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Myths about public workers mask gross inequalities


This post by UCLA English Professor, Saree Makdisi, was originally published in the Sacramento Bee on May 1, 2011.

The current obsession with state workers' wages and benefits, which has been sweeping the nation from the Midwest to California, is distracting Americans from the real economic questions we should urgently be asking ourselves.

In view of the enormous – and growing – inequalities in incomes and wealth in this country, it is nothing short of astonishing that so much resentment, to such a broad extent, has been generated over the benefit packages promised to teachers, firefighters, DMV staffers and highway repair crews, that there is no resentment left over for the real beneficiaries of our broken social and economic system. State workers are being held responsible for a wide range of budgetary and economic problems, whereas those who bear actual responsibility for those problems have been able to evade scrutiny, let alone being asked to pay any kind of price.

The result is the growing rallying cry that state workers should be stripped of pension and health care benefits that most private sector workers lost many years ago, so that they too can join the race to the bottom of wretchedness to which more and more Americans seem committed.

State workers aren't, in fact, the only Americans who can count on stable and defined retirement packages.

Corporate CEOs have made sure to retain for themselves the security and stability of fixed retirement deals that they receive irrespective of the performance of the companies under their watch, even as they force rank and file employees to entrust their futures to the uncertain lottery of the 401(k) plan. Even if the heavily larded retirement package that General Electric famously offered to its billionaire CEO Jack Welch has faded from people's memory, how about the golden parachutes awarded to more recent CEOs, including those who presided over the meltdown of their firms?

The former heads of Fannie Mae and Freddie Mac left with severance and retirement packages worth millions of dollars each; the former head of GM left with $20 million; the former head of Citigroup with $40 million; the former head of AIG with $47 million; the leader of Bank of America with almost $84 million; the head of Merrill Lynch with $160 million. And the list goes on. How come there's no resentment about those benefits?

Ah, but that's the private sector, we are told; taxpayers are being asked to subsidize the retirements of state workers, not the bosses of private corporations. That's not true, though; taxpayers financed the bailouts of Fannie Mae, Freddie Mac, GM, Bank of America, AIG and so on and on.

In fact, the extraordinary bailout of the financial sector was financed by ordinary tax-paying Americans – to the tune of almost $13 trillion, according to Bloomberg. That's $42,000 for every man, woman and child in the United States: probably the single most egregious transfer of wealth from poor to rich in the history of the world. And the same bankers we bailed out are now back to business as usual, with the top four U.S. banks paying out $84 billion in bonuses last year.

So, bailing out bankers whose greed is only exceeded by their sheer incompetence is OK, but it's not OK to cover the retirement of schoolteachers who help raise our children and firefighters who stand ready to risk their lives to save our own? What's going on here?

The gap between rich and poor in this country is wide – and growing wider. Today, the top 1 percent of Americans own about a third of the nation's wealth; by contrast, the bottom 80 percent own less than 20 percent. It's not difficult to figure out which of these groups doesn't have worry about retirement benefits and 401(k) plans.

It's not just that the rich have grown richer, but that recent times – the decades since the 1980s – have seen such a stagnation in income, health and lifestyles for the majority of Americans. More people are working harder than ever before but are more insecure than ever before; we are at or near the bottom of the pile of comparable countries when it comes to measures such as infant mortality or life expectancy, poverty levels, or the escape rate from poverty.

The fixation on the basic benefits offered to state workers in return for years of public service, rather than on the grotesque inequalities that surround us, is problematic not only because it distracts us from core questions that urgently require our collective attention, but also because it embodies the potential victory of a stark and misanthropic way of viewing society – basically the view that there is no society, only individuals who are condemned to a primal competitive struggle against one another. Remember what Thomas Hobbes said about that primal struggle in the state of nature? The only certainty was that life was nasty, brutish and short.

There is another way of viewing things, however; that we are all in this together, that we all benefit as we each benefit, that grotesque inequality is not merely destabilizing but unjust and that everyone in a wealthy country, not just state workers – and certainly not just wealthy CEOs – ought to be able to count on a stable and secure retirement.