GOP Gov. Arnold Schwarzenegger has a plan to reduce the state’s budget
deficit, estimated to be $38 billion through the next two years. He is
cutting social spending for working people. This is a strategy that also
helps big businesses such as Wal-Mart Stores Inc., set to expand its
presence in Southern California.
There, 70,000 folks in the United Food and Commercial Workers union have been out on strike for the past 11 weeks. Their employers—Kroger-owned Ralphs and Albertsons, and Safeway-owned Vons—are using the threat of Wal-Mart’s plan to add 40 Supercenters (grocery/retail stores) over the next four years to try and cut union members’ earnings and health care benefits.
The average hourly pay is $8.23 for a Wal-Mart worker versus $10.35 for a unionized grocery worker, according to a Dec. 19 “NOW” report with Bill Moyers on PBS TV.
Competition from Wal-Mart puts downward pressure on union wages. Call it “Wal-Martization.” Gov. Schwarzenegger’s budget-cutting also weakens working people.
Soon after taking office, he repealed the car tax increase. That added $4 billion to the deficit. One result is that Wall St. bond rating agencies are becoming less pleased with the state’s rising debt load.
Then the other shoe dropped. On Dec. 18, the governor announced that he will cut $150 million from the current budget due to the fiscal crisis he helped to worsen. The film star turned politician who promised “action” if elected in a recall vote is planning to go around the Democrat-controlled Legislature and reduce spending for social programs.
Presumably, drastic times call for drastic deeds such as slashing funds to house migrant farm workers. Also on the budget-chopping block are the California State University and University of California systems. For example, UC's Institute for Labor and Employment will lose $2 million.
The ILE has “been the intellectual driving force behind the burgeoning labor movement in California,” The Sacramento Bee reported on Dec. 20. Without saying so, the governor is seeking to undermine this movement.
“In 1999 when the Service Employees International Union succeeded in organizing 74,000 home care workers in Los Angeles County, the outcome was heralded as one of the most significant organizing victories since the breakthrough at Flint, Michigan, in 1937 for the United Auto Workers,” wrote Peter Olney of the ILE. “SEIU joined with community and political allies to restructure the independent provider system to provide higher wages and benefits for workers through the establishment of a public authority county by county in California,” he added. Then last summer, the American Federation of State, County and Municipal Employees, AFL-CIO, helped over 6,000 of the state’s home care workers to win union recognition.
The state’s labor renaissance has meant victories like this for low-paid workers, many of whom are female and nonwhite. This is hardly the cup of tea for the state GOP and its wealthy backers who bankrolled the gubernatorial recall campaign that helped unseat Democrat Gov. Gray Davis.
Crucially, cutting government spending for higher education will force more adults to enter the work force. Overall, this will help to calm Californians’ push for higher wages. Many of them surely want a job regardless of the wage, given that job creation continues to be weak, though the recession that began in March 2001, has officially ended.
This Nov., the state’s unemployment rate was 6.4 percent versus 5.9 percent nationwide. Briefly, more people competing for fewer jobs is a dream deal for a big employer like Wal-Mart. Its high profits depend partly on paying low wages to a non-union work force.
That pressure is now extending to unionized grocery workers in Southern California. Crucially, Gov. Schwarzenegger is trying to change the political “facts on the ground” to empower the employing class by creating the conditions for increased exploitation of employees. So much for government stepping aside for the market to work its magic.
Significantly, the governor is using California’s budget deficit to drive down living and working standards in the state. He has blamed Democrats for turning the state budget surplus into a deficit. But this just confuses the issue.
The budget deficit in California is part of a U.S. downturn. It is largely a result of the stock market bubble of the late 1990s that burst and reduced tax revenues to states. Like all busts after such booms, both were unplanned.
What was planned before, during and after the recent financial bubble? The privileged few have been seeking to roll back New Deal and Great Society legislation. Such legislation strengthens working people mainly by providing them with a safety net from the market.
Briefly, the goal of the rich and corporate America has been and is to restore the rate of profit that dipped with the war in Vietnam. That is what has spawned the past 30 years of economic restructuring in which unions in particular and working people in general have been attacked by employers and their political allies. Gov. Schwarzenegger’s policy of reducing government spending for working people is a part of this trend.
A bumper sticker in his gubernatorial recall bid read “Join Arnold.”
Currently in office, he is attacking working people, including some who perhaps joined him with their votes. But the situation now isn’t a Hollywood movie, and much hangs in the balance for many.
Seth Sandronsky is a member of Peace Action and co-editor with Because People Matter, Sacramento’s progressive paper. He can be reached at: firstname.lastname@example.org.
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