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Forget About Cutting Taxes

Corporations Rob Workers

ax cuts, tax cuts, tax cuts: politicians have been beating on this old horse so long I am surprised it did not die a hundred years ago. Yet, there seems to be a common theme in politics these days that crosses most party lines and is important to many voters, one that suggests that the government is stealing the American people's money through

taxes, taxes that need to be cut. The politicians and the voters are right that the American people are being robbed of their money, but they have accused the wrong villain.

The best kept secret in America, a secret that the politicians and powerful corporations do not want you to know, is that businesses and corporations are making a killing in the current economy by exploiting their workers and refusing to share their profits.

It is corporations and businesses that are the real thieves, not the government.

Despite the claims that everyone is better off in the "booming" economy, inequalities are increasing in America and workers are not getting their share of the pie. The best thing that American workers could do right now is demand a fair wage, one that gives them the money they deserve in the first place.

Let's look at the facts.

Fact Number 1: Sweatshops continue to function despite the success of the economy. In recent years, there has been a proliferation of anti-sweatshop groups that have exposed many of the sweatshop abuses of US companies in foreign countries, including the use of child labor, the paying of slave wages, and the continuation of dangerous working conditions. What is less known is that sweatshops exist even in the United States.

The Department of Labor (DOL) readily acknowledges that sweatshop abuses are rampant in the US garment industry. A ’96 DOL survey of garment contractors in the Los Angeles area determined that 43 percent did not pay the minimum wage, 55 percent did not pay overtime, and 96 percent did not provide safe or healthy work environments.

Earlier this year, the DOL announced that it was rewarding back pay to workers in a Los Angeles sweatshop that produces clothes for GAP, Eddie Bauer, The North Face, Reebok, and other popular and extremely wealthy companies. If the economy is doing as well as the economists say, then it is hard to understand why a company like GAP, whose Chief Executive Officer makes over $10 million a year, needs to pay sweatshop wages. The use of sweatshops both globally and nationally, often by some of the wealthiest corporations, suggests that there are many workers who are not getting what they deserve from their employers.

Fact Number 2: CEO pay is skyrocketing. According to the AFL-CIO and Business Week, CEO pay is now 475 times the pay of the average worker, while it was only

42 times as large in ’80. The U.S. Bureau of Labor Statistics' own economists acknowledge that CEO pay and benefits in the United States are much higher than in any other country and that CEO wealth and pay has risen sharply since ’80. If CEOs, particularly CEOs of U.S. corporations, deserve such huge increases in pay and benefits, then why don't the workers who make their products deserve them as well?

Fact Number 3: Despite the booming economy and increases in productivity, workers are not being rewarded. There has not been a minimum wage increase in 3 years despite the fact that, when adjusted for inflation, the minimum wage is lower than it was in the ’60s and ’70s. In ’98 dollars, the minimum wage in ’78 would be worth $6.63, but the current minimum wage in the year 2000 is only $5.15.

In fact, all wages, not just the minimum wage, have failed to increase when adjusted for inflation. Wages were higher in the ’70s and the ’80s then they are now. Furthermore, the poverty rate in ’99, which was the lowest in the entire decade, is still higher than poverty rates from the ’70s, a period of relative economic hardship. In ’95, the Census Bureau reported that 49 million people, or almost 20 percent of the population, lived in a household whose members had difficulty satisfying basic needs. It is hard to justify stagnant wages, a low minimum wage, and economic hardship in a booming economy where productivity is up and CEO benefits and wages are skyrocketing.

It is not hard to understand why so many citizens still feel like they are falling behind. The truth is that the rising tide of the economy has not lifted all boats and inequalities are growing, not subsiding. Instead of getting another job, working longer hours, or accruing more debt in order to try and get ahead, Americans need to realize that relief from their financial problems will only come when they receive fair pay.

Workers need to realize their vital role in helping create the productive economy we are now experiencing and demand a fair piece of the pie they helped create. Anything less, including tax cuts, will not only fail to provide the economic help that is needed, but will continue to rob the working class of their rightful rewards for their hard work, rewards that has been stolen by corporate CEOs, company executives, and corporate shareholders.

Unfortunately, we live in a country that believes in an economic system that concentrates power in the hands of a few people who benefit from mass exploitation. Sadly, since our capitalist system gives the workers no power over their economic lives, the potential for the workers to successfully gain a fair share in the economy is small.

Only in a democratic socialist society will workers have the power and the means to prevent the type of exploitation and robbery we are now seeing; an exploitation rooted in the economy, not the government.

This post was written by:

Randy P. Choiniere 01 - who has written 4 posts on Dartmouth Free Press.


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