Archives for category: Inequality

The Economic Policy Institute unabashedly advocates for workers and unions and publishes accurate data about inequality. It recently revealed that CEO pay rose by 16% between 2019 and 2020, while the average worker saw a pay increase of only 1.8%.

In 1950, the average CEO was paid twenty times the wages of the average worker.

By 2019, the average CEO was paid 320 times as much as the average worker.

In some companies, the CEO is paid 1,000 times more than the average worker in that company.

Bloomberg.com reported on the CEO-worker pay gap, in an article titled “Is a CEO Worth 1,000 Times the Median Worker?”

Chipotle recently became the latest company to voluntarily raise worker pay, announcing that many of its 76,000 hourly employees would get a bump to $15 an hour. This occurred shortly after the company disclosed that CEO Brian Niccol had made nearly 3,000 times the median employee salary in 2020, up from 1,136 times in 2019 and among the top ten highest pay ratios among companies in the Russell 3000 stock index, according to research firm Equilar.

Coincidence? Or is the pay bump for the rank and file a sign that the most highly compensated senior executives are starting to feel a tinge of shame? 

For the past four years, the Securities and Exchange Commission has required publicly traded companies to disclose something called the CEO pay ratio — the amount the CEO receives in relation to the annual salary of the median employee. At many companies, especially large companies with thousands of low paid workers (think retailers, restaurants and tourism), it’s not uncommon to see a number like Niccol’s, with the CEO making more than a thousand times the salary of the median employee. According to Equilar, there are 57 such companies in the Russell 3000. Auto-parts company Aptiv PLC topped the list: CEO Kevin P. Clark’s total 2020 compensation of $31 million was more than 5,000 times that of its median employee, who made less than $6,000, according to Aptiv’s proxy.

The mere disclosure of the pay ratio is something of an achievement in itself, given how red-hot an issue compensation remains. The SEC took five years to write and nearly eight years to implement the rule, which was part of the Dodd-Frank legislation that then-President Barack Obama signed into law in July 2010. It has yet to complete rules on four other compensation-related topics, which were clearly not a priority under former SEC Chairman Jay Clayton. When the pay-ratio rule was first proposed in 2013, it attracted nearly 200,000 comments. It should come as no surprise that the overwhelming majority of companies were opposed, citing complicated business operations and unreasonable costs, while shareholder advocates and investors were eager to see the ratio disclosed.

Open the article to see the list of companies where the CEO: worker pay was largest.

Steve Ruis writes in his blog that “class warfare” is over, finished, kaput. The top .001% won. They made out like bandits during the pandemic while most people struggled to pay the mortgage or the rent. No wonder they prefer to claim that charter schools and vouchers will raise up the poor. Of course, they won’t.

He writes:

From an article in The Guardian on Forbes magazine’s latest list of billionaires:

“Forbes annual billionaire poll includes a record-breaking 2,755 billionaires, with Amazon founder Jeff Bezos once again topping the list. Elon Musk, zoomed into second place with a $151bn fortune, up $126.4bn from a year ago, when he ranked No 31 and was worth “just” $24.6bn.”

“Elon Musk, zoomed into second place with a $151bn fortune, up $126.4bn from a year ago.”

“Together the plutocrats added $5tn to their wealth for a combined fortune of $13.1tn, up from $8tn on the 2020 list. A record 493 people joined the list this year – one new billionaire every 17 hours. The majority, 205, were in China. But the gains were widespread with gains across the world.”

“But it was the incredibly wealthy who made the biggest gains. The 0.001% did even better than their lesser peers. The top 10 richest people on the list are worth $1.15tn, up from $686bn last year.”

Benjamin Wallace-Wells writes in the New Yorker about the importance of the vote on whether to unionize at an Amazon facility in Bessemer, Alabama. The workers are paid $15 an hour. They are organizing against a behemoth corporation owned by the richest man in the world over working conditions, pay too. The vote concludes Monday. Six thousand workers will define the future for millions of others. Bernie Sanders tweeted recently that the 50 richest Americans own more than the bottom 50%. Is this our future?

He writes:

Most contemporary union drives are ultimately about the past—about the contrast that they draw between the more even prosperity of previous decades and the jarring inequalities of the present. But one that will culminate on Monday, the deadline for nearly six thousand employees of an Amazon fulfillment center in Bessemer, Alabama, to cast ballots on whether to affiliate with the Retail, Wholesale, and Department Store Union, is the rare union campaign that is obviously about the future. In this case, hyperbole is possible. The Democratic congressman Andy Levin, of Michigan, a union stalwart, has described it as “the most important election for the working class in this country in the twenty-first century.” On Monday, the Reverend Dr. William Barber, as prominent a figure as exists in the modern civil-rights movement, travelled to Alabama and said, “Bessemer is now our Selma.”

That this election is about the future has something to do with the workers themselves, who embody the political transformation of the South to which progressives pin their dreams. According to union officials, a majority of the people employed at the facility, which is outside of Birmingham, are Black, and a majority are women. On the drive up to the facility, supporters of the R.W.D.S.U. planted a sign featuring the Democratic politician and voting-rights advocate Stacey Abrams striking a Rosie the Riveter pose. A high-ranking labor official in Washington pointed me to a detail from an interview, published in The American Prospect, with the campaign’s on-the-ground leader, a thirty-three-year-old organizer named Josh Brewer. Brewer said that many of the workers who supported the union had been involved in demonstrations to bring down Confederate statues in Birmingham, and they often organized themselves.

But the significance of the drive has more to do with the company itself. Amazon is now among the largest private employers in the United States; its founder, Jeff Bezos, is arguably the wealthiest man in modern history. The company has paid every one of its workers fifteen dollars per hour since November, 2018, while also pioneering second-by-second monitoring of its employees. “This isn’t just about wages,” Stuart Appelbaum, the R.W.D.S.U.’s president, told me, on Monday. It is also about the strenuous pace of work, and the real-time surveillance methods that Amazon has used to monitor employees. Appelbaum said some of the workers that his union has represented have had employers that monitored their locations with G.P.S. chips in their delivery trucks, “but there’s nothing like this, where you’re expected to touch a package every eight seconds.” It had been hard to organize within the Bessemer facility, he said, in part because many of the workers did not know one another. “It’s hyper-Taylorism,” Damon Silvers, the director of policy and the special counsel of the A.F.L.-C.I.O., said. “Amazon has determined an optimal set of motions that they want their employees to do, and they have the ability to monitor the employee at all times and measure the difference between what the employee does and what they want them to do, and there is nowhere to hide.” Appelbaum said, “People tell us they feel like robots who are being managed by robots.”

The Amazon union drive has drawn a rare intensity out of the usual suspects. Abrams, Levin, and Bernie Sanders have announced their support for it, and so has President Joe Biden, who recorded a strong message encouraging the organizers and discouraging any effort to interfere with them. It has also drawn some unusual allies, above all the conservative Republican senator Marco Rubio, of Florida, who published an op-ed in USA Today declaring his support for the organizing workers and his opposition to Amazon’s ways: “The days of conservatives being taken for granted by the business community are over.”

Amazon’s influence is so vast—touching on issues from wealth and income inequality to antitrust policy, the American relationship with China, the omnipotence of workplace surveillance, and the atomizing effect of big business, in its most concentrated and powerful form, on families and communities—that it can scramble ordinary politics. For a moment, at least, it can put Marco Rubio and Stacey Abrams on the same side. Most organizing campaigns have a symbolic quality, in which the employer and its workers stand for different models of economic organization. The fight in Bessemer is different because it is so direct. Amazon isn’t a proxy for the future of the economy but its heart.

A year into a pandemic that has kept many Americans cooped up at home, ordering supplies and streaming their entertainment, seems an unpromising time to take on Amazon, which supplies many of those services. Amazon’s revenue grew by nearly forty per cent in 2020, and its workforce grew by about fifty per cent; Jeff Bezos’s wealth reportedly increased by nearly seventy billion dollars last year. The company has become so ubiquitous that even to inquire about it entangles you in its machinery: type “is Amazon popular?” into a search engine and you might find, as I did, that most of the top results are books about popularity which are sold on Amazon. You can find evidence that Amazon both is and isn’t popular in survey data. In one poll, ninety-one per cent of respondents said that they had a favorable view of Amazon; in another, fifty-nine per cent thought the company was bad for small business. To count on broad opposition to Amazon right now is to assume such cognitive dissonance: that Americans may increasingly rely on Amazon and view it favorably while also believing that the company needs to change...


The labor leaders in Washington seemed to see Republican support as welcome but mostly ornamental—like if a distant relative had sent, for Christmas, a very large painting of a duck. They found the Democrats’ reaction more significant. In Biden’s message of support earlier this month, he warned employers not to interfere with union elections: “You should all remember that the National Labor Relations Act didn’t just say that unions are allowed to exist. It said that we should encourage unions.” Silvers, of the A.F.L.-C.I.O., said he thought that Biden was speaking directly to the workers who were organizing. “The way he’s talking is not unprecedented, but the precedents are in the Roosevelt Administration,” he said. Appelbaum, of the R.W.D.S.U., said that there had been more talk about the importance of unions in the last Presidential campaign than he’d ever heard before. “We used to talk about how even those Democratic Presidents who we like would barely talk about unions. Biden is different.”


The following essay was written by Michael Podhorzer, Senior Advisor to the president of the AFL-CIO. I totally agree that the key to building a strong middle class is the expansion of unions. The plutocrats have done a great job of demonizing them and destroying the ladder into the middle class that unions offer. Right now, Amazon workers are deciding whether to form a union in Bessemer, Alabama. I hope they win. Jeff Bezos should share the wealth with those who work for him. He should not have nearly $200 billion. Why should Elon Musk and Bill Gates have nearly $200 billion? Couldn’t they be satisfied and live in luxury with only a few hundred millions? In a just world, societies would dedicate their best efforts to reducing inequality and eliminating poverty. Let’s give credit to Joe Biden on this important issue. He has said he is a union guy, and he is pushing legislation to enable workers to join unions.

Podhorzer wrote:

The House of Representatives is expected to pass the PRO Act this week, Amazon workers in Alabama continue to vote to form a union and President Biden’s released a video encouraging working people to join unions.  

While the prospect of a national conversation about supporting working people organizing themselves against their exploitation is long overdue, maddeningly, even those who support unions regret the “decline in union membership.” Stating the fact that union members make up a smaller share of the workforce than they once did in the passive voice (decline) erases causality, implicitly confirming the idea working people are now less likely to want to be in a union, or that unions are outdated, or that unions themselves have done a poor job selling themselves. In fact, research from the Massachusetts Institute of Technology shows more than 60 million people would vote to join a union today if given the opportunity and Gallup recently found that union approval stands at 65%, one of the highest marks in a half-century. 

A more accurate characterization of the same fact would be, “intense and sustained corporate campaigns to bust unions, make it more difficult to form unions, exclude more sectors of the workforce from access to union membership and depict unions in the worst possible ways, along with an often bi-partisan retreat in federal support for working people, relentless roll backs by Republican Presidents and Republican trifecta states have dramatically reduced the number of working people who even have the option of joining one.” 

This is yet another example of progressives repeating their opponents’ framing with the effect of making the intentional and contingent seem natural and inevitable.   Similarly, we routinely talk about profits rising, but never about the fact that an increasing share of those rising profits come from preventing working people from sharing in the gains from their increasing productivity. Thus, since the pandemic, all of Amazon’s gains have been captured by Jeff Bezos and the company’s largest shareholders, not the working people risking (and losing) their lives to enable many of us to get through this year without much to disturb our lifestyles. 

Meanwhile, progressive opinion leaders and policy wonks wring their hands and heroically search for fresh solutions to the most pressing crises of the day as if there isn’t a substantial body of evidence that increased union membership ameliorates many of them, including income inequality, democratic participation, racism and authoritarianism among other things (below).  

Studies show that union workers make about $150 billion more a year than non-union workers in wages alone controlling for industry, occupation education and experience. And union workers are much more likely to have health, pension and leave benefits than non-union workers, and those benefits are much more substantial than those non-union workers who have them at all. To put that in perspective: $150 billion is more than twice the SNAP program, yet costs the taxpayer almost nothing. 

All of this will seem improbable at best as long as you imagine that the benefits accrue from unions as the institutions you experience in your professional life.  The benefits accrue from allowing working people to organize themselves collectively and democratically to act on their own behalf.   It is the practice of acting democratically and collectively to negotiate contracts and set working conditions that produces more tolerant, effective citizens. Union members vote for things that matter in their daily lives from their shop steward to the health benefits in their contracts. They can see how much more powerful they are together, embracing their linked fate than they are on their own. They practice a democracy that has all but disappeared elsewhere in America. 

Even if most progressives don’t fully understand how much more powerful working people acting together on their own behalf are than government programs designed to help them, corporations do. That’s why, since the Wagner Act they have relentlessly attacked working people’s ability to combine. 

The Taft-Hartley Act is most known for opening the door to “right to work.” By the 1950’s most southern states were “right to work,” crippling the CIO’s multiracial organizing efforts in the region. The creation of an effectively non-union, low wage region of the country quickly had two profound effects. First, by offering a low wage domestic region to relocate to, unionized corporations had greater leverage against their employees demands. Arguably as important, but much less recognized, it put an end to the development of a national working class consciousness. 

Even less well recognized are the impacts of the restrictions Taft-Hartley put on joint action. The Taft-Hartley Act also banned  jurisdictional strikessolidarity or political strikessecondary boycotts, secondary and mass picketing. In doing so, the Act made illegal the ways in which working people could join together beyond their own employer on behalf of other working people. In this way again, corporations were able to criminalize the development of class solidarity. That has also radically shaped the incentives of unions as institutions. 

MORE THAN THE WEEKEND

While there’s growing acknowledgment of how much the neoliberal market absolutism that triumphed in the late 1970’s is responsible for the present state of affairs, there’s relatively little genuine awareness of what it replaced, or how breaking working people’s ability to act collectively was central to its success. 

Although very far from perfect, from the New Deal until the 1970’s was a period in which pluralism was seen as an essential element of healthy democracy. And there was no more important element of pluralistic America than the labor movement.  At an elite level, a tripartite pluralism consisting of business, labor and government was seen as crucial for the nation’s prosperity and robust democracy. (For example, John Kenneth Galbraith, American Capitalism; The Concept of Countervailing Power and The New Industrial State.)

Unions demonstrated to ordinary people that community problems could only be solved by coming together; strength in numbers was more than a slogan, it was a democratic habit and the way America often functioned. This was a period of movements that led the way to the progress since eroded and continuously under siege.  The advances made on civil rights, women’s rights, environmental protection and limiting foreign military intervention and nuclear proliferation (for a time) reflected sustained collective action that required immense social capital built up from the myriad associations that were common at the time to cohere and a shared experience that government would be responsive.

That social capital and sense of agency is shot, demonstrated by our learned helplessness in the face of Trump’s shredding so much of what those movements delivered.  This Brookings’ Tracking Deregulation in the Trump Era provides a staggering inventory of decimation. For example, not only has Trump been dismantling the environmental regulatory system, the EPA has been routinely granting thousands of waivers and just not enforcing the law. And, almost without notice, the longstanding treaties and instruments to control nuclear proliferation have been discarded.

The rest of this Weekend Reading provides a guide to resources that demonstrate the ways in which an empowered workforce changes everything and concludes with key points about the PRO Act. 

Inequality

The labor movement plays many positive roles in democratic societies—but the most foundational is making sure that the people who do the work of society share in the wealth they create.  This is one of many charts the show the connection between corporate success weakening unions and the increasing share of income going to the top ten percent. 

Income inequality is the result of unequal power. It’s that simple. 

  • Unions, inequality, and faltering middle-class wages provides an excellent overview of much of the literature. 
  • This paper from Hank Farber, Daniel Herbst, IIlyana Kuziemko, and Suresh Naidu is just-revised and packed with terrific (and comprehensive) analysis of the relationship between unions and inequality.  It shows how the strength of unions and collective bargaining in the United States after World War II disproportionately benefited low wage workers and workers of color.  It remains the gold standard analysis so far of unions and economic outcomes over the long-run in the 20th century.  
  • Internationally, this report from the Organization for Economic Cooperation and Development (OECD) documents the positive effects of unions across the developed world.
  • This paper found that, “the decline of organized labor explains a fifth to a third of the growth in inequality” from 1973 to 2007. 

Democracy

As I said earlier, it is only recently that the accepted idea of that holding free and fair elections was the only requirement to qualify as a democracy. The degree to which people have collective agency in their daily lives determines the health of the society and the democracy. We don’t even notice the ways in which the law facilitates the affluent acting collectively, most notably through corporations. Or the ways in which the law inhibits everyone else from acting collectively. The following research develops that idea. 

  • Authoritarianism. This study in Nature showed that “Participatory practices at work change attitudes and behavior toward societal authority and justice.” Specifically, they found that “participatory meetings led workers to be less authoritarian and more critical about societal authority and justice, and to be more willing to participate in political, social, and familial decision-making.” It confirms earlier research here and here that unions fundamentally change members understanding of and expectations for the relations of power between themselves and their employers. 
  • Resistance to system justification. John Jost’s Theory of System Justification provides a powerful explanation of why oppressed people rarely rebel. Much more to come on this in future Weekend Reading and Open Mic. Relevant here is the theory’s logic, borne out in research that willingness to protest is much less a function of the extent of oppression than beliefs about group efficacy.  “Collective action is more likely when people have shared interests, feel relatively deprived, are angry, believe they can make a difference and strongly identify with relevant social groups.”
  • Responsive Congressional Representation.  This recent paper from Michael Becher and Daniel Stegmueller uses an impressive array of survey data and union membership data to show how the presence of stronger unions within U.S. House districts leads to more policy responsiveness for lower-income Americans (and less responsiveness for higher-income Americans), especially on economic issues.
  • Protest. This paper by Greg Lyon and Brian Shaffner documents how unions increase protest activity among non-members through social ties, especially relevant for thinking about how unions have seeded and supported recent protests.

Racism

Although very far from perfect, and especially in its origins often an accomplice to segregation and racism, the union movement has also been an essential partner in dismantling elements of systemic racism.  In Racial Realignment: The Transformation of American Liberalism, 1932-1965, Eric Schickler recovers the importance of the partnership between the Congress of Industrial Organizations (CIO) and the Civil Rights movement.   The solid segregationist South initially supported most of the early New Deal’s pro-worker legislation, including the Wagner Act. However, once the CIO began multi-racial organizing efforts in the South, Southern Democrats turned on the labor. Over the next several decades, the Civil Rights movement and the CIO the power of the Southern wing inside the Democratic Party, succeeding in adopting a Civil Rights plank at the 1948 Democratic Convention that triggered Thurmond’s third party candidacy that year which carried Alabama, Louisiana, Mississippi and South Carolina. Speakers at the March on Washington included A. Philip Randolph and Walter Reuther. 

Furthermore, union membership increases racial tolerance. For example, this paper from Paul Frymer and Jake Grumbach uses survey data to show how union membership leads to more tolerant views of racial minorities among white workers, and is an important reminder of the spillover effects of unions on many other attitudes and preferences beyond economic policy.

Politics

Many have written about the role of unions in politics. Tom Edsall makes the point, obvious to Grover Norquist, business and the right wing, but somehow obscure to many Democrats and progressives, that gutting the labor movement would mean that, “the modern Democratic Party will cease to be a competitive power in American politics.” Republicans wasted little time after their state electoral sweep in 2010 to attack unions, beginning in Wisconsin.  The recent book, State Capture, tells this story.  

Numerous studies document the connection between union strength Democratic and progressive political impacts. Union members vote more Democratic than their neighbors. Nate Silver (2008) and Harry Enten (2012) write about how consequential that gap was, accounting for about 1.7 points of Obama’s margin in both elections. After controlling for other demographics they found that union membership was one of the most important variables. Thus, it is not surprising that fewer union members = fewer Democrats:

  • Right to Work. In this 2018 study, Alexander Hertel Fernandez carefully examined the impact of the passage of Right to Work laws and concluded that Democrats pay an average of a 3.5 point penalty after passage. They attribute that to lower union density, less political activism and collateral impacts on family and neighbors.  Data for Progress takes a different approach, and finds the same result. Instead of looking at RTW, they create a time series relating union density to congressional vote for each of the 50 states. As union density in a state declines, so does the Democratic vote share. It’s a very steep curve after 1990.   (Includes density-Democratic vote graphs for every state.)
  • Fewer Resources for Politics. Both the OpenSecrets and FollowTheMoney websites track union giving. For example, the 2018 election cost $2.1 billion more than 2010, but union spending increased by only $81 million. That was the pattern at the state level as well. That said, unions are still a very significant share of independent spending.

So, while Democratic strategists obsess in their search for the message or counsel a “cultural” conservatism that will get a few more working class votes, they ignore the evidence that increased union membership would provide a much greater and durable increase in Democratic support.  

THE PRO ACT

The PRO Act is the most significant worker empowerment legislation since the Great Depression because it will:

  • Empower workers to exercise our freedom to organize and bargain. 
  • Ensure that workers can reach a first contract quickly after a union is recognized.
  • End employers’ practice of punishing striking workers by hiring permanent replacements. Speaking up for labor rights is within every worker’s rights—and workers shouldn’t lose our jobs for it.
  • Hold corporations accountable by strengthening the National Labor Relations Board and allowing it to penalize employers who retaliate against working people in support of the union or collective bargaining.
  • Repeal “right to work” laws—divisive and racist laws created during the Jim Crow era—that lead to lower wages, fewer benefits and more dangerous workplaces.
  • Create pathways for workers to form unions, without fear, in newer industries like Big Tech.

Click here for the AFL-CIO’s PRO Act toolkit.   Click here for the Economic Policy Institute’s Why unions are good for workers—especially in a crisis like COVID-1912 policies that would boost worker rights, safety, and wages.

Historian of education Christina Groeger writes that Americans have long believed that education is the key to equality, but she thinks that this faith is misplaced.

She writes:

“The best way to increase wages and reduce wage inequalities in the long run is to invest in education and skills,” wrote economist Thomas Piketty in his landmark Capital in the Twenty-First Century. For nearly 200 years, education has been seen as a central means of reducing the gap between rich and poor. Today, this idea has become something of a national faith, as politicians across the political spectrum tout the power of education to shape a more egalitarian society. However, faith in educational expansion as a means of achieving the American Dream has obscured the ways the same process has in fact deepened economic inequality at different historical moments. If we don’t explore its full consequences, education as a policy tool can become a dangerous trap.

In the U.S., the relationship between education and social inequality points to a paradox. On the one hand, the U.S. has long had among the highest rates of school enrollment and attainment in the world. In 2017, the United States ranked second-highest globally for the average years of schooling for individuals over the age of 25. On the other hand, the U.S. currently has one of the highest rates of social inequality and lowest rates of social mobility in the Global North. In sum, even though many Americans are getting educated at unusually high rates, the U.S. economy is extremely polarized between the 1% and the rest. If education were indeed the great equalizer, this could not be true.

This seeming paradox stems from the fact that the American educational system and the modern corporate economy grew up together and mutually shaped one another from the start.

After briefly reviewing the importance of education in opening up new opportunities for clerical and sales workers and for white collar workers, she maintains that education does not produce equality.

The uneasy truth is that educational solutions often were and are politically palatable to those with the most economic power precisely because they do not directly threaten that power. Educational solutions have tended to place the burden of reform onto individuals to improve their skill level, rather than the larger structure of a vastly unequal economy. The notion that we can “upskill” our way out of an unequal economy, however, misdirects our attention away from the role of employers and economic elites in maintaining their immense workplace authority.

Between the 1940s and 1970s, inequality fell. What role did education play? Many scholars have attributed the decline in social inequality to massive public investment in education. However, the mid-20th century decline had to do with much more than just education. Particularly important was the power of new industrial unions. Unlike exclusive craft unions, industrial unions organized workplaces across lines of skill, race, ethnicity, and gender, reaching a peak of 36% of all private sector workers by 1953. Organized workers became the mass base of support for public policies like a high progressive income tax and social welfare programs. The expansion of public education on its own would not have been able to account for the significant decline in inequality in this period; rather, the growth of worker power, economically and politically, was the primary driver of these changes.

Since the 1970s, workers’ rights have been stripped away, unionization rates have fallen to a mere 6% of private sector workers, budgets for public services have been slashed, and the wealthy pay less in taxes. The economy is increasingly polarized between low-wage service jobs performed disproportionately by women and people of color, on the one hand, and the professional beneficiaries of the “knowledge economy” on the other. The history of the early twentieth century teaches us that there is nothing inherent in educational expansion that means its economic benefits will be equally distributed. In fact, as we are seeing today in the highly-credentialed fields of financial services, corporate law, and specialized medicine, when worker power is at an all-time low, educational expansion without additional protections can simply concentrate the power of existing elites.

The meaning and significance of education is much greater than economic advancement. But until economic subsistence is addressed, education will be tied to these vocational ends, understandably for so many students for whom education is a means of securing a living. If we want to free education up for non-vocational ends, we need to ensure that all people can achieve a livelihood first.

School expansion must be coupled with efforts that build worker power, which historically has been the basis of a more egalitarian society. These include building strong and inclusive unions, raising the minimum wage, expanding social welfare programs, and implementing the progressive taxation necessary to fund them. The collective power of workers, not education level, is ultimately what will matter most for creating a more egalitarian society.

Thus, we can understand the ongoing barrage of attacks on teachers’ unions and the growth of nonunion charter schools as efforts by elites to prevent workers from having any power and from building the egalitarian society that is part of our national creed.

McKenzie Scott is the ex-wife of Jeff Bezos. She was at his side when he founded Amazon and was the company’s first accountant. She played a role in the success of the company. When they divorced (he left her for another woman), McKenzie received a share of his Amazon stock. She is now one of the richest people in the world. The Bloomberg Billionaires Index ranks her as the 18th richest person in the world, right behind Alice Walton, with a net worth (on Tuesday) of of $62.4 billion (Jeff Bezos is the richest person in the world, with a net worth of $189 billion).

In a better world, there would be no billionaires. Everyone would pay a fair share of their income and wealth in taxes, and there would be no extremes of wealth or poverty. The rich would still be richer than everyone else, but not obscenely rich, with billions that they could never spend in ten lifetimes.

McKenzie Scott is giving away more than any other billionaire. Last week, she revealed that she had given away $4.1 billion to more than 384 organizations in every state and Puerto Rico. Advised by a team, she selected the recipients to focus on directly helping those who were actively involved in serving the most vulnerable members of society. In late July of this year, she gave away almost $1.7 billion to 116 organizations focused racial equity, LGBT equity, gender equity, economic mobility, empathy, democracy, public health, global development, and climate change.

She wrote on Medium about the groups that received grants:

Some are filling basic needs: food banks, emergency relief funds, and support services for those most vulnerable. Others are addressing long-term systemic inequities that have been deepened by the crisis: debt relief, employment training, credit and financial services for under-resourced communities, education for historically marginalized and underserved people, civil rights advocacy groups, and legal defense funds that take on institutional discrimination.

To select these 384, the team sought suggestions and perspective from hundreds of field experts, funders, and non-profit leaders and volunteers with decades of experience. We leveraged this collective knowledge base in a collaboration that included hundreds of emails and phone interviews, and thousands of pages of data analysis on community needs, program outcomes, and each non-profit’s capacity to absorb and make effective use of funding. We looked at 6,490 organizations, and undertook deeper research into 822. We put 438 of these on hold for now due to insufficient evidence of impact, unproven management teams, or to allow for further inquiry about specific issues such as treatment of community members or employees. We won’t always learn about a concern inside an organization, but when we do, we’ll take extra time to evaluate. We’ll never eliminate every risk through our analysis, but we’ll eliminate many. Then we can select organizations to assist — and get out of their way.

We do this research and deeper diligence not only to identify organizations with high potential for impact, but also to pave the way for unsolicited and unexpected gifts given with full trust and no strings attached. Because our research is data-driven and rigorous, our giving process can be human and soft. Not only are non-profits chronically underfunded, they are also chronically diverted from their work by fundraising, and by burdensome reporting requirements that donors often place on them. These 384 carefully selected teams have dedicated their lives to helping others, working and volunteering and serving real people face-to-face at bedsides and tables, in prisons and courtrooms and classrooms, on streets and hospital wards and hotlines and frontlines of all types and sizes, day after day after day. They help by delivering vital services, and also through the profound encouragement felt each time a person is seen, valued, and trusted by another human being. This kind of encouragement has a special power when it comes from a stranger, and it works its magic on everyone. We shared each of our gift decisions with program leaders for the first time over the phone, and welcomed them to spend the funding on whatever they believe best serves their efforts. They were told that the entire commitment would be paid upfront and left unrestricted in order to provide them with maximum flexibility. The responses from people who took the calls often included personal stories and tears. These were non-profit veterans from all backgrounds and backstories, talking to us from cars and cabins and COVID-packed houses all over the country — a retired army general, the president of a tribal college recalling her first teaching job on her reservation, a loan fund founder sitting in the makeshift workspace between her washer and dryer from which she had launched her initiative years ago. Their stories and tears invariably made me and my teammates cry.

It is obvious that the tax code is not going to be changed any time soon. Trump and McConnell revised it to favor the 1%, and McConnell will fight to keep it skewed toward big donors and corporations.

In the meanwhile, I salute McKenzie Scott for singling out the worthiest organizations and giving money without strings. Unlike the Billionaire Boys and Girls Club (think Gates, Broad, the Waltons), she does not choose organizations that are doing her bidding. She funded organizations serving those in need and gave them unconditional grants.

Not everyone is impressed by her generosity:

Some point out that in a different America, Scott wouldn’t have billions of dollars to give away – instead, more of that wealth would be paid in taxes that could benefit all Americans, and in higher wages to Amazon employees who could use the money directly.

Anand Giridharadas, author of the book Winners Take All: The Elite Charade of Changing the World, said in a tweet, which has since been removed, that it was “union-busting and tax avoidance that made the fortune possible.”

As well as praising a billionaire for giving money to HBCUs, Giridharadas said rank-and-file Amazon workers should be praised for their contribution to the company’s success: “Let us salute some folks barely holding on, running up and down warehouse aisles, whose wages did this.”

But even critics of income inequality recognize that McKenzie Scott is far more generous than her fellow billionaires, most of whom signed “The Giving Pledge” (promising to give away most of their wealth) but are taking their time dispensing their vast riches. (Look at the pictures of billionaires on the website of The Giving Pledge. Think Scrooge. Think French Revolution. Liberté, Fraternite, Egalite.)

Chuck Collins, director of the Program on Inequality and the Common Good at the Institute for Policy Studies, wrote at CommonDreams that while Scott is a newcomer on the billionaire-giving scene, she is doing it better than others in her cohort.

“She still has a long way to go in her stated intention of giving away all the wealth. But she’s now made two bold moves, putting to shame the other 650 U.S. billionaires who haven’t figured out comparable ways to boldly share,” he said.

“During a pandemic when US billionaire wealth has increased $1 trillion since March, other billionaires should draw inspiration from her approach to move funds to urgent needs, to historically marginalized groups, to share decision-making with non-wealthy people, and to avoid warehousing funds in private legacy foundations.”

Our society has a long way to go to create an economy where everyone has a chance to live a decent life, find satisfying work, have access to good health care, good housing, good schools.

Farhad Manjoo is an opinion writer for the New York Times. In this column, he says that the wealth of American billionaires has grown dramatically during the pandemic. We know that millions of Americans are facing hunger, poverty, and evictions. Inequality is expanding.

He writes:

When I called up Chuck Collins on Tuesday afternoon, I found him glued to one of the grimmest new metrics documenting America’s economic and social unraveling.

Collins is a scholar of inequality at the Institute for Policy Studies, a progressive think tank, and since March he has been tracking how the collective wealth of American billionaires has been affected by the coronavirus pandemic. In previous recessions, Collins said, billionaires were hit along with the rest of us; it took almost three years for Forbes’s 400 richest people to recover losses incurred in 2008’s Great Recession.

But in the coronavirus recession of 2020, most billionaires have not lost their shirts. Instead, they’ve put on bejeweled overcoats and gloves made of spun gold — that is, they’ve gotten richer than ever before.

On Tuesday, as the stock market soared to a record, Collins was watching the billionaires cross a depressing threshold: $1 trillion.

That is the amount of new wealth American billionaires have amassed since March, at the start of the devastating lockdowns that state and local governments imposed to curb the pandemic.

On March 18, according to a report Collins and his colleagues published last week, America’s 614 billionaires were worth a combined $2.95 trillion. When the markets closed on Tuesday, there were 650 billionaires and their combined wealth was now close to $4 trillion. In the worst economic crisis since the 1930s, American billionaires’ wealth grew by a third.

It is difficult to think of a more succinctly obscene illustration of the unfairness of the American economic and political system.

“The economy is now wired ‘heads you win, tails I lose,’ to funnel wealth to the top,” Collins told me.

Billionaires amassed their new billions just as millions of other Americans plunged into dire financial straits. More than 20 million people lost their jobs at the start of the pandemic. As Congress lazily contemplates whether or not to bother to continue to provide economic assistance to America’s neediest, as many as 13 million people are at risk of losing the expanded benefits that keep them just beyond the grip of hunger and homelessness.

Food banks across the country are bracing for another surge in demand. If a federal moratorium on evictions is allowed to expire at the end of the year, millions of Americans will have to pay months of back rent — making them vulnerable to what housing advocates warn will be a wave of evictions.

Why are American billionaires doing so well while so many other Americans suffer? Part of the story is garden-variety American inequality. Stocks are overwhelmingly owned by the wealthy, and the stock market has recovered from its early-pandemic depths much more quickly than other parts of the economy.

But some billionaires are also benefiting from economic and technological trends that were accelerated by the pandemic. Among these are the owners and investors of retail giants like Amazon, Walmart, Target, Dollar Tree and Dollar Generalwhich have reported huge profits this year while many of their smaller competitors were clobbered as the coronavirus spread.

Then there are companies that have bet on the rapid digitization of everything. Eric Yuan, the chief executive of Zoom, became a billionaire in 2019. Now he is worth almost $20 billion. Apoorva Mehta, the founder of the grocery-delivery company Instacart, was not a billionaire last year; this year, after a spike in orders that led to a new round of investment that pumped up the value of his company, he’s safely in the club. Dan Gilbert, the chairman of Quicken Loans, was worth less than $7 billion in March; now he commands more than $43 billion.

But like in the rest of the economy, there is a great deal of stratification even among billionaires — richer billionaires got even richer in 2020 than the poorer ones did.

Some of the numbers are staggering. Jeff Bezos, Amazon’s founder, was worth about $113 billion at the start of the pandemic. Now he is worth $182 billion — an increase of about $69 billion. Jim, Alice and Rob Walton, three of the largest shareholders of Walmart, saw their combined wealth grow by $47 billion during the pandemic.

This is a good time to urge you to read The Spirit Level: Why Greater Equality Makes Societies Stronger.

The more equal societies are, the happier they are. We are sinking into an abyss of anger, hopelessness, envy, and despair.

Nathan Bomey explained the tax avoidance strategies of the super-rich in an article in USA Today.

Tax evasion is illegal but tax avoidance is not. Clever accountants can find loopholes and strategies to reduce the taxes of their clients.

It is far better to be an investor than to have a salary.

Wealthy Americans are the largest source of underreported income, according to IRS data analyzed by researchers. The top 1% of American taxpayers account for about 34% of misreported income, according to a study published in the National Tax Journal.

Many wealthy Americans deploy complex, arcane but wholly legal strategies to minimize their tax obligations. Some use fairly straightforward strategies that allow them to minimize their taxes under the tax code…

It’s much harder to avoid taxes on your paycheck than on your investments.

In general, the federal government taxes regular wages at higher rates than investment income. The long-term capital gains tax rate maxes out at 20%, and the highest income tax rate is 37%.

In other words, if you make a salary of $1 million, the government keeps $370,000. If you make $1 million on stocks or similar investments, the government keeps $200,000.

Taxes on assets such as stocks and real estate investments aren’t owed until they are sold. That helps people such as Jeff Bezos, the Amazon CEO, founder and richest person in the world, grow their wealth rapidly while avoiding a huge tax bill. Then they can be strategic about when they sell.

Very wealthy people have lobbyists. They make large campaign contributions to key members of Congress, who protect the interests of their donors.

It is not fair, and Trump’s tax returns should make more people aware of the need for genuine tax reform, not the kind of sham tax plan passed by Trump and Mitch McConnell to benefit corporations and the wealthy.

Jan Resseger reviews here a new book that explains the full-blown triumph of plutocracy. Trump is the culmination, not the cause. Wealth and power are now concentrated, more than ever, in the hands of a small minority, and Trump has persuaded his followers that plutocracy works for them!

She begins:

For ten years Jacob Hacker, the Yale political scientist, and Paul Pierson, the Berkeley political scientist, have been tracking exploding economic inequality in the United States. In this summer’s book, Let Them Eat Tweets, Hacker and Pierson explicitly identify our government as a plutocracy. And they track how politicians (with the help of right-wing media) shape a populist, racist, gun-toting, religious fundamentalist story line to distract the public from a government that exclusively serves the wealthy. In a new article published in the Columbia Journalism Review, Journalism’s Gates Keepers, Tim Schwab examines our plutocracy from a different point of view: How is the mainstream media, the institution most of us look to for objective news, shaped increasingly by philanthropists stepping in to fill the funding gaps as newspapers go broke and news organizations consolidate?

In their 2010 classic, Winner-Take-All Politics, Hacker and Pierson present “three big clues” pointing to the tilt of our economy to winner-take-all: “(1) Hyperconcentration of Income… The first clue is that the gains of the winner-take-all economy, befitting its name, have been extraordinarily concentrated. Though economic gaps have grown across the board, the big action is at the top, especially the very top… (2) Sustained Hyperconcentration… The shift of income toward the top has been sustained increasingly steadily (and, by historical standards, extremely rapidly) since 1980… (3) Limited Benefits for the Nonrich… In an era in which those at the top reaped massive gains, the economy stopped working for middle-and working-class Americans.” Winner-Take-All Politics, pp. 15-19) (emphasis in the original)

Hacker and Pierson’s second book in the recent decade, the 2016 American Amnesia explores America’s loss of faith in government, our massive forgetting about the role of government regulation and balance in a capitalist economy: “(T)he institution that bears the greatest credit often gets short shrift: that combination of government dexterity and market nimbleness known as the mixed economy. The improvement of health, standards of living, and so much else we take for granted occurred when and where government overcame market failures, invested in the advance of science, safeguarded and supported the smooth functioning of markets, and ensured that economic gains became social gains.” (American Amnesia, p. 69)

In their new Let Them Eat Tweets, Hacker and Pierson no longer avoid the label. They now call America a full blown plutocracy: “This is not a book about Donald Trump. Instead, it is about an immense shift that preceded Trump’s rise, has profoundly shaped his political party and its priorities, and poses a threat to our democracy that is certain to outlast his presidency. That shift is the rise of plutocracy—government of, by, and for the rich. Runaway inequality has remade American politics, reorienting power and policy toward corporations and the super-rich (particularly the most conservative among them)… The rise of plutocracy is the story of post-1980 American politics. Over the last forty years, the wealthiest Americans and the biggest financial and corporate interests have amassed wealth on a scale unimaginable to prior generations and without parallel in other western democracies. The richest 0.1 percent of Americans now have roughly as much wealth as the bottom 90 percent combined. They have used that wealth—and the connections and influence that come with it—to construct a set of political organizations that are also distinctive in historical and cross-national perspective. What makes them distinctive is not just the scope of their influence, especially on the right and far right. It is also the degree to which the plutocrats, the biggest winners in our winner-take-all economy, pursue aims at odds with the broader interests of American society.” (Let Them Eat Tweets, pp. 1-2)…

But there is another hidden element of the power of plutocrats. Philanthropies led by the wealthy make charitable gifts which subtly shape news reporting itself. And the subject here is not merely Fox and Breitbart and the other right-wing outlets. Tim Schwab’s important report from the Columbia Journalism Review is about one of America’s powerful plutocrats, Bill Gates. Schwab explores, “a larger trend—and ethical issue—with billionaire philanthropists’ bankrolling the news. The Broad Foundation, whose philanthropic agenda includes promoting charter schools, at one point funded part of the LA Times’ reporting on education. Charles Koch has made charitable donations to journalistic institutions such as the Poynter Institute, as well as to news outlets such as the Daily Caller, that support his conservative politics. And the Rockefeller Foundation funds Vox’s Future Perfect, a reporting project that examines the world ‘through the lens of effective altruism’—often looking at philanthropy. As philanthropists increasingly fill in the funding gaps at news organizations—a role that is almost certain to expand in the media downturn following the coronavirus pandemic—an unexamined worry is how this will affect the ways newsrooms report on their benefactors.”

Those of us who have been following public education policy over two decades know that the Bill and Melinda Gates Foundation has invested in policy itself—funding think tanks like the Center on Reinventing Public Education—which brought us “portfolio school reform” charter school expansion—which led to Chicago’s Renaissance 2010— which led to Arne Duncan’s bringing that strategy into federal policy in Race to the Top. We know that the Gates Foundation funded what ended up as an expensive and failed small high schools initiative, and, after that failed—an experiment with evaluating teachers by their students’ standardized test scores—and later experimenting with incentive bonuses for teachers who quickly “produce” higher student scores. We remember that the Gates Foundation brought us the now fading Common Core. And we remember that Arne Duncan filled his department with staff hired directly from the Gates Foundation.

I urge you to read it all. It’s important!

This may be the most important article you read this year. The pandemic has exacerbated the huge inequality gaps that existed before the virus struck. Now we see millions of our fellow citizens out of work and sinking into poverty. Wealth inequality and income inequality are growing larger and more damaging by the day.

Venture capitalist Nick Hanauer and Seattle labor leader David Rolf demonstrate the vast transfer of wealth from the bottom 90% of our society to the top 1%. This is not good for our society. In fact, it’s horrible for our society because it creates widespread despair and hopelessness, as well as blighting the lives of our fellow citizens.

Here is a small part of the article. Open it and read it all.

They begin:

Like many of the virus’s hardest hit victims, the United States went into the COVID-19 pandemic wracked by preexisting conditions. A fraying public health infrastructure, inadequate medical supplies, an employer-based health insurance system perversely unsuited to the moment—these and other afflictions are surely contributing to the death toll. But in addressing the causes and consequences of this pandemic—and its cruelly uneven impact—the elephant in the room is extreme income inequality.

How big is this elephant? A staggering $50 trillion. That is how much the upward redistribution of income has cost American workers over the past several decades.

This is not some back-of-the-napkin approximation. According to a groundbreaking new working paper by Carter C. Price and Kathryn Edwards of the RAND Corporation, had the more equitable income distributions of the three decades following World War II (1945 through 1974) merely held steady, the aggregate annual income of Americans earning below the 90th percentile would have been $2.5 trillion higher in the year 2018 alone. That is an amount equal to nearly 12 percent of GDP—enough to more than double median income—enough to pay every single working American in the bottom nine deciles an additional $1,144 a month. Every month. Every single year.

Price and Edwards calculate that the cumulative tab for our four-decade-long experiment in radical inequality had grown to over $47 trillion from 1975 through 2018. At a recent pace of about $2.5 trillion a year, that number we estimate crossed the $50 trillion mark by early 2020. That’s $50 trillion that would have gone into the paychecks of working Americans had inequality held constant—$50 trillion that would have built a far larger and more prosperous economy—$50 trillion that would have enabled the vast majority of Americans to enter this pandemic far more healthy, resilient, and financially secure.

As the RAND report [whose research was funded by the Fair Work Center which co-author David Rolf is a board member of] demonstrates, a rising tide most definitely did not lift all boats. It didn’t even lift most of them, as nearly all of the benefits of growth these past 45 years were captured by those at the very top. And as the American economy grows radically unequal it is holding back economic growth itself.