The Neoliberal Consensus Is Over

The Neoliberal Consensus Is Over

Black Friday protesters at a Phoenix, Arizona Wal-Mart, 2014 (UFCW International Union / Flickr)

On February 19, Wal-Mart announced that it would raise its minimum wage to $9. The following week, Wisconsin, the home of labor progressivism, passed right-to-work legislation. What’s going on?

Some analysts believe that Wisconsin’s action is a harbinger of things to come, while Wal-Mart’s announcement is little more than a PR move. Reality is more complex, however. Wal-Mart’s move away from its low-wages-all-the-time business model is important, and not just because other discount retailers like T.J. Maxx and Target have followed suit. Rather, I believe, the sudden move away from rock-bottom wages reflects the fact that, in the wake of the Great Recession, the left has won the battle of public opinion, bringing an end to neoliberal ideological hegemony, at least in the United States. Gone are the days when promoting corporate profits was accepted as the only possible economic development policy; now public discourse centers around issues like lagging wage growth, growing inequality, and threats to our nation’s democracy.

In the minimum wage battles fought at the state level in the November 2014 elections, labor triumphed even in red states. These victories were followed by the San Francisco City Council unanimously passing a Retail Workers’ Bill of Rights, which required chain retailers to practice fair scheduling. Paid sick leave legislation is gaining traction throughout the country, with New Jersey’s state legislature poised to enact legislation any day now. The White House is sending Secretary of Labor Thomas Perez and senior White House adviser Valerie Jarrett on a speaking tour around the country to push for paid leave.

Moreover, President Obama’s State of the Union Speech, calling for “middle-class economics” to benefit American families, showed which way the wind is blowing. Now Hillary Clinton, Wall Street’s great friend, is developing her own agenda for “Inclusive Prosperity.” A majority of House Democrats adopted the Progressive Caucus budget. Even Jeb Bush and John Boehner acknowledge that sustained prosperity is not consistent with egregious inequality. Indeed, the acknowledgement by some Republicans that inequality is a barrier to their goal of creating an economy of shared prosperity is instructive, because none of them can articulate a path from here to there. Now that trickle-down economics has lost its credibility, they have nothing to say.

Equally telling is the way that so-called free trade agreements are being managed. Back in 1993, Vice President Al Gore made a trickle-down case for NAFTA in his nationally televised debate with Ross Perot. Today, President Obama is trying to ram through the Trans-Pacific Partnership without explaining how his secretly negotiated proposal would advance American interests. His feeble statements to date have nothing to do with neoliberal ideology. Instead of explaining how freeing corporations to invest throughout the Pacific region would magically create new wealth, Obama made an entirely different argument in his State of the Union speech: the TPP would help us gain bargaining leverage against China, preventing our competitor from using a devalued currency to steal our business, he argued. Apparently, the White House recognizes that the American people are looking at trade from a nationalist perspective, rather than one based on neoliberal assumptions.

While labor’s recent successes vis-à-vis Wal-Mart and the minimum wage debates have improved the working lives of millions of Americans, it must be recognized that most of those benefiting are non-union members. Employees of Wal-Mart, Target, and McDonald’s are not union members, and they are not likely to organize any time soon. This is a paradox Harold Meyerson pointed out last fall: union policies are popular, but union power remains constrained. Attacks on public and private sector unions are draining union treasuries, and those treasuries are essential funders of the fast food, retail, paid sick leave and minimum wage campaigns. The looming prospect of a Supreme Court decision against public-sector unions frightens many union staffers. Steven Greenhouse, recently retired from the New York Times, predicted last week that the drain on union treasuries would have an immediate impact on the 2016 election.

These are serious problems, and they require creative and disciplined solutions, but we should not allow them to blind us to the opportunities presented to us by the defeat of neoliberal ideology. Wal-Mart announced just last week that it was dropping its appeal of a $7,000 fine imposed by the Occupational Safety and Health Administration for the company’s negligence in the death of worker during the Black Friday shopping rush in November 2008. Wal-Mart’s retreat, after it had spent more than $1 million in legal fees fighting the fine, symbolizes the way that federal regulation is finally challenging corporate lawbreaking, after years of impotence. Meanwhile, Obama has promised to veto the Republicans’ latest anti-labor gambit in Congress: legislation that would stop the NLRB from enforcing new rules that reduce employers’ ability to delay representation elections, a strategy that union-busting law firms often use to intimidate workers into voting against joining a union.

And that’s not all. The NLRB is also going ahead with its efforts to expand its interpretation of labor laws by defining franchisers like McDonalds as joint employers, who are responsible for the wage theft and work safety violations committed by the franchisees they control. This scenario would not have occurred at the peak of neoliberalism. Ever since Wall Street’s crimes were revealed in the wake of the financial meltdown of 2008, it’s been much harder to portray capitalists as the good guys, the job creators, the heroes of the economic battleground. Instead, they are perceived as thieves, plutocrats, climate change deniers, and enemies of public education, robber barons intent on demolishing the commonwealth so that they can make more billions from government contracts and bailouts. In the new discourse of inequality, people are talking about how to create good jobs, how to raise wages, how to outlaw outrageous bonuses, how to end corporate control of government.

There are signs that some progressives recognize we’re in a new political environment. Rand Wilson, a Service Employees International Union (SEIU) staffer who’s long been a pioneer among labor strategists, has proposed that labor respond to ALEC’s “right-to-work” offensive with an aggressive campaign of its own. Instead of trying to defend the right of unions to collect dues from members who don’t wish to be in the organization, labor should challenge the legal presumption that employers have the right to fire workers without stating a cause—the doctrine of “at-will” employment. Wilson’s argument is that while the public doesn’t really think that it’s fair that unions collect dues from unwilling members, people also don’t think that it’s fair that a boss can dismiss a good worker just because he feels like it. Wilson’s strategy is sure to be controversial among union leaders alarmed by the shrinking of their dues base, but it illustrates that there are new opportunities in this budding post-neoliberal era.

Similarly, Oregon Governor Kate Brown showed how progressives can take the offensive when it comes to voting rights last week, when she signed legislation making voter registration automatic for anyone enrolled in the state’s Department of Motor Vehicle’s system. This move could add 300,000 new voters to the Oregon electorate. It illustrates how progressives can turn around the right’s effort to disenfranchise working people.

In Congress, Connecticut Congresswoman Rosa De Lauro and New York Senator Kirsten Gillibrand have introduced the FAMILY Act, which would expand workers’ rights to family and medical leave well beyond the meager benefits included in the Family Medical Leave Act of 1993. Their proposal, backed by the National Partnership for Women and Families, labor unions, and a variety of women’s groups, would provide partial paid leave for workers who need time off for their own medical issues, or to take care of family members with health problems. Workers could receive up to 66 percent of their income for up to twelve weeks. Unlike under the 1993 legislation, employees at all companies would be covered, not just large ones. Like President Obama’s “middle-class economics” proposal in his State of the Union Speech, the FAMILY Act is based on a recognition that Americans are profoundly dissatisfied with our nation’s family-unfriendly employment policies and practices. Unions and women’s groups together can capitalize on this dissatisfaction to extend workers’ rights.

Amid these progressive initiatives, Wal-Mart’s decision to raise its workers’ wages to an inadequate $9 per hour might seem like a small victory. Nevertheless, it is important as a symbol. While Europe is still mired in debates about how to preserve the Eurozone as an instrument of austerity policy, Americans have turned the page. Progressives now fight on new terrain. The forces of the right are powerful, of course, but they are not fighting in the name of neoliberalism. It’s a new battle, and it’s one we can win.


David Bensman is Professor of Labor Studies and Employment Relations at Rutgers University. He is a contributing editor of Dissent and the author of several books, including Rusted Dreams: Hard Times in a Steel Community (with Roberta Lynch) and The Practice of Solidarity: American Hatters in the Nineteenth Century.


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