Race to the Bottom: How the Politics of Resentment is Undermining America

09/20/2010 01:30 pm ET Updated May 25, 2011

While classic economics tells us that the market is balanced when everyone pursues their own individual needs, we find in contemporary politics that people often are seduced to support other people's self interests. In some of the responses to my recent article, "Defending the Middle Class: Why We Need Unions, Pensions, and Public Employees," we gain an understanding of how working-class and middle-class people have been convinced to attack their own, while they support policies and politicians aimed to undermine their own self-interests.

In looking at the comments on my article, there is a certain theme that repeats, and it is centered on the idea that if we all do not have good jobs and benefits, then no one should. One commentator presents this notion in the following manner: "Sorry but the main problem most people have with government employees is that they are paid better, get more generous pensions, have more job security and do not work as hard as private sector workers. It is a question of fairness." Besides the unjustified, but often repeated, claim that public employees do not work as hard as private sector employees, this response shows a high level of resentment. We should ask in response to this response, would you rather prefer that everyone has low pay and no benefits, or is it better if we all work for better pay and protections? Also, what about the top 10% of wage earners who are making 2/3rds of the national income, do they deserve all they have?

We see that this race to the bottom is in part driven by the idea that in order to compete in a global economy, all workers (not CEOs) must settle for low wages and no benefits: "Government workers do not compete with Chinese workers and have not seen their jobs outsourced, again not fair. How can government workers retire after 20 years with eighty % of their pay while asking private sector workers to foot the bill and not expect resentment?" This response argues that it is unfair that governmental jobs cannot be outsourced like other jobs, and so these jobs should not be protected. Moreover, since private employers have decided to deny their workers any retirement support, all workers should be left with nothing.

The self-defeating resentment circulating in these responses does reveal how the globalized economy threatens to reduce the wages and benefits of all workers. One comment displays how this global race to the bottom is seen as universal and inevitable: "The well is dry baby, Tariffs or lowering of wages and benefits to match those of our 3rd world counterparts are inevitable at this point." Instead of blaming companies or the government for outsourcing many of America's best jobs, people attack the middle-class employees who still earn a livable wage. Furthermore, we should ask these responders if it might be a good idea just to reinstate legal slavery in order to make sure that we can compete with the countries that do not protect their workers and pay them poverty wages.

Instead of questioning our trade and tax policies, people full of resentment attack the few people who still have unionized jobs with protected benefits. For example, the following comment posits that due to the recent economic downturn, we should prevent unions from protecting the salaries and benefits of their workers: "The notion of a Union by itself is not a problem. However, their ability to wield undue influence -- particularly in terms of supporting parties that negotiated contracts way out of line with the public sector is absolutely their issue. Protecting poor teachers from being relieved of their duties is absolutely their issue. Insisting on pay rates way beyond inflation is absolutely their issue. Their refusal to accept the dire economic situation they face today is absolutely their issue." Once again, the logic here is that since many people have lost their jobs or have seen their pay and benefits reduced, then we all should be subjected to the arbitrary whims of cost-cutting executives. However, what this view fails to recognize is the fact that people at the top have increased their earnings by slashing the jobs and benefits of the people below them.

In fact, it has been recently shown that some of the American CEOs who received the biggest compensation deals during the last couple of years were also the ones who laid off the highest number of workers. In other words, short-term greed often pushes private employers to eliminate workers and outsource their jobs. If we didn't have unions, this situation would even be worse, but instead of fighting to have more and better employee protections, people vote against their own self interest and call for the eradication of unions and job protections.

Not only do many people not want workers to have union-protected salaries and benefits at their current jobs, but they deeply resent the fact that some people will have a pension when they retire: "I'm not suggesting that all of these ought to be run by private companies -- but we need to adopt a model where these people are paid fairly but that they, like most of us others -- have to save for our own retirement. Even more -- that once they retire -- any commitment to further income is limited to what they have saved. We need to limit the long term liability." This form of pension envy fails to realize that many workers have paid into their pension systems, and in turn, the pension plans have invested the money to ensure a future income. What has happened is that private industries that are not unionized have simply stopped caring about the present and future welfare of their workers. Yet, instead of blaming corporations for turning their backs on their own workers, many responses attack the few people who have protected benefits.

At one time, most large companies understood that if they wanted to have customers to buy their goods, they would have to provide their own workers with healthy salaries and benefits. Now, in the world of Walmart, everyone wants to buy cheap goods, so people feel that we must outsource jobs to low-wage labor markets in order to drive down the prices of consumer products. We have moved from a virtuous circle to a vicious circle, and in this race to the bottom, only the top 10% win. Still, somehow the outsourcers and exploiters of workers escape criticism, while the few people working to protect American jobs are attacked.

Underlying much of this resentment is the idea that all public employees are governmental workers, and since the government serves no productive purpose, public employers must be doing nothing. As a result of the thirty-year attack on the government by the government, people fail to see that teachers, police officers, firemen, and healthcare workers are usually public employees protected by unions. Do commentators really think that we could live in our society without these public workers? Do teachers, police officers, firemen, and healthcare workers really do nothing? Apparently, many people feel that all of these essential workers add little to our society. Here is an example of the dismissal of the important contribution public employees make: "We will all need to pay more to perpetuate the continued growth of state government which has served little perceivable benefit in society." Since people equate all public workers with the evils of big government, they feel justified in calling for elimination of public employees, but what society would we have without these essential workers?

An element of logic and self-interest needs to enter into these discussions of our economic and political policies. What we should do is defend the middle class and working class against the tyranny of the top 10%. Instead of attacking unions, public pensions, and public employees, everyone should fight for good jobs with fair wages and benefits.