Jul 22 2008
08:16 am

Now that the United States manufacturing base has eroded to next to nothing, and with the sharp spikes in the price of commodity items (owing largely to the fact that these are priced in heavily devalued dollars in commodity markets), the latest economic crisis is causing acute pain in the service industry.

What does it take to raise our collective consciousness about this? Well, it appears to be that Starbucks is poised to create what amounts to an inconvenience for many - having to drive out of the way to get a cup of second-rate, boutique-brewed coffee. This is not to trivialize the experience of the people losing their jobs; however, it does point up the sort of thing that will stir the populace into action.

I sort of had to laugh when I found out that people were organizing to "Save Our Starbucks," as if a community would be endangered by such an economic sucker punch. Could it possibly be that Starbucks has overextended itself, has become a victim of its own exuberance, and that they have passed the point of market saturation in many locales?

Never mind that businesses that have had major presence in Tennessee, such as Murray or Carrier or White Lily or Electrolux or Whirlpool or Modine or Superior Industries or Brown Shoe Company or Aleris or Horace Small Apparel or Huttig or Federal-Mogul or Siegel-Robert Automotive South or Eastman Chemical or GM/Saturn or La-Z-Boy or RH Donnelly or Goodyear or JC Penney or Paccar or Fedders or Levi Strauss have reduced or eliminated thousands of good paying jobs over the last decade...

And it occurs to me: We, as a country, don't really make goods anymore. We make coffee.

That's pretty weak tea for what used to be the most developed country in the world.

RayCapps's picture

One question...

I realize it would be a pointless waste of time to debate the relative economic merits of the loss of low-skilled, labor intensive manufacturing jobs in commoditized industries, so I won't.

I realize it would be pointless to point out that nations like Japan and South Korea and Taiwan have taken these same low-skilled manufacturing jobs and used them to develop first world economies, then promptly also exported them to still impoverished nations. So I won't.

I will ask one question that ought to have some merit on this board. As our nation continues to split into two very distinct economic classes - those with very high paying jobs requiring a great deal of specialized education and those with very low paying jobs in the service industry - why aren't progressives expending more energies toward organizing service industry labor? Just as unionization was the only effective way of securing the economic leverage required to obtain decent living wages, benefits, and protections for unskilled manufacturing jobs, it is also the only effective way of doing the same for sevice industry jobs. Where the heck are the progressives on this front? The AFL-CIO continues to slip further into irrelevancy. The Democratic Party continues to focus on measures that do far more to help already organized labor than measures that would speed organization within the service industries. And progressives seem content to bitch and moan and wax nostalgic about an era that was already disappearing into history 35 years ago. If you want to wage a meaningful war against the overly pro-corporate Republican Party, the service industry is the right battleground.

R. Neal's picture

Andy: Hell yeah! Ray: SEIU

Andy: Hell yeah!

Ray: SEIU has a huge influence in the Democratic Party. They are also advocating for health care reform.

RayCapps's picture

Mr. Neal...

You pulled for your example of service industry influence one of the most highly educated and best compensated professions in the service industry? Given the acute shortage of nurses (a problem nowhere near peaking), these workers are already holding all the cards. You can't just fire a slightly disruptive nurse and plug in a new one the next day with no drop-off in productivity.

But sticking within that broad area of direct health care providers, certified nursing assistants, orderlies, transporters, and mental health workers would be closer to what I'm talking about in my overlong screed above. What percentage of these workers are organized? They have almost no economic leverage individually against their employers. The SEIU ostensibly covers all healthcare workers, but outside of RN's (who already have leverage), their successes have been very limited, no? There's a huge amount of work to be done for these high school educated (at best), low skilled service industry employees. You hear the occasional grumblings about Wal-Mart from the left, but as an outsider, I'm astounded that these workers and the millions like them aren't the number one economic concern and priority of American progressives.

Instead, it's all about the evils of globalization and the glories of mercantilism from the left and certain more reactionary elements of the right as well. Globalization is big and scary and disruptive. I get that. Like just about every other major trend in human history, it's gots lots to love and lots to hate about it. You can cherry pick your examples to make it look like the greatest evil or the greatest good in human history. To see the flip side of the competing propaganda efforts, just look at the numbers coming out of the World Bank (yeah, I know who the current president of that entity is). 635 million Chinese have moved above internation poverty levels since 1978. How many in India? Indonesia? One thing I do believe, though, like just about every other major trend in human history, if you're fighting to roll it back, you're only sure of one thing - you're on the losing side. Someday, perhaps, the cost of transportation will become so prohibitive that globalization collapses onto itself. More than likely, though, it's just going to roll on until the next major trend supplants it. Maybe a little less time tilting at windmills and a little more time organizing unskilled, low paid employees? Just a little?

lovable liberal's picture

I was going to say: Beats

I was going to say: Beats the hell out of flipping burgers.

But I see the conversation is serious.

Low skill, low wage service jobs need unions for the sake of their members living standards. Those unions don't improve - or detract from - our global competitiveness.

We've spent the past decade or more with tax and regulatory policies in place that consciously export some of our most productive service industries (e.g. software) to low wage countries. These policies came out of the pro-business, free trade consensus that emerged twenty-five years or more ago. CEOs were paying for political campaigns, so they got H1B visas and tax advantages for moving jobs and capital offshore. The market will provide, they told us; they just didn't tell us that it would provide for them and leave us holding the bag. (Some of us knew anyway.)

It's probably too late for software, green industry is in Europe, and we've Duhbya'd away our lead in biotech to Asia with stupid natterings about stem cell research. It's hard (always) to see where the next big thing is coming from, but it's probably not coming from the United States, and that's a huge bummer.

Liberty and justice for all.

My home

RayCapps's picture


I'm not about to defend any specific boneheaded tax breaks, tax cuts, or poorly considered tarriffs imposed by the American Government at any time under any administration or congressional leadership. Let the Democrats and Republicans speak to their own sins in those areas. I'm only responding here because I have an irresistable urge to declare stopping stem cell research was stupid, stupid, stupid, stupid, and still more stupid. Do we think if we don't do it no one else will? Do we think we can somehow put a stop to mankind's knowledge in any area? Just stupid. And arrogant. But mostly stupid.

gonzone's picture

Someone has to say it

Someone has to say it so it might as well be me:

"Would you like fries with that coffee?"

Service industries have mostly been traditionally non-union jobs, so they get to stay. Heavy industry, traditionally mostly union jobs, must be exported for the good of the very wealthy.

"When the going gets weird, the weird turn pro."
Hunter S. Thompson

RayCapps's picture

My bad.

"Would you like fries with that coffee?"

I have always thought the lack of concern with the service sector was either preoccupation with pleasing the AFL-CIO or bashing the "rich man" straw man. I can see now it's really just general disdain. Sorry for bringing it up.

gonzone's picture


Your snark is exceedingly pleasing kind sir.

"When the going gets weird, the weird turn pro."
Hunter S. Thompson

R. Neal's picture

SEIU isn't just

SEIU isn't just nurses:

About SEIU | SEIU.org

» The largest health care union, with 900,000 members in the field, including nurses, LPNs, doctors, lab technicians, nursing home workers, home care workers

» The largest property services union, with 225,000 members in the building cleaning and security industries, including janitors, door men and women

» The second largest public services union, with 850,000 local and state government workers, public school employees, bus drivers, and child care providers

According to their about and history pages, they formed after being frustrated with 50 year old thinking and approaches of the AFL-CIO.

But you are correct that many other service type jobs (call centers, retail, food service, etc.) aren't represented. But I think some of those are covered (i.e CCW and others).

Anyway, to the problem you cite, I'd like to see a move towards more employee ownership as a goal/result of organizing or maybe even as an alternative to organizing.

RayCapps's picture

Certainly more palatable to owners...

Anyway, to the problem you cite, I'd like to see a move towards more employee ownership as a goal/result of organizing or maybe even as an alternative to organizing.

Since employees' overall compensation would rise and fall based upon the overall performance of the company, it seems very intriguing at first blush. It's a model I haven't given much thought to, but certainly will now.

I couldn't resist sliding into this thread because I'm already engaged in a similar debate with a diehard GOP conservative. His thinking is that the rise in manufacturing wages was more a result of improvements in productivity than the efforts of organized labor. Consequently, organizing labor will only increase the price of services, reducing demand, and narrowing the market - costing jobs. I'm arguing he's got his cart before his horse. Productivity improvements don't happen in a vacuum. To the contrary, it was concern over rising wages (many causes, but organized labor certainly key among them) that leads manufacturers to find and fund improvements in processes and technology to improve their revenue per employee. If labor is cheap, plentiful, and replaceable, there are no compelling economic pressures to improve productivity. Such productivity improvements have reached the point in nations like the USA and Japan that manufacturing labor can scarcely be referred to as "unskilled" anymore. It's become and continues to become something more akin to a trade or even a profession.

Transportable industries where such productivity improvements weren't achieved ultimately wound up seeking new sources of cheaper labor as the general economic condition of the potential employee pool increased within the home country (true both in the USA, UK, and Japan, now South Korea). Consequently, my argument has been that rather than merely passing the cost of using organized labor onto the customer, price point pressures will force service industries to find and invest in productivity improvements. Most unskilled service industry labor has the additional advantage of not being readily transportable (hard to drive to Shanghai for a burger). Thus, contrary to his doomsday vision, I'm projecting any potential job losses owing to productivity gains would be more than offset by higher overall demand for services (more people able to afford and regularly use services), just as happened in manufacturing in the late 19th and first half of the 20th centuries.

rikki's picture

fries with that?

Ray, your point that service-industry workers need help is quite valid. Democrats take labor for granted like Republicans used to take evangelicals for granted. Sorry they saw through the bullshit and won't be voting 'R' no more.

Democratic inaction has contributed to labor's decline and the rising cost of health care. Your question makes little sense to me, however, because the only time I hear people talking about labor issues is when I am with progressives. I commend you for raising the issue.

Labor's ills, however, are not caused by progressives, they are caused by the immense political spending of corporations and the wealthy. Neither party can afford to piss off fatboy when it costs $1B to become President. It is their boss's money in our elections that is causing labor's ills.

Blaming progressives for failing to stop the powerful from abusing the weak is weak.

Remember what Colin Powell said about Iraq? "You break it; you buy it." Republicans bought all this economic sickness: health costs, stagnant wages, bankrupt retirement accounts, predatory lending and the declining dollar, which is the dominant and obvious cause of oil price volatility. Republicans don't get to ignore labor issues and declining wages for two decades then ask where are the progressives?

The question is where have Republicans been for low-wage laborers? Oh yeah, highest incarceration rate among our peers.

Where have Republicans been on oil independence? Oh yeah, SUV tax credits, accelerated road building, the entire output of Kuwait fed to our military, endless war. There are so many unanswered questions about where Republicans have been, I don't see where you have ground to be asking questions.

Also, your notion about it being hard to drive to Shanghai for a burger is superficial crap. Many things in the bag with your burger drove from Shanghai. The meat may have driven from Shanghai, or maybe just Argentina. There is at least as much foreign labor in a burger bag as American labor. Not a Litton's burger, mind you, but the drive-through kind. If it's served on a plate, it's probably mostly American.

I commend Republicans for the frequency with which they eat off plates.

RayCapps's picture

Whoa! Blame wasn't my intent at all.

Your question makes little sense to me, however, because the only time I hear people talking about labor issues is when I am with progressives. I commend you for raising the issue.

Blaming progressives for failing to stop the powerful from abusing the weak is weak.

The only people who would talk about labor issues are progressives. Labor is a progressive constituency. Conservatives tend to see the red flag of socialism everywhere labor issues are concerned. Libertarians try to believe in the separation of business and state. So no one else would ever discuss labor issues from a pro-labor standpoint but progressives.

If you want to put the word "blame" in my mouth, then I guess it was my intent to "blame" progressives for being so caught up in anti-globalization rhetoric that they are turning a blind eye to the very real and very here and now problems happening in the service industries. But "blame" really isn't the right word for it. "Calling attention to" would be more accurate. I'm happy to learn that you still hear progressives talk about labor. But being one, I suppose you have more opportunities. For me, outside of the occasional Wal-Mart rant, it's very rare I hear anything about the need to organize service industry workers.

Oh, and to clarify, the raising of the cows (I hope they're still cows) that go into the burger is the agricultural industry. The slaughtering and rendering of said cattle into little patties is the manufacturing industry. The heating and and the serving of those little patties to the consumer of said patties is the service industry. Agriculture and manufacturing both tend to be exportable. Service usually isn't. Call centers would be a notable exception. The other major component of the final cost of said burger is transportation. That industry, by definition, is never exportable.

rikki's picture

So you are abdicating

So you are abdicating responsibility to address the problems of lower and middle class workers. Is your role to exacerbate those problems as much as progressives will allow? You must be proud to see the "separation of business and state" bearing fruit in the collapse of the mortgage industry, bank bailouts, real-estate market stagnation and the decline of the dollar.

RayCapps's picture

Uh, no...

If you've read what I've been writing, I've been advocating a more aggressive expansion of organized labor into the service sectors - where such leverage and protections are most desperately needed. Given current employer practices in this sector of the economy, that's not going to happen without some government encouragement. My only logical allies in championing this idea are progressives.

As for the rest of your paragraph, I'm not entirely sure what you're getting at. Are you suggesting there is a separation of business and state in the areas you mentioned? The interaction of government and businesses in the various forms of banking have a longer history than any other industry I can think of in the USA. I mean, the National Bank controversy goes back to John Quincey Adams and Andrew Jackson for crying out loud. You've got the FDIC,FSLIC, The Federal Reserve Board... hell, even the money itself isn't tied to anything other than the "full faith and credit" of the United States Government. Hardly a great example of libertarian thoughts on the separation of state and business.

But before we run down this bunny trail, I should warn that I've exercised my right as a sentient human being to separate myself from those libertarians who continue to somehow believe all will be well if could only separate government from business. Many overriding aspects of the public interest cannot be served within the normal pressures of conducting business - worker safety and environmental protections to name two. Business pressures, unfettered by regulatory compliance, would drive each of these interests to the lowest possible levels. Complete separation of state and business is as undesirable as it is unachievable.

rikki's picture

It's all well and good to

It's all well and good to say you want "aggressive expansion of organized labor into the service sectors," but what does that mean? What steps will achieve that, and what are the obstacles you will have to overcome? Lack of interest or effort on the part of progressives is not an obstacle.

Once you've got the service sector unionized, then what? They will be torn between wage increases and erosion of health coverage like all the other unions, while they watch executives flee with severance packages after driving retirement accounts and benefits packages into ruin. Workers will still be upside down on their mortgages. Their dollars will still buy less and less.

Republicans' economic failures, built over the past two decades on the "separation of business and state" philosophy, will take a lot more than just a little unionizing to overcome. Republicans have screwed this country badly, and they continue to stand in the way of solutions. Focusing on service-sector unionization is just another way to avoid the bigger problems facing workers in all sectors.

I'm glad you recognize that complete separation of business and state is a bogus ideal, if not just batshit insane, but it is pursuit of that ideal that lead to the rise in predatory lending and the mortgage collapse, the erosion of wages and benefits and plenty more big problems impacting everyone. Unionizing call centers will hardly make a dent in the problems Republicans have created with their oblivious, obstructionist ideology.

Even now, with the investor class finally sharing some of the decay, Republicans are still more interested in finding ways to blame Democrats and progressives than in actually solving problems.

RayCapps's picture

Rikki, I generally agree with you on the above.

Republicans' economic failures, built over the past two decades on the "separation of business and state" philosophy, will take a lot more than just a little unionizing to overcome.

However, though Republicans might have couched their actions in clever libertarian sounding catchphrases like "keeping government out of the business of business," what Republicans and Democrats alike have actually pursued as economic policy for the past 40 years (Well, Nixon didn't take office till January 1969, so not quite 40yrs) - government of the lobbyist, by the lobbyist, and for the lobbyist - is a far cry from the GOP's sloganeering. There's no political advantage to either party in pursuing the ideal you mistakenly credit to the Republicans. To keep your coffers full, you have to make contributors either fear you're going to do something to hurt them or hope you'll do something to help them. The really successful politicians manage to do both. Libertarians (capital L) have always consigned both major parties to the nether regions for this symbiotic, but ultimately unhealthy, relationship. After 8 years of Bush the Younger and 6 years of controlling all three major branches of government failed to produce any substantive movement in that direction, libertarian leaning GOP'ers might actually be waking up a little to the truth about their party's relationship to lobbyists. But then, I've always been an optimist. When do the Democrats come to that same realization about their own party?

It's just urealistic to expect businesses to stop lobbying the government as long as the government has a say in the success or failure of businesses. Likewise, it's unrealistic to expect either party to do anything substantive to loosen the grip of lobbyists as long as those coffers keep providing them an incumbent advantage. Term limits? Taxpayer funded campaigns (disallowing all private contributions to either major party or their candidates)? I don't know. Once I reluctantly accepted that building a wall between business and government wasn't such a hot idea, I found myself at a loss as to how the current condition might be addressed. I'm just not that smart. What I'm not and never have been, is a Republican, Democrat, or even a Libertarian (capital L). I point that out because I keep getting the vibe you're wanting to wage war with a Republican, not with me.

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