Turning the Tables on Romney’s Scorn for Workers
In his now-famous 47 percent speech this May, Mitt Romney told a private group of very wealthy donors that he had written off almost half of Americans as deadbeats, hopeless dependents who paid no income tax and felt entitled to government benefits.
His remarks were unusually candid. Has a presidential candidate ever been caught expressing such open disdain for working-class Americans? What we might call the “Romney Doctrine” offers rare insight into the worldview of the people he likes to call “job creators,” and begs an answer to the question, “Who are the real dependents in our economy?”
To hear both candidates talk publicly, you’d think everyone in America was a small businessperson. Both parties’ rhetoric is full of pandering to “job creators”—their favorite new euphemism for the rich, who must never be over-taxed lest their job creation falter.
Take my father, for example. Though he wasn’t rich, he was a small businessman, a jobber in the New York City garment industry. In the 1950s, he employed Latina women to create sample cards of buttons and ornamental pocketbook snaps, which would then be offered to various coat houses and pocketbook manufacturers for their fall and spring lines. My dad was a job creator. But what did it take for him to create a job?
He paid the women in his shop the minimum wage, then 75 cents an hour, to control their life’s activity for eight hours per day. What my dad paid each woman was barely enough to cover her daily needs for food, clothing, and rent, so she would be in roughly the same shape to come to work on Tuesday as she was on Monday.
But he didn’t pay her the full value of eight hours of work. What she created in eight hours, my dad sold for far more than her daily wages. That’s how he made his profit. Like all workers, she was a wealth creator. My dad was not.
Makers, Not Takers
When Romney’s running mate Paul Ryan summons the bogeyman of the welfare state and calls working-class people “takers, not makers,” he has it backwards. Workers—that is, the wealth creators—aren’t the ones living off the labor of others.
The same relationship is replicated the world over, anywhere someone works for another for a wage—whether in a small business like my dad’s, or in my uncle’s oil heating business, or in large-scale industry, like coal mining.
In a unionized West Virginia underground longwall coal mine, a typical miner receives $211.28 per eight-hour shift. Pretty good pay.
Working with highly sophisticated machinery in a crew of 12 at the coal face, this miner can extract 541 tons of bituminous coal per day. The coal is sold in the market at $59.17 per ton, for a total day’s value of $32,010.97 per miner.
Clearly the miner creates new wealth far exceeding his wages. In an eight-hour shift, he is paid only $211.28 and creates an additional value of $31,799.69.
Sure, some of this wealth goes for the miners’ pensions and benefits. Some of it goes to expenses like the longwall machine and other equipment, shipping costs, computers and paper in the office. Some goes to the salaries of foremen, managers, and executives. Some goes to stockholder dividends.
But the point is this: Apart from nature, it’s workers who have created all the wealth, by working. In the coal industry, these workers include not only the coal miners but also those who built the longwall machines, who made the steel for the machines, and who mined the iron for that steel.
In my dad’s industry, the wealth-creators included the workers who cut trees for paper pulp and those who made the pulp into paper, as well as those who stitched buttons to sample cards and pasted rhinestones into sample pocketbook snaps.
The same holds true even for today’s service-industry workers. Restaurant servers, janitors and housecleaners, private hospital nurses, salespeople—all are creating wealth for their employers. Most small businesspeople started out as wealth creators themselves, a fact they should never forget.
Not all workers produce profit, of course. Think of public sector workers like teachers and firefighters. Their work enriches and protects our world, with no profit motive involved (until the coming of for-profit charter schools, that is). But all profit is produced by workers.
Most of Mitt Romney’s despised 47 percent who don’t pay federal income taxes are current, future, or past wealth creators. These include retirees collecting Social Security, low-wage workers (who do pay federal payroll taxes and, many of them, state income taxes), underemployed and unemployed workers, military personnel, and students.
Our whole economy depends on these wealth creators, not on the “job creators” who merely skim off the value of their work. It’s a little funny that Romney, of Bain Capital fame, is the one accusing people of feeling entitled to rewards they didn’t earn. Hold the phone there, Mitt—who exactly did you say were the dependents, again?
Gene Grabiner, Ph.D. and Distinguished Service Professor Emeritus in the State University of New York system, has been vice-president, grievance chairperson, and a contract negotiator for the Faculty Federation of Erie Community College, AFL-CIO.