By Jim Rudicil Sr.
What union has unprecedented sway with the U.S. Congress and at times with U.S. presidents? What union promotes policies that no longer serve the interest of the country as a whole? The Business Roundtable and its members.
They have annual sales of $7.3 trillion and they employ 16 million workers. The BRT has given its members unprecedented power over the U.S. economy and access to the levers of power in Washington D.C. and many state capitals. How else could corporate executives have used their collective power to enhance their compensation levels to levels unheard of in any other modern industrial country and at the same time convinced politicians that by reducing their taxes it would lead to job growth.
The annual Muskegon Labor Day Parade honors social and economic achievements of American workers. The 2011 parade was funded and organized by three unions: United Auto Workers, the Teamsters union, and the Building Trades union.
CEO compensation increased from 42 times their employees’ annual wages in 1980 to 380 times in 2012. What is even more startling is how they used this power to lower their personnel tax rates. They are the highest paid executives in the world and pay far less in taxes than any time in modern history.
History tells us that the forerunner of the BRT was the “Construction Users Anti-Inflation Business Roundtable” formed in the late 1960s to counter the power of building trades local unions had in securing large wage increases. They coined the phrase “leapfrogging” to complain about large union wage settlements. Building trades wage settlements at that time were very good as there was competition for workers because of the Vietnam War. The guns and butter policy of President Lyndon Johnson created a huge demand for construction workers. Due to the fact that local union leaders by federal law must run for election every three years, part of their re-election strategy was to try and get a better wage increase than another trade or local union.
As this powerful new business executives union evolved into the BRT they set about finding a way to weaken building trades unions and in most parts of the country they were successful. With their new found leverage they were able to get President Richard Nixon to institute wage price controls primarily targeting building trades wage settlements. The long term impact of the BRT is that today construction workers' wages and benefits are much, much lower than in 1980 when adjusted for inflation. Most construction workers today work without the benefit of real pensions and in most cases are not provided with family health insurance unless they are willing or can afford to pay a huge portion of it.
The BRT’s next target was private industrial unions and those trying to get a union in their workplace. Using their political power, especially with the Republicans presidents and more recently with the Republican senators, they have weakened the NLRB and now have shut it down. The practical effect is workers no longer have protection in trying to secure a voice in their workplace through a union contract.
Today, through the BRT’s efforts, the private workforce unionization rate is below 9 percent. Today, there is no practical penalty for firing workers who are trying to get a union. In fact, they are rewarded for breaking the law. Throw in trade pacts that are favorable to multinational companies looking for cheaper workers and the BRT had everything it wanted except for public sector workers and their political power. Large public sector pension plans began complaining about high corporate salaries so the next step was pointing out to private sector workers that public sector workers were doing better at the bargaining table than they were.
Now, with the help of the BRT, think tanks and groups like ALEC have gone after public sector workers turning worker against worker. Turning workers' attention away from what they themselves are doing to enhance their interests over workers is an old management ploy that has worked many times in the past. It has been honed to new levels using the new corporate media outlets such as Fox News and newspapers including the Wall Street Journal now owned by Rupert Murdoch’s media empire.
Jim Rudicil
Now the Business Roundtable executives have found a way to make the old term “leapfrogging” work on a far grander scale. Having another executive on your board of directors that sets or agrees with your pay level can easily turn into a reciprocal arrangement. Talk about leverage -- it is just another form of leapfrogging but with much higher stakes for our country! Did they spend it in building new factories and other investments to make our country more competitive? No, instead they used their ability to move factories offshore as a sledge hammer against their own employees so today most middle class wages have been stagnant since the 1980s.
Most citizens have forgotten or never realized that the top U.S. income tax rate was 94 percent in 1945 before dropping to 91 percent in 1946 and remained at 91 percent under President Dwight D. Eisenhower. President John F. Kennedy reduced it to 77 percent in 1964 and then again to 70 percent in 1965. It stayed there under Johnson, Nixon and Presidents Gerald Ford and Jimmy Carter.
With prodding from the BRT, President Ronald Reagan reduced the top income tax rate to 50 percent in 1982 and down to in 28 percent in 1988. President George H.W. Bush allowed the top rate to increase to 31 percent in 1991. Under President Bill Clinton the top rate increased to 39.6 percent in 1993.
Under George W. Bush, the top rate dropped to 35 percent in 2002 along with a cut in the capital gains tax to 15 percent again giving the ultra rich and CEOs a huge increase in spendable income. Under President Barack Obama the top rate went up to 39.6 percent and the capital gains tax went up to 20 percent for some taxpayers.
With these types of tax breaks it is easy to see why the super rich have seen their spending power and percentage of income in the United States soar while the middle and lower income citizens' percentage of income has dropped to all time lows. In almost every tax reduction since 1982, our country has paid for them by borrowing and adding to our national debt.
I want to make it clear this is not referring to a family owned businesses as few if any small, medium and even large locally owned company owners receive anywhere near the compensation that these large corporate executives receive and most plow back a good part of their profits into their company to insure its growth. It is time to make the tax code fair as well as to provide adequate revenue to fix our infrastructure, educate our children and grandchildren and insure that our elderly can live in dignity and the middle class can see their share of national income growth return to a much fairer level we saw in the '50s and '60s where everyone benefited in upward mobility not just a few.
James Rudicil Sr. is a retired IBEW International organizer. He lives in Muskegon.