Big boys in US holding all the cards

GROWING SENSE OF POWERLESSNESS: Fired workers and existing staff protesting outside the American Apparel headquarters in Los Angeles on April 21 as they announce they would be suing the company over a recent round of sackings. Companies are treating workers as disposable cogs because most working people have no choice. They need work and must take what they can get.


    May 05, 2015

    Big boys in US holding all the cards

    A SECURITY guard recently told me he did not know how much he would be earning from week to week, because his firm kept changing his schedule and pay. "They just don't care," he said.

    A traveller I met in the Dallas/Fort Worth International Airport last week said she had been there eight hours, but the airline she was taking would not help her find another flight leaving that evening. "They don't give a hoot," she said.

    Someone I met in North Carolina a few weeks ago told me he had stopped voting because elected officials do not respond to what average people like him think or want. "They don't listen," he said.

    What connects these dots? As I travel around America, I am struck by how utterly powerless most people feel.

    The companies we work for, the businesses we buy from and the political system we participate in all seem to have grown less accountable. I hear it over and over: They do not care; our voices do not count.

    A large part of the reason is we have fewer choices than we used to have. In almost every area of our lives, it is now take it or leave it.

    Companies are treating workers as disposable cogs because most working people have no choice. They need work and must take what they can get.

    Although jobs are coming back from the depths of the Great Recession, the portion of the labour force actually working remains lower than it has been in more than 30 years - before vast numbers of middle-class wives and mothers entered paid work. This is why corporations can get away with firing workers without warning, replacing full-time jobs with part-time and contract work, and cutting wages. Most working people have no alternative.

    Meanwhile, consumers are feeling mistreated and taken for granted because they, too, have less choice.

    United States airlines, for example, have consolidated into a handful of giant carriers that divide up routes and collude on fares. In 2005, the US had nine major airlines. Now we have just four.

    It is much the same across the economy. Eighty per cent of Americans are served by just one Internet service provider: usually Comcast, AT&T or Time Warner.

    The biggest banks have become far bigger. In 1990, the five biggest held just 10 per cent of all banking assets. Now, they hold almost 45 per cent.

    Giant health insurers are larger; the giant hospital chains, far bigger; the most powerful digital platforms (Amazon, Facebook, Google), gigantic.

    All this means less consumer choice, which translates into less power.

    Our complaints go nowhere. Often, we cannot even find a real person to complain to. Automated telephone menus go on interminably.

    Finally, as voters, we feel no one is listening because politicians, too, face less and less competition. Over 85 per cent of congressional districts are considered "safe" for their incumbents in the election next year, according to FairVote; only 3 per cent are toss-ups. In presidential elections, only a handful of states are now considered "battlegrounds" that could go either Democratic or Republican.

    So, naturally, that is where the candidates campaign. Voters in most states would not see much of them. These voters' votes are literally taken for granted.

    Even in toss-up districts and battleground states, so much big money is flowing in that average voters feel disenfranchised.

    In all these respects, powerlessness comes from a lack of meaningful choice. Big institutions do not have to be responsive to us because we cannot penalise them by going to a competitor.

    And we have no loud countervailing voice forcing them to listen.

    Fifty years ago, a third of private-sector workers belonged to labour unions. This gave workers bargaining power to get a significant share of the economy's gains along with better working conditions - and a voice. Now, fewer than 7 per cent of private-sector workers are unionised.

    In the 1960s, a vocal consumer movement demanded safe products, low prices and antitrust actions against monopolies and business collusion. Now, the consumer movement has become muted.

    Decades ago, political parties had strong local and state roots that gave politically active citizens a voice in party platforms and nominees. Now, the two major political parties have morphed into giant national fund-raising machines.

    Our economy and society depend on most people feeling that the system is working for them.

    But a growing sense of powerlessness in all aspects of our lives - as workers, consumers and voters - is convincing most people that the system is working only for those at the top.


    The writer is chancellor's professor of public policy at the University of California at Berkeley, and a senior fellow at the Blum Centre for Developing Economies.