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Thursday, August 22, 2013

Democracy: A Social Power Analysis

 

The Co-Intelligence Institute



Democracy: A Social Power Analysis

By Dr. John S. Atlee, with Tom Atlee
John S. Atlee is president of the
Institute for Economic Analysis
which offers a breakthrough conceptual framework
for responsible democratic management
of national economies
We live in a world where power is very unbalanced.
Power imbalances are at the root of most social problems.
Correcting power imbalances will go a long way towards solving many problems at once.
We'd be wise to attend to this no matter what issues we work on.



Summary


When we're involved with other people (children, bosses, IRS agents) our ability to satisfy our desires (freedom) has a lot to do with how successfully we influence those people or resist their efforts to influence us in ways we don't want.
 
The ability to influence or resist is what social power is all about. People with lots of money, muscle, status, intelligence, etc., can usually successfully influence other people. In most (but, significantly, not all) circumstances, they have more social power. 
When a person or group has substantially more power than others, their relationships are not democratic. Democracy requires that social power be equal or balanced.  
Sometimes everyone having equal power doesn't make sense - like in a large company. In such circumstances, certain people may be given extra power. Such concentrated power can still be democratic, as long as those in charge are answerable to whomever they're managing and relinquish their power when duly called-upon to do so. 
The main point is this: if people are going to be affected by something, they should be able to influence or resist what happens. This doesn't mean everyone gets everything they want. It just means that people's desires should be fairly balanced with the desires of everyone else involved. Any system that ensures that kind of balance-of-power is democratic.



Democracy: A Social Power Analysis


Democracy and freedom are the central values of American society. But they've come to mean so many different things that they're almost meaningless. We find them being used to support the most anti-democratic policies. As mere propaganda slogans, they're utilized by individuals and pressure groups to lend a halo of "Americanism" to their own private conquest of an ever larger share of the people's power.

The social power analysis described in this essay provides solid, objective, social-scientific definitions of these badly-mauled terms - definitions against which to measure the propaganda of groups from the National Association of Manufacturers to the Communist Party.

The most important function of a new social theory is to provide a rationale and intellectual and moral sanction to what people are already doing - or what they want to do yet don't quite know how because it is at variance with traditional theories and institutions. This social power analysis is intended to serve that purpose for people who are concerned about the concentration and irresponsibility of power in our society. They will find it provides a framework of ideas within which they can create solutions consistent with democratic institutions and ideals.

SOCIAL POWER
 

Social power is the basic, common element in politics, economics, and all other social relationships. It is possessed by all individuals and social groups and arises out of their connections to each other. Robinson Crusoe, marooned on a desert island, didn't have to deal with it until he met Friday.
Social power has two aspects:
1) The ability to influence others so as to further our own interests or desires.
2) The ability to resist the activities of others.
In theory it is possible to be socially neutral - to further our own interests or desires in ways which do not affect other people. In practice, however, the vast majority of our activities have some social impact.

Social power comes in many forms, some of which are outlined in the box at the bottom of this page. There are many more.

SOCIAL POWER IS TRANSMUTABLE AND FLUID

Physical energy can be easily changed from heat into light, motion or electricity by the engineer. Likewise,
social power can be changed from one form into another by those who know how to use it.
And just as electricity is more easily tranformed than most other forms of physical power, so there are differences in the various forms of social power.

Which form is most transmutable depends on the circumstances. For example, in a war, physical force is probably most transmutable. In highly industrialized, interdependent money economies, financial power is usually the most transmutable.

Again like physical energy, social power may be either active or merely latent -- like the power in a taut spring or a can of gasoline.

Not infrequently possessors of social power fail to realize what power they have (e.g., India's poor, prior to being organized by Gandhi; or industrial workers prior to being organized into unions; or citizens who don't vote).

On the other hand, what seems like great social power is often based mainly on bluff, its effectiveness due to the ignorance or false beliefs of those over whom it is exercised. This is most obvious in games like poker, but it is a basic element in all power strategy, whether military, business, or political. This has been a chief reason for the lavish costumes, pageantry and ritual of authoritarian ruling groups throughout history. It's a major reason why knowledge is such an important form of power - to reveal the hidden weaknesses and bluffs of powerholders.

POWER DOESN'T COME IN SEPARATE PIECES

One of the commonest mistakes made by those attempting to analyze social power is thinking solely in terms of the individual forms of power. In the real social world these interlock and ramify in so many directions that it is almost impossible to isolate them. Social power usually occurs in big chunks, organized into systems or structures of power - family, community, religion, interest group, class, movement, political party, etc.

The individual forms of power are important chiefly as the instruments of power strategy, manipulated by competitors for social power as generals manipulate soliders, supplies and weapons.
No one form of power is "best." Forms of power - and strategies for using them - are best chosen in response to specific circumstances.
A champion prize fighter wouldn't necessarily have much power in a chess tournament, nor a college president on a battlefield.

The social power possessed by any individual or group cannot be adequately evaluated by the mere sum of individual forms of power possessed - even where they can be added up. With social power, as with most other social phenomena, the whole is often greater (or less) than the sum of its parts, and is often different in kind. When one person becomes wealthy and another poor, there usually develops a greater difference between their relative social power than can be measured solely by their respective fortunes. This social truth underlies the Biblical saying, "To him who hath shall be given; from him who hath not, even that which he hath shall be taken away."

On the other hand, going to the other extreme and lumping all forms of social power together into a single concept such as social class also leads to errors of social analysis.

FREEDOM
 

Freedom does not exist in any absolute form. It exists only in relation to our desires and our ability to satisfy them. People generally become conscious of freedom as a political problem or objective only when a gap develops between their desires and their ability to satisfy them.

Although most people think of freedom as an absence of restrictions, that is only one facet of it.
Real freedom is the ability to satisfy our desires. It has three aspects:
1) AWARENESS: Knowledge and recognition of our desires and of possibilities for expressing and fulfilling them. 
2) "FREEDOM TO": Availability of means and opportunities (including the statistical probability) for satisfying our desires. 
3) "FREEDOM FROM": The absence of restrictions, coercion, and other factors blocking self-determined realization of our desires.
These three aspects of freedom are inseparable; there can be no real freedom unless all three are present.
Freedom is intimately related to social power. On the one hand, social power usually generates greater freedom for whoever uses it. On the other, patterns of freedom greatly influence the extent to which various forms of social power can be exercised.

There are objective and subjective dimensions to freedom.
Most people believe they have more or less freedom than they actually have, and these delusions are manipulated by social powerholders to influence public behavior.
"Empowering" or "radicalizing" people often involves helping them discover the actual patterns of power and freedom in their lives.

SOME INSIDIOUS RESTRICTIONS ON FREEDOM

Statistical improbability: Everyone may be free to enter a lottery, but they don't really have freedom to win. With a limited number of prizes, many are forced to be losers. Likewise, to the extent there is high unemployment, workers are not truly free to work, but are forced by necessity to enter a "game" in which they have a high chance of losing. Saying that "every man is free to own his own business" is a lie when 80% of adults work for a wage or salary. In these cases, there aren't enough opportunties to make these "freedoms" realistic.

Practical social necessity: There are many extended families with ten or more children in the world whose main breadwinner gets only a few dollars a day. The children have to start work as soon as they are able. To say these children have "freedom" to get an education would be ironical.

Ignorance of opportunity: Children with great musical talent who grow up without hearing good music or knowing where to get a musical instrument don't realistically have "freedom" to develop their talent.

Private coercion: Coercion and restrictions by government have traditionally been recognized as basic limitations on individual freedom. But coercion by private individuals and groups can be equally serious. If thieves were free to steal, there would be no freedom of property ownership. When employers hire thugs to beat up union organizers, there is no freedom of union organizing.

Threatening environments: Widespread crime, pollution, militarism, homelessness, racial and sexual abuse, and so on, can make streets, communities, even food, air and water seem dangerous. People "hole up" in their homes. They don't know what's safe to do so they don't do anything. When parents or spouses become threatening, even homes can be dangerous, causing people to withdraw even further, into their frightened minds. Despite all the VCRs, water purifiers, and shopping malls, we can question how "free" people are to enjoy life.

Controlled options: People often feel like they are free to choose, even though the options presented to them were created by someone else. Many supermarkets, for example, have thousands of products, none of which are organic. Shoppers experience the wide variety as freeing them to choose. Very few of them experience the omission of organic foods as a limitation.

Stimulus-response manipulation: Psychologists, con men, and PR professionals have developed powerful technologies of manipulation that can cause people to act for reasons that are outside their control or awareness. People can think they are behaving freely and rationally when actually they are being heavily influenced by "compliance professionals." (See INFLUENCE, by Robert B. Cialdini [1984] for a fascinating introduction to this subject.)

FREEDOM AND SOCIAL POWER

There is no such thing as absolute freedom. Freedom is a function of social power. There is only freedom for particular individuals and groups to do certain things.

Where there are fundamentally opposing interests, an increase in the power (and freedom) of one individual or group necessarily means a relative decrease in the power (and freedom) of the others.

Unemployment increases the freedom of employers to get their pick of job applicants, to pay low wages, and to avoid protests from workers. For the same reasons, unemployment decreases the freedom of workers. Likewise in a drought in India, thousands of peasants may starve while grain merchants get rich.
The total amount of freedom existing in a society as a whole depends on the overall distribution of social power. A free society is not achieved by trying to maximize the freedom of people as individuals, but by pursuing a balance or equality of social power among all individuals.
This is because our individual freedom is necessarily limited by our living with each other in society.

Traffic lights offer an excellent illustration of this. If a new traffic light is set up at an intersection, does it increase or decrease freedom? You have to stop if the light is red. On the other hand, if it is a busy intersection, you'd have to stop anyway to avoid accidents. Now while the light is green you are free to go through without stopping. If both streets are busy thoroughfares, with equal amounts of traffic, the new light would obviously increase the net amount of freedom for everybody.

But what if one road were a busy superhighway and the other a small country road with only a few cars which had to wait half an hour for an opportunity to cross? Maybe the freedom of the minority should be given consideration by a light which stopped the superhighway traffic for brief periods at infrequent intervals. The timing of the light would make the difference. Or the total amount of freedom might be still further increased by constructing an overpass.

Freedom, like social power, depends on circumstances. What increases freedom in the country may restrict it in the city. What increases freedom in self-sufficient economies may limit it in interdependent industrial societies. Restrictions on individual freedom tend to increase as societies become more populous and integrated, in order to preserve the maximum possible freedom for all.

DEMOCRACY


FREEDOM AND DEMOCRACY ARE INSEPARABLE
Restrictions on individual freedom increase overall social freedom when they are self-imposed by those over whom they are exercised and when they apply equally to all members of society.
That is, restrictions increase freedom when they are democratically established and administered.

This can only happen where there is relative equality of social power in horizontal social relationships and responsibility of social power in vertical relationships (i.e, between those exercising any concentrated power and those over whom it is exercised).

Freedom and democracy are inseparable for three reasons:
  • Both depend on equality of social power.
  • Through using their democratic institutions people can protect their freedom.
  • Through exercising their freedom people can protect their democratic institutions.
Consequently the two words are, in this social power analysis, interchangeable.
You can tell both how free and how democratic a society is by observing the extent to which its people can satisfy their wants through their existing social organization within the limitations of their environment.

WHAT IS DEMOCRACY?

Democracy is based on a faith in people - in the dignity and worth of the individual and in our shared humanity. It assumes that the basic objective of social action should be the welfare and happiness of the greatest number of people.
Democracy assumes that average citizens - with adequate education, information and institutions - will do a better job governing themselves and their communities, in the long run, than dictators and oligarchs.
Democracy is best defined as a society in which all social power is held by or is effectively responsible to the people over whom it is exercised.
This implies an even briefer definition:
Democracy is a society characterized by equality of social power.
Democracy is not merely a form of government, but a kind of society. Effective democracy requires democratic control of all social power, not merely government power.

Because government has the power to determine the rules governing the distribution of social power, democratic government institutions have historically - and rightly - been considered the keystone in the structure of democratic society. But voting is only one form of social power and representatives represent whatever power puts them in office. If political campaign expenses are paid by the wealthy, then that's who politicians listen to.

The vote alone is relatively ineffective unless there is also equality of other forms of social power, such as knowledge. Voters must have ways of learning about candidates and issues and when the media are controlled, once again, by those with money, then the ballot can't fulfill its democratic function.

These frustrations of the popular will - and the consequent popular dissatisfaction with the workings of the system - are signs that it is time to redistribute social power.

EQUALITY

What are we talking about when we say that equality is a basic requirement for effective democracy? Do we mean equality of income? No - most of us are willing to grant a higher income to those who contribute more valuable services to society. Equality of wealth? Perhaps, but how can we prevent inequality of income from leading to inequality of wealth? Equality before the law? Yes, definitely; but to be effective this depends on equality in other forms of social power, such as money to hire a lawyer. Equality of opportunity? Yes, certainly; but in practice does this mean opportunity for the wolf or opportunity for the sheep?

The Declaration of Independence says that "all men are created equal" - equal in the sight of God as members of the human race - as people. This is the essence of democratic society. Obviously all people aren't created equal in musical ability. Or mechanical ability. Or physical strength. Or even intellectual ability (whatever that means). Nor is there any agreed-upon way to add up the various inherited abilities of an individual to get their total "ability."

The greatest inequalities between individuals are not in their inherited characteristics, which are relatively unchangeable, but in the characteristics they acquire from their social environment as they grow up and take their place in society - personality, education, experience, wealth, contacts, etc. These things give people most of the social power they have.
The equality required by democracy is equality of social power. This doesn't mean there should - or could - be equality between all individuals in income or social position or any other particular form of social power. It means merely that there must be equality in the total complex of social power. Weakness in one form of power must be counterbalanced by strength in other forms. Nature offers us a model for such democratic balancing of power: Who can say which is more powerful - the panther, the skunk or the turtle?

Only a few people want to control or exploit others. Most people just want to live their lives in peace and security as respected members of their community. Consequently, to keep power-hungry people from unduly interfering in the lives of everyone else, defensive forms of social power are especially important in achieving an equally balanced distribution.
"Political democracy," "social democracy" and "economic democracy" are only meaningful in emphasizing single aspects of the total structure of social power. In reality these aspects are interdependent. Democracy is indivisible; it is a condition of the whole society. Power is fluid and transmutable. If there is concentrated, irresponsible power in some aspect of society, it will soon, like an insidious cancer, permeate the whole society.

INSTITUTIONAL KEYS TO DEMOCRACY
 

The distribution of social power is determined by our social institutions - laws, customs, forms of social organization.
Democracy is only possible where social institutions are designed to achieve and maintain equality of social power. There are three techniques to achieve this:
1) Diffusion of power (direct equality)
2) Constitutional responsibility of power (indirect equality: accountability)
3) Institutional checks and balances of power.
While these principles are part of our political tradition, we have yet to institutionalize them for all forms of social power in our society. And that is why we cannot even adequately maintain them in our political institutions.
Let's look at each one in more detail.

DIFFUSION OF POWER
The ideal of Jeffersonian democracy was to distribute power so widely and, through institutional safeguards, to KEEP it so diffuse that no individual or small group could exercise significant power over the rest of society.
Frontier American society - based upon individual land ownership by economically independent and largely self-sufficient farmers - approached this ideal very closely. Backing up his economic independence with his long-barrelled rifle, the typical American of 1787 had a great deal of social power. It was not power over other people, but bargaining power, the power of real alternatives, and the power to resist outside intervention. To put it crudely, he could tell the whole outside world to "go to Hell" without fear of serious reprisals.

Jefferson feared the development of industry and great cities because he realized that they must inevitably lead to increasing concentration of social power, both economic and governmental. Sure enough, the Industrial Revolution brought with it previously undreamed-of possibilities for concentration of social power. Mass production required concentrated economic power, and Big Business brought with it Big Labor and Big Government.

Today we live in a crowded, highly interdependent society in which few of us have much social power of our own. Our basic economic independence and security are gone. Most of us work for someone else and power-diffusing economic competition is kept within "comfortable" bounds by the few companies that dominate each industry.

If direct dispersion of power were the only way democracy could be realized, there would be little hope for it in modern industrial society. Luckily there are other principles upon which we can rely to achieve social power equity, principles we can find in the U. S. Constitution.

CONSTITUTIONAL RESPONSIBILITY OF POWER
Wherever social power becomes highly concentrated, the democratic principle of equality can only be maintained by making this concentrated power CONSTITUTIONALLY RESPONSIBLE to those over whom it is exercised. ("Responsible" here means "answerable" or "accountable.")
In 1787 the framers of the Constitution - familiar with both the irresponsible power of the King and the failure of the weak Articles of Confederation - set up a system of government power concentrated enough to provide for the economic development and security of the nation yet constitutionally responsible to the people of the country.

When citizens delegate their sovereign power to their representatives by means of their vote, they don't lose that power. At each new election they take it back and re-delegate it. They can even exercise their power between elections, using recall and impeachment provisions.

The test of constitutional responsibility of power is whether it is really controlled by those over whom it is exercised and whether they can take it back through normal, legal, institutionalized procedures. If this is not the case, then the concentrated power is constitutionally irresponsible.

This has nothing to do whether the power is religiously or morally responsible. There have been benevolent dictators, kings and popes who were accountable to their consciences and not to the people. Although under some of the best of them people may have been happier than under the flounderings of a popular democracy, such idyllic conditions seldom outlasted their reigns, if even that long.

While moral responsibility is a wonderful thing, it is no substitute for constitutional responsibility. From a social power perspective, any power that is not constitutionally responsible is considered irresponsible. And all irresponsible power is dangerous, although it may be tolerable if it is not concentrated. Likewise all concentrated power is dangerous - although it is often useful and, if constitutionally responsible, is compatible with democracy.
Social power becomes really destructive of democracy only when it is both concentrated and irresponsible.
When concentrated power is made constitutionally responsible, the lines of responsibility must flow, directly or indirectly, to those over whom the power is exercised.

Power which is national in effect must be responsible to all citizens; power which affects only a limited area or interest group should be answerable only to that particular area or interest group. This is the basic principle of FEDERALISM - the constitutional decentralization of power. While this is often difficult to apply in practice, it is vital to democracy and must be kept clearly in mind.

INSTITUTIONAL CHECKS AND BALANCES

Constitutional responsibility, while vital, is insufficient to restrain abuse by concentrated power in real life.
There must be explicit constitutional limits, or checks, on concentrated power, such as the Bill of Rights. And those checks will only remain effective where there is some countervailing power to enforce them. Thus every concentrated power should be balanced by some other concentrated power.
In order to prevent any particular part of the government system from grasping excessive power and nullifying the constitutional checks, the framers of the constitution divided power between the legislative, executive and judicial branches, and between the federal, state and local levels of government. Each power center in the system was thus balanced by others with a different focus of power and interests.

These constitutional checks and balances, however, were all directed at the control of government power. This was appropriate for the era in which the Constitution was written. However, by the end of the Civil War, economic power became concentrated into great corporate trusts under the leadership of the "robber barons" of American industry and finance, and government power ceased to be the main problem of American democracy.

In the last century the regulation and active redistribution of social power has become a major government activity and has greatly increased the size and power of government. When economic powerholders complain about "big government," this is the aspect of government that bothers them.

In modern societies many institutions can and do check and counter-balance concentrated governmental and economic power.
  • Free public education means that knowledge-power is widely diffused among the people.
  • Laws like the Freedom of Information Act offer vital knowledge-power to citizens.
  • The system of civil law allows citizen groups to check both government and corporate power abuses.
As we become less economically independent and less individually powerful compared with centralized governmental and economic powerholders, we increasing turn to organizations as a means of combining our little power with the little power of other individuals in joint action. The organizational form of power becomes of the utmost importance. We see this in:
  • Labor unions, farm organizations, consumer cooperative societies, professional organizations, and interest groups.
While such groups are the chief organizational balances in democratic society, they have several weaknesses. First, they are frequently quite undemocratic internally. Second, their membership is far too limited, causing power inequities between members and non-members. And thirdly, they often act as pressure groups, creating impacts on areas of society to which they are not constitutionally responsible. Interest groups, corporations, etc., should not be able to exercise predominant influence in the making of decisions which are of greater interest to other groups or to the society as a whole.
We could summarize the major task in democratizing our society as one of increasing internal and external constitutional responsibility of both governments and corporations - and the many groups that constitute the countervailing powers to them - with particular attention to the media, which connects them all and impacts everyone.
Our goal would be to balance the power of all groups so that there is general equality of social power between individuals regardless of the groups to which they belong. Then we will have a real democracy.
 

THE FUTURE BELONGS TO DEMOCRACY
 

Industrialism, which gave birth to unprecedented concentrations of economic power, has generated, as well, a dynamic towards democracy.

Industrial civilization has required a high degree of popular education. Education, in turn, has brought widespread recognition of the possibility of democracy, thus creating a desire for it which, by its nature, tends to remain insatiable until it is achieved.

Furthermore, industrialism has been based on the scientific method, not only in its pursuit of physical technology but in the social organization of production. Science has a habit of prefering workability to ideology and is thus a close cousin of democracy. Democracy is fundamentally utilitarian in its pursuit of the welfare of its citizens and science requires freedom in order to do its work. It is significant that many leaders of recent democratic movements have been scientists.
Finally, more and more industrial psychologists and organizational development experts have, since the early 1930s, been finding that democratic participation by workers in enterprises where they work results in increased efficiency, lower costs, and the generation of profitable initiatives. In our increasingly competitive global market, businesses will be forced to move in this direction. The impact of democratization of the workplace is incalculable.

These factors alone may make democracy inevitable.

The democratization of societies, combined with modern technologies that make earth a "global village," makes it possible to envision a single democratic society encompassing the whole world. A democratic federal world government could be developed out of our present international organizations. The urgency and transnational nature of today's economic and ecological crises, combined with the potential totality of modern warfare, could certainly provide the necessary impetus. And the possibility of millions of people, for the first time in history, having adequate leisure to become politically informed and active provides the opportunity for change - an opportunity that must be taken, of course, if this dream is to be realized.

The centuries-long cycle of concentration, corruption, redistribution and renewed concentration of social power can be broken. Democracy won't end humanity's history of conflict, but it can provide the institutional framework in which conflicts are settled nonviolently and in which concentrations of irresponsible power are consciously prevented before they can become dangerous.

Governments must either move ahead and continually reconstruct their societies along democratic lines, and thus receive the active support of the majority, or they must conciliate groups who hold concentrated irresponsible power and thus lose the active support of the majority, creating popular opposition which will inevitably overthrow them.

Only a society based on a democratic structure of power can endure in the long run. If our world is to survive, it will survive as a democracy.

-From an unpublished 1952 manuscript by economist and activist John Atlee that was the beginning of a more ambitious work. It has been revised, condensed and edited by Tom Atlee for Thinkpeace Issue 37/38 July 24, 1992. The theoretical framework and the major ideas presented here are John Atlee's. His economics website is http://www.iea-macro-economics.org/index.html .




SOME FORMS OF SOCIAL POWER


  • Economic power
    • Industrial or productive power to control production, resources and labor
    • Financial power to buy or control things with money or credit
    • Market power to influence consumption, production, prices, wages or other market conditions.
  • Governmental power
    • Legislative power to make the rules governing the acquisition, distribution and use of social power
    • Police power to enforce laws or the interests of powerholders
    • Judicial power to make judgments about the use and balance of social power
    • Regulatory power to supervise economic and political activities
    • Bureaucratic power to enable or resist the implementation of policies
  • Physical power
    • Physical force, violence and the threat of violence to coerce the behavior of others
  • Political power
    • Organizational power to coordinate the actions of many people
    • Propaganda power to influence public opinion, motivation and experience of reality
  • Media power
    • Media power to influence or control information and communication and people's ability to give and receive them
  • Knowledge power
    • Knowledge to comprehend circumstances, to predict and plan, and to create effects - particularly by knowing how to use other forms of power
  • Personal power
    • Leadership to motivate and coordinate other people
    • Persuasion to mobilize people's awareness and opinions
    • Energy and initiative to begin and carry out activities
    • Intelligence to comprehend meaning and solve problems
    • Technical skill to manipulate physical resources and barriers
    • Love to encourage people to drop their defenses, to respond and grow
    • Integrity to inspire reciprocal honesty, loyalty and support
    • Ambition to motivate the accumulation and use of social power
    • Strategic and tactical skill to create and utilize situations to best advantage
    • Inspirational ability to motivate people and bring out their best
  • Situational power
    • Security to give bargaining power & freedom to maneuver
    • Advantageous position from which to use other forms of power
    • Invisibility and secrecy to limit others' ability to interfere
  • Cultural and institutional power (can be used but not possessed)
    • Social institutions and traditions define the context in which power is exercised
    • Laws and constitutions define the limits and channels of power
    • Ideas provide a focus around which to mobilize people, and a direction to go
    • Public opinion constitutes the extent of popular support or opposition
 




Friday, August 9, 2013

McDonalds Can Afford To Pay Its American Workers Significantly More





McDonald's profit margins at company-owned restaurants are higher in Europe than in the U.S. despite many countries there having a higher minimum wage.

 
 
Photo Credit: Bruce Marlin: McDonalds museum 


 
The following was originally published on ThinkProgress.org.


While the average McDonalds employee in the United States makes just above the $7.25 minimum wage, that story is different in other countries. As Jordan Weissmann reports at The Atlantic, the minimum wage for full-time adult workers in Australia is $14.50 and McDonalds employees just negotiated a 15 percent raise by 2016. Yet the company has about 900 locations in the country.
Meanwhile, its profit margins at company-owned restaurants are higher in Europe than in the U.S. despite many countries there having a higher minimum wage. France’s minimum is about $12 an hour, and yet there are more than 1,200 locations there.

Residents of other countries pay more for their Big Macs, in part at least to make up for those extra costs, but the increase in prices is not drastic. Australians paid an average of $4.62 in U.S. dollars for a Big Mac in July and it cost $4.66 in the eurozone, while Americans paid $4.56. That’s a difference of about 6 to 10 extra cents, which would mean raising Big Mac prices a little over 2 percent in the U.S. to come equal with those in Europe.

Higher prices are related to the fact that the company does spend more on the cost of labor in other countries. In the U.S., it spends about 25 percent of its expenses on workers at the locations it owns, and franchises usually assume labor costs will take up about 30 to 35 percent. Worldwide, those costs have been found to come to closer to 45 percent of expenses. But the company reported nearly $5.5 billion in net income overall last year, up from about $2.4 billion in 2007, with more revenues coming from Europe than the U.S.

Australian locations have other ways to keep labor costs low, like exploiting a loophole that only requires an $8 wage for teenagers. Weissmann also reports that the company likely gives its higher paid European employees more responsibility and so ekes out more productivity from those workers. While productivity has risen in the U.S., wages haven’t.

But it’s clear, even to the company itself, that its American wages are not enough to get by on. It released a sample budget for employees that suggested paying nothing for heat, getting a second job, and spending just $20 a month on health care. While it claims to be an above minimum wage employer in the U.S., its average wages are mere cents more.

The inability to get by on its low wages has sparked pushback from workers across the country, with fast food workers striking in nine different cities. They are calling for a $15 minimum wage, the same as Australia’s, which is higher than President Obama’s $9 an hour proposal and Congressional Democrats’ of $10.10 an hour.

Byrce Covert is the Economic Policy Editor for ThinkProgress. She was previously editor of the Roosevelt Institute’s Next New Deal blog and a senior communications officer. She is also a contributor for The Nation and was previously a contributor for ForbesWoman.

Sunday, August 4, 2013

All-In Nation: An America that Works for All






All-In Nation: An America that Works for All

 

Immigration reform
SOURCE: AP/Charles Dharapak

    All-In Nation: An America that Works for All
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All-In Nation: An America that Works for All is a collaboration between the Center for American Progress and PolicyLink. To download individual chapters and essays, or view additional materials related to the book, please visit www.allinnation.org.

Executive Summary

By Vanessa Cárdenas and Julie Ajinkya

America is at a juncture. We are a nation confronting issues that go to the core of our values: What do we do about the growing inequality in the United States today? How do we maintain and grow a sustainable middle class while creating pathways to the middle class for those living in poverty? How do we ensure that we take care of our elders with dignity and respect? And how do we provide a clear and timely pathway to citizenship for immigrants that is both fair and just?

The backdrop to these policy concerns is the inexorable demographic shift that is taking place in the United States. Today the majority of our children under the age of 1 are of color, and before we reach the end of this decade, more than half of all youth will be of color. Yet communities of color continue to face longstanding barriers on the economic, educational, and social fronts. Consider this statistic: By 2018, 45 percent of all jobs will require an associate’s degree or higher. Yet today, only 27 percent of African Americans, 26 percent of U.S.-born Latinos, and 14 percent of Latino immigrants have that level of education.

The challenge in front of us is clear: How do we maintain our standing as a country of opportunity and upward mobility, ensuring that today’s and future generations of Americans have the tools and skills to succeed?

Yet with every challenge, there is also an opportunity. Our growing diverse population offers us advantages that other nations don’t have—specifically human capital, which is the greatest asset of any economy. And unlike other countries such as Russia, Germany, and Japan, our population is growing thanks almost entirely to communities of color. Diversity drives innovation, encourages entrepreneurship, and creates new markets. What’s more, our growing diverse communities can provide us an unparalleled advantage in an increasingly global economy. Thus, underlying the story of racial inequity, there is a greater story that has as its protagonist a young and vibrant population—youth of color—that is ready to maximize opportunities, provided they have the tools to succeed.

All-In Nation highlights the economic benefits of ensuring the success of communities of color. Groundbreaking analysis presented here estimates gains on a set of five economic indicators if Americans were able to eliminate racial and ethnic disparities that perpetuate inequality in our nation today. If racial and ethnic differences were eliminated, the average total personal income in 2011 would have been 8.1 percent higher; our gross domestic product would have been at least $1.2 trillion higher; 13 million people would have been lifted out of poverty; federal, state, and local tax revenue would have increased by $192 billion; and the long-run deficit in Social Security would be reduced by more than 10 percent.

This is what compels the Center for American Progress and PolicyLink to present All-In Nation: An America that Works for All—the need to implement an equity policy agenda that reduces inequality and manifests the potential of our diverse population.

The need is urgent: If we do not change course and invest in strengthening communities of color and other communities that have been left behind, our middle class will continue to erode and our nation will be unprepared to successfully compete in the global economy. We must intentionally create an All-In Nation—ensuring opportunity for everyone and securing America’s economic future.

This book lays the groundwork for federal policies that would create a more equitable economy and a more equitable nation. The chapters herein all make the fundamental argument that such policies are an economic imperative for our nation. Spanning multiple policy arenas, from education and workforce development to democratic participation, the policy recommendations are all made with the goal of ensuring that all Americans, regardless of their racial or ethnic background and circumstance, class standing, or neighborhood of residence, can have a fair and unfettered chance to succeed and contribute to the well-being of our economy and our democracy.

The opening chapter, “Creating an All-In Nation,” introduces the foundational premise of this book by explaining how our nation has historically worked toward including those who were previously marginalized, and why increasing diversity should be understood as an economic opportunity to be fully embraced. While inequity poses economic risks to our future prosperity, diversity produces innovation, creates new businesses that perform better, and generates new markets and consumer bases. This chapter presents a guiding vision, a new narrative, and a framework for directing the development of an All-In Nation.

The discussion turns next to the economic imperative of reducing racial and ethnic gaps. The “America’s Future Workforce” chapter argues that better preparing our diverse population with education and training opportunities is critical for our nation’s economic competitiveness. Without all hands on deck, our nation will not be able to count on future economic prosperity.

The ensuing chapters lay out a progressive policy agenda in key areas: infrastructure; jobs and the economy; health care and healthy communities; education and workforce development; immigration; criminal justice; and democratic participation.

Each policy chapter is introduced with a personal essay written by a public figure, explaining how he or she came to understand the urgency of taking bold action—from renowned educator Geoffrey Canada’s moving account of why every child deserves to succeed, to jurist and activist Michelle Alexander’s description of how her own treatment of a young black man changed the way she thought about criminal justice and race, to actress and community organizer America Ferrera explaining the importance of voting, and many others. Each essayist shares deeply personal convictions about why they believe our nation needs to change course.

Infrastructure: Supporting Communities So All Can Thrive” explains the importance of modernizing our public infrastructure system so that communities of color are not left lacking the basics that so many Americans take for granted and can take advantage of the jobs and economic opportunities associated with infrastructure maintenance and development. Infrastructure deficiencies in urban and rural communities of color often stem from years of inequitable and discriminatory land-use planning, yet sound investments have been shown to transform neglected and struggling communities into healthy, thriving neighborhoods by linking them more firmly to their regional economies.

Jobs, Income and Assets: Economic Security for All” argues that national economic growth relies on individual economic security—having enough money to cover a family’s basic needs and sufficient savings or assets to invest in its future. Yet economic security has become increasingly elusive for far too many Americans and for people of color in particular. In order to increase economic security, our national economic policies must focus on creating good, family-supporting jobs; building a strong workforce and a growing base of entrepreneurs; and strengthening the nation’s capacity to innovate and produce.

Building Healthy Communities for a Healthy Nation” relays the tremendous influence a seemingly inconsequential ZIP code has in determining whether an individual will be healthy or sick, or even how long he or she will live. Due to historic patterns of racism and disinvestment, the neighborhoods where people of color live tend to have fewer of the resources and opportunities that promote good health—including grocery stores, farmers’ markets, quality health care, and safe streets and parks—although these neighborhoods have more fast food outlets, liquor stores, and pollution sources, which lead to preventable health problems. The nation’s future depends on putting everyone on a path to good health by ensuring high-quality health care for all and by expanding “healthy communities” strategies that make neighborhoods healthier places to live, work, learn, play, and prevent people from getting sick in the first place.

Education and Job Readiness for a Prosperous America” warns that the United States is losing its competitive edge globally because our education system is failing a sizable group of students, namely those of color. To have the world-class workforce we will need for future prosperity, we must arm schools with a steady pipeline of effective teachers, sufficient funding and learning time, and college-ready standards. We must also make sure that we expand workforce opportunities available to students while they are in school as well as hard-to-reach adult populations in order to ensure they are well positioned for gainful employment.

Americans in Waiting: An Immigration System that Works” describes the central role that immigrants play in our economy. For those who are currently undocumented, the social and economic benefits that come with a road map to full citizenship are shown to go a long way toward fixing our nation’s deeply flawed immigration system. And for those who are authorized to be here, it is still important to implement policies that lead to full integration and encourage participation—on the job, in schools, and at the voting booth. Immigrant incorporation and integration constantly test and ultimately strengthen our nation’s commitment to its core values of equality, freedom, and opportunity.

Locked-Up Potential” reminds the reader of the nation’s badly broken criminal justice system. Despite the fact that violent crime rates are at historic lows, mass incarceration has spiraled out of control, leading to a system of racial disenfranchisement that perpetuates inequality as well as an unsustainable level of corrections spending that diverts money from important institutions such as hospitals, universities, and key national priorities. The federal government should learn from state innovations that have reduced corrections spending and establish a policy framework that encourages our criminal-justice system to promote rehabilitation instead of punishment, productivity instead of decline, and equity instead of the racial- and income-based disparities that now run rampant.

Democratic Participation and Leadership in a Diverse Nation” describes the need to reinvigorate our democracy by encouraging the formation of institutions that are more inclusive of our increasingly diverse population’s needs and interests. Communities of color continue to face barriers to democratic participation such as voter repression, limited access to leadership positions, and naturalization obstacles for immigrants that have historically prevented them from helping to shape our institutions of governance and civic engagement. These communities are key to support an equitable policy agenda focused on investments that would strengthen the middle class, including a fair tax plan, affordable health coverage, and improved public education.

Each policy chapter concludes with specific policy recommendations that the federal government can take action on today to help reduce barriers that prevent all Americans from contributing fruitfully to our economy and democracy. Often inspired by innovations already occurring at the state and local level, these recommendations create a policy framework for Congress and the administration to build a fairer and more vital economy and nation.

The analysis and policy recommendations in this book create a framework for manifesting an All-In Nation. CAP and PolicyLink hope that this book compels immediate action by Congress and the administration and that it will jumpstart a local and national conversation about a new pathway to a strong and equitable future.

At this crossroads moment All-In Nation points the way to a future where individual freedom is enhanced, shared prosperity is ensured, and, in the words of famed American writer and historian James Truslow Adams, “a land in which life should be better and richer and fuller for everyone.”

To download individual chapters and essays, or view additional materials related to the book, please visit www.allinnation.org.

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