Trump Republican Support Base: Construction Firm Owners

Construction firm owners throughout the US are unified in their appreciation for Trump-led policies like diminished corporate income taxation (down to 21%), the removal of labor protections like the Fair Pay and Safe Workplaces Act, and federal infrastructure investment. Despite regionalized labor strategies, they are committed to maintaining their solidarity as owners along with their support for Trump Republicanism.

The US construction labor market has been developed so that it cannot be sustained without sub-socially-average wages. Thus, construction labor wages and markets are tiered in two different regionalized ways in the US.

In deunionized US regions, construction firm owners depend on imported labor from global regions with lower social reproduction costs. 25% of the US’s construction labor are immigrants or migrants. With not only reduced rights, but also the complete absence of state rights protection, these workers are highly vulnerable to wage theft and inhumane working conditions, which class predation is institutionalized and normalized in anti-union regions. Latino workers are at higher risk of on-the-job fatalities than other workers, according to a recent report from the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), and 67% of Latino workers killed on the job are immigrants. In 2016, 991 construction workers were killed, which was the highest number of any sector.

Firmly in real estate capitalist Trump’s political coalition, construction firm owners in unionized construction regions are not directly, negatively impacted by anti-immigration policy. For flexible, cheap labor, construction firm owners in unionized economies, like New York, use high school graduates, women, and veterans in apprenticeship programs. Their second option for obtaining cheap, flexible construction labor is importing construction labor from deunionized US regions, as North Dakota did to build oil fracking infrastructure.

The democratic advantages of the union-region approach to below-market cost, flexible construction labor are that there is possibility for below-cost apprentice labor to eventually move into working at social reproduction cost. Depending on to what extent women are transitioning from apprenticeship to full-paid work, apprentice-based cheap labor may or may not eventually de-gender the construction labor market. The economic costs of the union-region apprenticeship system are socialized and spread over time: It requires public subsidy to firm owners for the employment of that cheap, flexible labor market, and it saddles those workers with apprentice backgrounds with lower lifetime earnings, which will suppress their consumption capacity and intergenerational social reproduction relative to workers paid at the socially-average wage.

However they are differentially-impacted by anti-immigration policy, they are unified by anti-immigrant, anti-worker, and pro-capitalist policies, and construction firm owners are able to prioritize owner solidarity.  Together they are calling for the expansion, to construction firms, of ag owners’ slaver exemptions from labor laws. US policy, rooted in the slaver-region institutions and relations that had to be maintained in the New Deal, exempts ag and domestic workers from state-protected citizenship rights, including civil rights, political rights, social citizenship rights, and human rights.

While expanding labor power resources, the New Deal also expanded slavers’ labor institutions across the agriculture-dominated regions, so that Southern Democrats were able to secure some of the slavery-expansion ambitions that the 1861-1865 Civil War foiled.

If such an exemption is granted, the current occupation of the US presidency, by real estate capital, may facilitate construction owners to further expand slavers’ labor institutions, shifting more weight in the US to the appropriation base of the capitalist economy.

It is for such reasons–opposition to slavery–that at the very least, the liberal-left should learn from all its regrets at repeatedly joining neoliberal intervention coalitions sold on behalf of the marginalized, including education privatization, managerializations and surveillance, and carceral expansion.

It is time to become politically literate to the fact that conservatism has an altruistic brand, and it has always been aestheticization and patronage of the marginalized, the exception. And yet, neoliberalization, the conservatization of liberalism, has not been, as it was philosophically marketed, a corrective to the excesses of egalitarianism. It offered us moral “sweeteners” for the marginalized, and diverted us from just egaliberte development.

Now here we are, with egaliberte at the vanishing point in the rearview mirror, with conservatism fully at the helm, and attempting to offer an expensive, wasteful, lame sweetener–a border wall–not for the margins, but symbolically for average people and materially, substantively for their construction bosses. This is what elitists call populism. It is time to consider the ways in which a contrasting egaliberte approach can alone humanize and liberate both average people and the exceptionally-dehumanized, at the cost of isolating those among the exceptionally-superhumanized who will not use their entitlements for democratic advancement–a cost which would be a benefit.

For construction trade news & analysis, see:


Distinguishing social democracy

Distinguishing social democracy:

Under left-liberal (as opposed to soc dem) regimes, organized labor does not participate in mid- to longer-range socio-economic planning. However, left think tanks can contribute mid- to long-range planning analyses.

Conversely, there are a variety of ways in which business leaders contribute to public policy formation, because business (public and private, but not cooperative) is regarded by the lib-left govt as the engine of growth.

This exclusion of cooperatives from the field of perceived contributors to growth indicates that lib-left govts may also be distinguished from social democratic govts by an assumption that growth is a product of “efficient” social-hierarchy-inflating organizational forms.

In lib-left regimes, labor views its role, and the liberal government views labor’s role as (often obstructive) ballast to economic growth initiatives that are seen as the natural concern of business. That’s labor’s negative role. It’s not a leadership role.

Labor’s positive role in capitalist democracy thus largely devolves to delivering votes to the left-liberal govt, because although the lib-left does not regard labor as a central social or economic policy resource, as opposed to conservative govts the lib-left govt will not actively try to break organized labor and it may implement those modest proposals of labor that do not impede the business-driven growth planning.

Hence, with a range of ruling (capitalist) political perspectives that always preemptively block information from labor (except what little leaks obliquely through the market), we repeatedly sink into crisis cycles–crisis of profit begets > capital deregulation and overmobilization, working class overregulation, demobilization, and dispossession beget > speculative bubbles/primitive accumulation beget > underconsumption crisis begets > further primitive accumulation, repeat. We fixate on the speculative bubbles moment in the midst of all this autistic failure, hoard wealth, and laud ourselves endlessly for being such top-notch managers and philanthropistes.

This is why for Rawlsianism to work, socialist politics and the communist horizon must be more highly valued, and even defended– by liberals.
As far as I know, this seeming impossibility has only been (temporarily) accomplished in Scandinavia and Minnesota. (While Latin America leftists tried to forge a left-lib coalition from scratch, the US destroyed this effort and enforced conservative rule in Latin America, see Greg Grandin.)

In “Right-wing Rawlsianism: A Critique” (forthcoming in Journal of Political Philosophy) Samuel Arnold argues that if liberals agree that agency is the essence of justice, then liberals have to pick which side they are on–because economic democracy fosters more agency than Trickledown provides.

Arnold’s is a clever detonation of a bridge from liberalism to conservatism, using some of the bridge-builders’ own ideal theory tools. (Particularly with respect to Rawls’ difference principle: A liberal justice-maximizing directive to choose the political-economic system that maximizes the least-advantaged group’s expectations for an index of primary goods that include income and wealth, but also status (qua capacity for agency in the workplace and self-respect in society).)

Upon deriving the optimal realization of liberal justice (agency) in workplace democracy, Arnold concludes (p. 32),

Milquetoast liberal egalitarianism is unstable: liberal egalitarianism must move far to the left in order to avoid being jerked far to the right.”

We need to keep heaping on the demonstrations that economic democracy fosters more agency than GDP/GNP tumescence.

For one example, insofar as political-economic systems can be said to have intentions, how plausible is it that capitalism does not intend to support social pathologies (Arnold, p.29)? Studies of primitive accumulation, the WEB DuBois tradition, socialist feminists, Harvey et al have a lot to say about how capitalism “intends to” (is built and maintained to) and does depend upon and support social pathologies. This approach apprehends the connection between economic (eg. workplace) tyranny and racism, sexism, colonialism, etc., for a powerpunch assertion that inequality is both fundamental to capitalism (even if it is shifted around across some social groups, over time and space) and fatally (from the perspective of justice) undermines agency (power to).

…& on the matter of historical-materialism’s putative incapacity to deal with difference (from a postmodern POV), from Arnold (p. 29):

Patriarchy, discrimination against the weak or the different, pressure to conform, and countless other social practices that prevent people from realizing their full agential potential: how long can these pathologies withstand the countervailing winds of a social democracy, with its democratic workplaces, its flattened division of labor, its robustly egalitarian public institutions?”

US Comparative Advantage for World’s Elite

I’m not the world’s biggest fan of Brad de Long; he’s a liberal, and he announces it, as when he reposts, in criticism of Occupy Seattle, Matthew Iglesias’ flat claim, using an opportunistically-myopic historical viewpoint, and a decidedly non-class disaggregated viewpoint, that capitalism is a boon to the world. Hell, Iglesias even goes so far as to assert that Africa has prospered under capitalism. It seems the economist right hand of liberalism is never in touch with the on-the-ground NGO/charity/anthropology/military left hand of liberalism. According to Iglesias, the only, really–technical, issue for these econ liberals is that the global elite has lied once too often to the American middle class. …I wonder why! Could it be that capitalism is not actually a boon to everyone, and Occupy Seattle’s analysis is in fact superior? Don’t say it’s so!

However, I do like to keep an eye on de Long, because a liberal will post some figures and occasionally even an analysis of utility to a marxist. Here in his post “A Note on the US Comparative Advantage in the Sale of Political Risk Insurance,” de Long briefly engages the problem of how the US comes by its trade deficit. He speculates that half of the trade deficit is basically the world elite’s insurance policy against revolution in their own countries, and he cites statistics from China. This global elite causes the US to financialize/militarize, and thereby innocently, inadvertently gut its own middle class.

Now I think that for much of the world’s elite, de Long’s attribution of motivation is correct. But for a number of reasons, it’s not correct with regard to the largest components of the strategy: Chinese and Indian elites. They are not buying dollars to the US’s profit because they are insuring against a bad  revolutionary turnout in their countries. They have another, perhaps longer-term strategy in mind, although, say Minqi Li and John Gulick, one that may be complicated by the historical decline in capitalism-fueling fossil fuels.

De Long also provides the EMRATIO:

Given this data, here‘s his Keynesian argument.

For the record, however, and in direct refutation of the romantic, churlish defenders of neoclassical economics and rabid liberals, the world would be a better place if the neoclassical economists and liberals were to some day develop humility in proportion to their achievements.

The US Model of Social Exclusion

Here is a link to Schmmitt & Zipperer’s “Is the US A Good Model for Reducing Social Exclusion in Europe?” (2006) CEPR.

Not so much, contend the authors, analyzing social exclusion through the variables of income inequality, poverty, education, health, crime and punishment, the labor market and finally, the coup de gras, social mobility.

The High Price of the WalMart Economy

“Wall-Mart’s Shocking Impact on the Lives of Hundreds of Millions of People”
April 28, 2011

By David Moberg
Reprinted from The American Prospect

Wal-Mart casts a global shadow across the lives of hundreds of millions of people, whether or not they ever enter a Supercenter. With $405 billion in sales in the last fiscal year, Wal-Mart is so big, and so obsessively focused on cost-cutting, that its actions shape our landscape, work, income distribution, consumption patterns, transport and communication, politics and culture, and the organization of industries from retail to manufacturing, from California to China.

Yet other paths are possible, and the company would not be so influential had the world not changed to enable its metastasized growth. Had unions been stronger, especially in the South, and more devoted to organizing the growing service sector, Wal-Mart might not have become such an obstacle to labor renewal. If antitrust enforcement had not been narrowed, Wal-Mart could never have grown as big as it did. There would be no such mega-stores if state governments had not repealed Depression-era fair-trade laws. And Wal-Mart’s push of American consumer — product manufacturing to China depended on a previously established political and technological foundation of pro-corporate globalization.

But it would be a mistake to say that Wal-Mart is merely following the new logic of retail competition, for Wal-Mart reinforces all dimensions of this emerging business climate. As Jennifer Stapleton, assistant director of the United Food and Commercial Workers’ project Making Change at Walmart, puts it, “They set the rules.”

Consider Ana Sanchez, a 45-year-old immigrant to Southern California from Mexico. Wal-Mart does not employ her but is in some sense her boss. Sanchez worked two years at a temp agency that staffed a large California warehouse. She was trying to put her three children through college in Oaxaca, Mexico, on pay that started at $6.75 an hour, then rose to $8, with no benefits. She retrieved cartons, put labels on products, then shrink-wrapped plastic around pallets to ship. Mainly, she shipped children’s clothing made in China to Wal-Mart.

The work was hard, fast, and stressful, with “constant pressure,” she says. “If I killed myself to make 2,000 labels one day, the next day, they’d give me 200 more. They kept raising the quota. It was very dangerous. And with every order from Wal-Mart, the supervisors would say there’s an urgency for us to do it. Managers would complain that the company was putting a lot of pressure on them.”

Rushing to wrap a pallet in April 2009, Sanchez fell and injured herself. Despite an unblemished work record, the agency fired her, supposedly for a paperwork error, but more likely — she believes — because she was hurt. Unable to find another job, she lives in a tiny room in a cousin’s house, making tamales to sell and looking for work. “I don’t want to go back to Mexico destroyed and a failure,” she says.

Zahir Chowdury (he asked not to use his real name) manages factories in Dhaka, Bangladesh, for an Asian multinational apparel manufacturer whose clients prominently include Wal-Mart. He admires Wal-Mart for setting “very structured, systematic” guidelines for everything from energy efficiency to treatment of workers. But now he worries that his prices are rising for inputs, such as cotton. His selling price has changed little over five years, but he hopes Wal-Mart will agree to pay more for finished garments, which is usually about 5 percent less than anyone else pays but for longer production runs.
It’s hard, however, to meet Wal-Mart’s standards at Wal-Mart’s price. That’s why the U.S.–based Worker Rights Consortium frequently uncovers major workers’ rights violations in the Bangladeshi (or Indian or Cambodian) factories of suppliers to Wal-Mart and other big retailers, despite their codes of conduct and monitors, says WRC Executive Director Scott Nova.

“Expectations on quality are up, also on managing logistics,” Chowdury says. “The lead time is squeezed. Getting fabric is difficult. Everything is getting squeezed,” including his workers. Though the new minimum wage is about $42 a month, he claims his company pays $90 a month because at anything much lower, workers “can’t survive.” He hopes someone will build power lines and roads into the countryside, so he can move the factory to an area where “every worker can survive at $70 to $80 a month,” and he could pay less. Would Wal-Mart one day just move some place cheaper? “Where will they move?” he asks.

In July 2007, Wal-Mart expanded its discount store into a new Supercenter, with full grocery service, in Galesburg, Illinois, a middling industrial and market town hard-hit by globalization. Todd Frakes, a life-long grocer, managed one of two Econofoods grocery stores in town when the Supercenter opened. “The first week, our sales were down about 40 percent,” he recalls. “Then in about six to eight weeks it evened out, to about 18 percent off.” They tried everything: deep discount sales (Wal-Mart beat them), special events (Nascar Day), better ads, playing up their hometown knowledge of their customers. They cut back hours to avoid layoffs. Just over a year later, the chain’s corporate managers closed the two stores. “The thing with Wal-Mart is they’re just huge,” Frakes says. “It’s hard to compete when they get stuff so cheap. It’s been really tough on Galesburg. We’ve lost a lot of mom-and-pop businesses.” One independent grocery, Hi-Lo, survives, and Frakes works there now.

“There’s been two of three factors that helped us,” Hi-Lo assistant manager Jeff Jefferson says. “The number of years we’ve been here in town and customer loyalty. We have fair prices and quality meat and produce. We’re never going to be the biggest, newest store, but we can be the friendliest, and we offer service. We still cut our own meat, and we still carry your groceries to the car.”

Such stories illustrate a few dimensions of “The Wal-Mart Effect,” as journalist Charles Fishman titled his book on the far-flung influence of Wal-Mart. Boosters of the company contend that every new store has just two relevant effects: First, it energizes the local economy; and, second, lower prices for local shoppers compensate for other negative effects.

The preponderance of research tells a different story. The net effect of Wal-Mart entering a local market is to reduce local employment, reduce area wage rates and total payroll (especially in retail), eliminate other businesses (especially small shops and small chain stores that directly compete with Wal-Mart), and raise poverty rates. University of California, Irvine, economist David Neumark and colleagues reported in a 2007 study that “on average, Wal-Mart store openings reduce retail employment by about 2.7 percent, implying that each Wal-Mart employee replaces about 1.4 employees in the rest of the retail sector.”

Wal-Mart knocks out many local businesses, economist Kenneth Stone discovered when he surveyed Iowa during the company’s first decade there starting in the 1980s. Between 1983 and 1993, Wal-Mart opened around 45 stores in Iowa. During that period, the state lost 555 grocery stores, 88 department stores, 298 hardware stores, 444 apparel shops, 293 building supply stores, and 511 other retail outlets — as much as 43 percent of some categories of retail stores. More recently, a team from Loyola University found that 82 out of 306 businesses within a four-mile radius of Chicago’s first Wal-Mart failed since the giant retailer opened in 2006, eliminating an estimated 300 jobs, roughly equaling the number of workers in the new Wal-Mart.

When Wal-Mart displaces local small businesses, it also typically reduces income and employment for local business — service providers, such as lawyers, bankers, accountants, printers, and newspaper publishers, since those services are centralized in Wal-Mart headquarters. Weakening small-business and professional networks further diminishes the community’s social capital, according to economists Stephan Goetz and Anil Rupasingha.

Wal-Mart’s dramatic transformation of warehousing and logistics has also increased efficiency significantly in both its own extensive operations and in third-party logistics companies with which it contracts. Wal-Mart often adopts early innovations like bar codes, then accelerates their use because its size influences industry standards. Productivity increases in the context of economic growth are generally good if the fruits of enhanced productivity are shared with workers — largely not true with Wal-Mart. Workers gain little because Wal-Mart zealously fights unionization of its own employees and its global system (including unionized dock workers), and its squeeze on suppliers and competitors increases incentives to resist unions.

Wal-Mart has also quite likely reduced U.S. employment throughout its extensive supply chain, despite suppliers’ expectation that they would hire more people as Wal-Mart sold more of their product. But there are stories, well documented by Fishman and others, of Wal-Mart’s virtual dismantling of iconic supplier firms such as Huffy (bicycles), Master Lock (padlocks), Lakewood Engineering & Manufacturing (fans), and L.R. Nelson (lawn sprinklers).

In each case, Wal-Mart kept demanding a lower price, at times challenging suppliers to match the price of cheap imports. The companies improved productivity, cut corners on quality, and pressured their own employees and suppliers (who in turn tightened the screws on down the line). But eventually, Wal-Mart pushed these suppliers out of the country to China, Mexico, and any other place that could match “the China price.”

From 1997 to 2004, Fishman reports, retail jobs grew more than half as fast as the population, and more than 70 percent of those new jobs were at Wal-Mart. During that period, 3.1 million manufacturing jobs disappeared, so that by 2003, more Americans were working in retail than in manufacturing. Simultaneously, Wal-Mart tripled its imports from China, importing in 2004 about 10 percent of all Chinese exports to the U.S. It seems likely that most of those imports were still nominally from hollowed-out American businesses. So Wal-Mart sped up both American deindustrialization and consolidation of a low-wage, bargain — driven consumer culture where quality and price were both cheapened.

It’s not even clear that the surviving, compliant suppliers have prospered. Two independent studies found that suppliers to Wal-Mart, especially smaller businesses, are likely to end up with lower profits than suppliers who service other big retailers. Beyond squeezing prices, Wal-Mart often “takes a bite” out of suppliers, delaying payments to them. But some suppliers, mainly large ones, may gain enough from Wal-Mart’s big orders to make increased profits despite the squeeze.

The Wal-Mart effect on wages is more clearly harmful to workers, whether they work for the company, its suppliers, or its competitors. A group of University of California, Berkeley, researchers led by Arindrajit Dube, found in 2007 “strong evidence that Wal-Mart entry reduced average and total retail earnings, retail wages, and health benefits for retail workers over [the 1990s] — primarily in urban areas.” The loss of 1.5 percent of earnings for all retailers in a county, plus lost health benefits, with the opening of each Wal-Mart came from substituting poorly paid workers for better paid workers and from Wal-Mart “driving down wages of competitors.”

On average, Dube reports, workers at large retailers make about 15 percent more than employees at Wal-Mart, which pays an average sales associate $8.81 an hour, according to market researcher IBISWorld.

The Berkeley researchers calculated that in 2000, the downward pressure on wages from Wal-Mart was costing retail workers nationally about $4.5 billion a year. Simply the threat that Wal-Mart Supercenters were coming to Southern California led unionized grocery chain managers in 2003 to unite in a lockout — imposed in response to a strike against one chain — against the United Food and Commercial Workers union. The conflict ended with concessions from workers, such as a two-tier wage schedule and provisions reducing insurance coverage. Three years later, only 54 percent of union grocery workers, down from 94 percent, had health insurance.

“Long term, anybody that continues to gain market share is going to be dominant,” says UFCW organizing director Patrick O’Neill. “It’s like the U.S. and the Third World. Either we take them up to our standard, or they’ll bring us down to theirs.”

But what about all the money consumers save shopping at Wal-Mart? Experts estimate that Wal-Mart’s prices run from about 5 percent to 25 percent below most competitors. Commissioned by Wal-Mart, IHS Global Insight calculated that the company’s lower prices saved U.S. consumers $365 billion in 2007 — about $1,200 per person or $3,100 per household. Such analysis led even some Democrats like Jason Furman, now economic adviser to President Barack Obama, to praise Wal-Mart as a boon to the poor. Although Furman advocates a higher minimum wage (as Wal-Mart does), he argues that even modestly higher Wal-Mart worker wages would eliminate the company’s profits or push up prices, thus implicitly hurting them.

But an Economic Policy Institute team of economists authoritatively criticized Global Insight’s methodology and judged its projected savings from shopping at Wal-Mart “implausible.” For example, EPI critics say, the Global Insight report credited Wal-Mart with reducing prices it does not affect, like other services that make up 60 percent of the consumer price index. In any case, the EPI economists argued, if the savings are as big as claimed, Wal-Mart could raise wages and keep prices low. The Berkeley group also concluded that a higher minimum wage for big-box retailers would help retail workers and result in only a tiny increase in retail prices.

Government at all levels also loses when Wal-Mart moves in, lowers pay, eliminates jobs, and pushes families into poverty: As a result, government ends up paying for their Medicaid, S-CHIP (children’s health insurance), food stamps, and other aid. Indeed, in many states, Wal-Mart employees lead the list of Medicaid beneficiaries and their children lead the S-CHIP rolls, because they cannot afford the company’s health plan. In 2004, the Democratic staff of the House Education and Workforce Committee calculated that a 200-employee Wal-Mart store could cost federal taxpayers $420,750 a year (more than $2,000 per employee).

But Wal-Mart’s spillover impact goes further. According to Good Jobs First, an economic-development research group, Wal-Mart has collected more than $1.2 billion in tax breaks and other subsidies from state and local governments (about $70 million annually). It uses gimmicks to avoid another $300 million a year in taxes (and created as a supposedly independent corporation to avoid collecting state sales taxes). The company systematically challenges all property-tax bills.

Beyond its economic impact, Wal-Mart is notorious for censoring the books and recordings it stocks, excluding some presumably for their progressive political leanings and demanding bowdlerized versions of others. As historian Bethany Moreton recounts in To Serve God and Wal-Mart, the company has promoted an amalgam of evangelical Christianity and free — market ideology in colleges and elsewhere and draws much of its management from this cultural milieu. More recently, it has ventured into electoral politics with large political donations, mobilization against politicians supporting the Employee Free Choice Act (including heavy-handed pressure on its own employees), and the promotion of its own version of “Wal-Mart Moms” as a key swing constituency (an implicit buffer against attacks of its treatment of employees).

Wal-Mart’s greatest clout comes simply from its size, which in another era would have provoked anti-trust action — as happened with A&P from 1915 to 1979, even though A&P, like Wal-Mart, grew big organically rather than by acquiring other firms. “Wal-Mart is a symptom of a true revolution in the regulation of the political economy,” says Barry Lynn, a fellow of the New America Foundation. Bigness itself can be a problem, and competition as much as efficiency should be our goal, he argues, especially since Wal-Mart’s efficient bigness creates a dangerous deflationary downward spiral of wages and prices. Wal-Mart is not, despite its size and influence on prices, a monopoly, but Lynn says it may often act as a monopsony — a company with anticompetitive influence as a buyer — meaning that Wal-Mart is able to exert substantial control over supplier companies and their prices by accounting for a quarter or more of their sales.

“Wal-Mart’s Slump Persists,” read a February Wall Street Journal headline, as same-store sales dropped for the seventh quarter in a row. But hold the tears: Overall sales and profits were up. Yet Wal-Mart must grow to make its model work — breaking into urban markets, new countries, new demographics (more upscale), new formats (more conversions to Supercenters and small, neighborhood stores), new products (more electronics), and new image (going beyond green). But as industry analyst Bill Dempsey of the UFCW puts it, “They don’t have an image problem. They have a reality problem.”

Even so, there are alternatives. After leaving a trail of bankruptcies and corporate consolidations in its wake, the undisputed shark of retail is being seriously nibbled by agile minnows — or maybe some halibuts. In groceries, Whole Foods and Trader Joe’s aim at higher price, quality, and service niches. Even though they are nonunion, they attempt to offer attractive work and competitive pay. Kroger — the most unionized of the three big merged grocery corporations — competes effectively with Wal-Mart in many markets by adapting to communities, creating a pleasant shopping experience, and holding prices fairly close to Wal-Mart’s levels.

Nobody literally goes head-to-head with Wal-Mart, but two companies with much better pay and benefits and less hostility to unions come close to such a face-off and are faring well. Costco, which originated on the West Coast and then went national, is a members-only warehouse club, like Wal-Mart’s struggling Sam’s Club. But according to IBISWorld, the average Sam’s Club cashier makes $9.48 an hour, and the average Costco cashier makes $15.50 an hour. A Costco worker also gets a substantial annual bonus, a 401(k) retirement plan, and health insurance, 90 percent of which is paid by the employer. The Sam’s Club cashier can buy insurance at work.

How does Costco do it? Low turnover of its trained, fairly satisfied, partly unionized, highly productive workers is one key element, says R.J. Hottovy, director of consumer research for Morningstar. The store draws a more affluent clientele than Wal-Mart, and there’s a limited stock (about 4,000 items compared to about 60,000 at a Supercenter) of often high-quality, heavily discounted products, including a successful house brand. Costco practices “creative merchandising” of products for which it drives a hard bargain, then takes no more than a 14 percent markup, leading to higher turnover of goods and double the value of sales per store of its competitors, according to IBISWorld.

Operating 189 stores in Michigan and some nearby states, Meijer is a widely respected, generous corporate citizen in many communities. Entirely unionized in Michigan, Meijer originated the one-stop shopping supercenter roughly 50 years ago. Now facing a challenge from Wal-Mart and other retailers, Meijer is experimenting with different sizes of stores, both bigger and smaller, and has promoted itself as eco-friendly, using some wind power and offering local “home grown” meat and produce. Meijer does not pay as well as Costco, but it beats Wal-Mart on vacations, holidays, pensions, insurance, and a voice at work.

Ultimately, it is possible to compete with Wal-Mart, offer good deals to customers, deal fairly with suppliers, pay workers decently, and even respect their right to organize. Better public policies and stronger unions would help. Maybe Wal-Martization is not the end of history after all.

On How to Have an Effective Democratic Education System

Reprinted from The New York Times, April 30, 2011

The High Cost of Low Teacher Salaries

WHEN we don’t get the results we want in our military endeavors, we don’t blame the soldiers. We don’t say, “It’s these lazy soldiers and their bloated benefits plans! That’s why we haven’t done better in Afghanistan!” No, if the results aren’t there, we blame the planners. We blame the generals, the secretary of defense, the Joint Chiefs of Staff. No one contemplates blaming the men and women fighting every day in the trenches for little pay and scant recognition.

And yet in education we do just that. When we don’t like the way our students score on international standardized tests, we blame the teachers. When we don’t like the way particular schools perform, we blame the teachers and restrict their resources. Compare this with our approach to our military: when results on the ground are not what we hoped, we think of ways to better support soldiers. We try to give them better tools, better weapons, better protection, better training. And when recruiting is down, we offer incentives. We have a rare chance now, with many teachers near retirement, to prove we’re serious about education. The first step is to make the teaching profession more attractive to college graduates. This will take some doing.

At the moment, the average teacher’s pay is on par with that of a toll taker or bartender. Teachers make 14 percent less than professionals in other occupations that require similar levels of education. In real terms, teachers’ salaries have declined for 30 years. The average starting salary is $39,000; the average ending salary — after 25 years in the profession — is $67,000. This prices teachers out of home ownership in 32 metropolitan areas, and makes raising a family on one salary near impossible.

So how do teachers cope? Sixty-two percent work outside the classroom to make ends meet. For Erik Benner, an award-winning history teacher in Keller, Tex., money has been a constant struggle. He has two children, and for 15 years has been unable to support them on his salary. Every weekday, he goes directly from Trinity Springs Middle School to drive a forklift at Floor and Décor. He works until 11 every night, then gets up and starts all over again. Does this look like “A Plan,” either on the state or federal level?

We’ve been working with public school teachers for 10 years; every spring, we see many of the best teachers leave the profession. They’re mowed down by the long hours, low pay, the lack of support and respect. Imagine a novice teacher, thrown into an urban school, told to teach five classes a day, with up to 40 students each. At the year’s end, if test scores haven’t risen enough, he or she is called a bad teacher. For college graduates who have other options, this kind of pressure, for such low pay, doesn’t make much sense. So every year 20 percent of teachers in urban districts quit. Nationwide, 46 percent of teachers quit before their fifth year. The turnover costs the United States $7.34 billion yearly. The effect within schools — especially those in urban communities where turnover is highest — is devastating.

But we can reverse course. In the next 10 years, over half of the nation’s nearly 3.2 million public school teachers will become eligible for retirement. Who will replace them? How do we attract and keep the best minds in the profession? People talk about accountability, measurements, tenure, test scores and pay for performance. These questions are worthy of debate, but are secondary to recruiting and training teachers and treating them fairly. There is no silver bullet that will fix every last school in America, but until we solve the problem of teacher turnover, we don’t have a chance.

Can we do better? Can we generate “A Plan”? Of course. The consulting firm McKinsey recently examined how we might attract and retain a talented teaching force. The study compared the treatment of teachers here and in the three countries that perform best on standardized tests: Finland, Singapore and South Korea. Turns out these countries have an entirely different approach to the profession. First, the governments in these countries recruit top graduates to the profession. (We don’t.) In Finland and Singapore they pay for training. (We don’t.) In terms of purchasing power, South Korea pays teachers on average 250 percent of what we do.

And most of all, they trust their teachers. They are rightly seen as the solution, not the problem, and when improvement is needed, the school receives support and development, not punishment. Accordingly, turnover in these countries is startlingly low: In South Korea, it’s 1 percent per year. In Finland, it’s 2 percent. In Singapore, 3 percent. McKinsey polled 900 top-tier American college students and found that 68 percent would consider teaching if salaries started at $65,000 and rose to a maximum of $150,000. Could we do this? If we’re committed to “winning the future,” we should. If any administration is capable of tackling this, it’s the current one.

President Obama and Education Secretary Arne Duncan understand the centrality of teachers and have said that improving our education system begins and ends with great teachers. But world-class education costs money. For those who say, “How do we pay for this?” — well, how are we paying for three concurrent wars? How did we pay for the interstate highway system? Or the bailout of the savings and loans in 1989 and that of the investment banks in 2008? How did we pay for the equally ambitious project of sending Americans to the moon? We had the vision and we had the will and we found a way.

Dave Eggers and Nínive Clements Calegari are founders of the 826 National tutoring centers and producers of the documentary “American Teacher.”

US Junk Jobs

There are 5,000 janitors in the US with PhDs“: This article features Bureau of Labor statistics showing that educated workers in the US cannot find decent, skilled jobs.

Esping-Anderson pointed out 20 years ago that the US has an incredibly large “junk jobs” sector. It’s all about inequality. Lots of junk jobs, lots of unemployment and underemployment, and a handful astronomically-overpaid managers and financial sector brats–that’s the US labor market.