We interrupt the scheduled programming on this blog to bring some peculiar analysis of news of national importance.
Last night I introduced my girlfriend to my holiday tradition of watching “The Muppet Christmas Carol” (don’t worry, I’ll be getting to her tradition of watching the the Hepburn/Tracy film “Desk Set” soon enough). While the film has all the classic Muppet traits of zany physical comedy, gloriously earnest songs that can even melt the hearts of the scroogiest among us, and oh-so-much breaking of the fourth wall, it has some surprisingly dark moments (perhaps due to the fact that it was the first Muppet film done without creator Jim Henson and puppeteer/voice master Richard Hunt).
The film’s underlying darkness hits very early on in the offices of Scrooge and Marley, a London financial institution who seems to deal with foreclosures like its modern American counterpart, Bank of America (or Wells Fargo, or Citi Bank, or well… you get the picture). As CEO/CFO Ebenezer Scrooge (a fantastic Michael Caine who never phones it in) sits in his office, he is approached by his legion of bookkeepers and top clerk Bob Cratchit, I mean Kermit the Frog, about adding more coal to the fire to keep the office a little warmer for working (“Our pens have turn to inksicles!” notes one of the rattily- attired bookkeepers).
Scrooge deals with that request in a manner that is both a bit heartbreaking, and all too relatable to the economic times in which we live. With a piercing gaze shooting lasers of fury, Scrooge asks how it would feel to spend these cold months, “UNEMPLOYED!?” In typical muppets fashion, the bookkeepers suddenly sing and dance a calypso for their boss to show how very warm they feel.
While this is a pretty small moment in a movie more notable for hearing Michael Caine sing, it felt oddly prescient for our time of economic malaise and rollbacks on organized labor. While today’s bosses may not deal with employees in so brusque a manner as Mr. Scrooge, the threat of prolonged unemployment has been very effective at increasing worker productivity while decreasing real wages. As the US economy spiraled in 2008 and 2009, the accompanying decrease in consumer demand made companies of all sizes attempt to make more capital with less labor by laying off staff and increasing hours for remaining employees (though not necessarily giving appropriate wage increases as well). If employees complained about the increased stresses of work, employers had a very strong bargaining chip – a bad job is better than no job at all, isn’t it? Especially when you may be out of work for months or even years at this rate…
This idea of a bad job being better than no job at all has become an assumption undergirding national policy debates about capital and labor. Yesterday, Michigan’s legislature passed a “right to work” law, instituting that any potential employee cannot be forced to pay union dues as a condition of employment, even if a union does bargain collectively for that employee. The rationale for the law is that it makes a Michigan a more attractive place for businesses to work in – they can come in and create jobs without having to deal with those pesky unions. When an economy is in a depressed state, so the thought goes, excessive unionization can keep the economy from growing because businesses aren’t investing to create jobs, as excessive union wages cut into potential profit margins.
These assumptions come from a supply side view of economics, one that believes that once capital is free to move uninhibitedly, then the economy grows for everyone. In this view, corporations of benevolent heroes, “creating jobs” for the good ol’ average American to take. However, as shown by the (lack of) efficacy of supply side economic policies like the Bush tax cuts of 2001 and 2003 (which didn’t stimulate economic growth as proposed), a supply side view of economics is incomplete at best. Indeed, a demand side model explains better how in the US economy today, companies are sitting on large amounts of capital, but are not investing it. In a depressed economy when people are not spending enough on products from cars to electronics to home appliances and beyond, it does not make sense for companies to open up new factories or stores because the opportunity costs of these new business outlets are not high enough to justify the investment. In a depressed economy, over-worked and under-payed employees (like Scrooge’s bookkeepers) don’t have the disposable income to pay for the larger house or new coal-burning stove, a cycle which further depresses the economy. In order for an economy to grow for all people, not just holders of capital (like Mr. Scrooge), ordinary workers must have high-enough wages to pay for more than just necessities, thus increasing demand for products of all kinds, a demand that justifies new corporate investment.
With this view of economics, Michigan’s “right to work” law will not create the benefits that it proposes. It will allow employers to act like Mr. Scrooge, using the lack of unionization as a way to increase productivity without increasing pay or benefits (like appropriated heated workspaces). It will then prevent these workers from buying as many products, especially luxury consumer items, causing stores and movie theaters and the like to close, increasing unemployment, and decreasing the potential for corporate investment. Labor and capital are not antagonists in economic growth, but rather partners.
Charles Dickens’ Christmas fable, whether in Muppet form or Bill Murray form or McCarter Theater form, is not just a heartwarming tale of redemption through generosity. It is a story that continues to shed light on whatever present in which it finds itself. The bookkeepers and clerks of Scrooge and Marley may just be bit players in a magic fantasy, but they illuminate real issues faced by our very friends and neighbors.