards, at any rate. The planet and its resources are by nature a Commons, whatever (dis)agreements humans get up to about it.
Even inequality that does not involve absolute poverty destroys societies, as has been investigated at length by Richard Wilkinson (search “How Economic Inequality Harms Societies TED” for the basic explanation in just over 15 minutes).
Enabled to retain and deploy lesser plunder, our wealthy seek greater. The system creates social-level psychopathy even where individual psychopathy is not distinct. It starts by mass-producing initial trauma, demonstrates and rewards misanthropy, then sends its crazy forth with the tools and infrastructure to bleed people.
When the much needed economic populism of the American working masses inevitably arises (I cannot wait), we can’t be too hasty to condemn the more nationalist nativist elements of that populism.
Workers have a voice in the Socialist Equality Party, publishers of the World Socialist Web Site since 1998. We are running Joseph Kishore and Jerry White for President and Vice President in the 2024 election. Unless and until working class people stop supporting the Democrats and other reformist parties, the situation will only continue on its downward spiral towards chaos and crash. Capitalism cannot be reformed. Rosa Luxemburg put the key question to us a century ago: “Reform or Revolution?” That is the bottom line, people. The foolish people who keep voting Democratic Party warmongers and criminals into office are responsible for the mess we’re in. Donald Trump did not suddenly appear by magic. The failure of people who call themselves “progressive” to see the light and support socialist revolution is pathological and has made the likes of Trump, Biden, Blinken and the rest possible. Unless this mass stupidity comes to an end, our own end will be swift.