By Roger Smith
CEO, American Income Life
Labor Day 2009 is a good time to reflect on the state of America’s workers. For the millions of workers who are unemployed, underemployed or underpaid, their plight is one of empty pockets.
Nothing instills hope and optimism like the sound of change in your pocket. Nothing is more terrifying and bleak than an empty pocket and no prospect to fill it.
As a young boy living in New York, I knew the despair of empty pockets. To change my situation, I would need to be resourceful because I had no skills and no job.
I sold part of my prized collection of superhero comic books in Central Park for nickels, dimes and quarters. The sound of change in my pocket gave me a buoyancy and fervor I will never forget. I learned the value of selling my precious resource and I have carried that lesson into the workplace.
As a CEO, I have tremendous empathy for workers who are forced to sell their labor for a pittance. I have an abiding disdain for that practice and its critical role in the destruction of our middle class.
Our nation is in a downward spiral. We are a nation lost in the silence of empty pockets.
I see two ways to correct this descent.
First, give workers the right to sell their most precious resource, their labor, for a fair wage.
The free market as we know it has started a race to the bottom. Over the past 20 years, corporate productivity and profits have continued to skyrocket. Workers’ wages have remained flat and, in terms of real dollars, have decreased. A drop in union membership has adversely affected wages in every sector.
The current wage disparity between workers and the wealthy has had cataclysmic consequences for our communities. How can we continue to sustain an economy where the richest one-tenth of one percent of Americans earned more than the poorest 50 percent?
Congress should pass the Employee Free Choice Act to level the playing field for workers and create a path for workers to bargain their way back to the middle class.
Workers who create the profit should have the ability to share in that profit. On average, a union member earns 20 percent higher wages than a nonunion counterpart. A union contract puts real change into workers' pockets.
The Employee Free Choice Act guarantees a worker the right to negotiate a contract in a timely manner. This principle should never be compromised.
Second, the more money workers put into their pockets, it seems the more predatory lenders find creative ways to pick those pockets. Workers as consumers need to be protected from unregulated financial products and unscrupulous lenders who strip wealth from working families.
Because of declining wages, workers have been forced to borrow their way into making ends meet. The creation of easy but dirty credit has led to a record number of bankruptcies, home foreclosures and an endless cycle of debt. Predatory and subprime lending have crippled too many working and middle-class families.
I applaud the Obama administration’s efforts to reform financial regulation. The current regulatory rules have defined the Big Banks as “too big to fail,: and have declared workers too "little" to matter.
To date, the Big Banks and the financial industry have received $700 billion directly in rescue funds and another $10 trillion in loan assistance. The same banks that are borrowing money at less than 0.5 percent have the audacity to charge exorbitant overdraft fees, slap unwarranted double-digit increases on credit cards and refuse to cap usury fees.
The Consumer Financial Protection Agency legislation, H.R. 3126, addresses these egregious assaults on consumers. An independent stand-alone agency with the sole mission of protecting consumers provides an upshot of hope for most working Americans.
I am optimistic as both labor law reform and financial regulatory reform wind their way through Congress. I cannot predict the details of final language on either piece of legislation. I do know that we must fight for a result that puts more change in workers' pockets.
That is the sound of change we can all believe in.
Roger Smith is the CEO of American Income Life and National Income Life Insurance Co. and serves on the board of the Alliance for Retired Americans and is a consultant to Labor Council for Latin American Advancement.
