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Mr. Moneybags Acts Out Union’s Lessons on U.S. Inequity: Economy

“People aren’t happy with the economy they’re living in but think they have no alternative,” said Damon Silvers, policy director at the AFL-CIO. “You’ve got to explain not only why the economy is unjust to working people, but that it’s dysfunctional and there’s a different way of doing things.” Photographer: Andrew Harrer/Bloomberg
“People aren’t happy with the economy they’re living in but think they have no alternative,” said Damon Silvers, policy director at the AFL-CIO. “You’ve got to explain not only why the economy is unjust to working people, but that it’s dysfunctional and there’s a different way of doing things.” Photographer: Andrew Harrer/Bloomberg

May 21 (Bloomberg) -- Ten chairs lined the front of a community center in Greensboro, North Carolina, where Mr. Moneybags was giving a lesson in wealth inequality. Moneybags, played by tobacco worker John Ledbetter, sprawled across seven of them as nine of his classmates jostled for the rest.

“How does that look to you all?” Katie Gregg, an organizer with AFL-CIO affiliate Working America, asked a class of workers, retirees and community activists.

“Greedy,” someone shouted.

“What does this tell you about the economy?” Gregg asked.

“It’s unfair.”

The labor union’s musical-chairs wealth tutorial debuts across the U.S. next week with the goal of convincing 1 million Americans that reversing income inequality starts with their vote. Part political rally, part membership drive, the class is the union’s answer to slower wage and economic growth as it pushes for an increase in the minimum wage, higher taxes on the wealthy and more government spending on infrastructure.

“People aren’t happy with the economy they’re living in but think they have no alternative,” said Damon Silvers, policy director at the AFL-CIO, which organized the effort. “You’ve got to explain not only why the economy is unjust to working people, but that it’s dysfunctional and there’s a different way of doing things.”

The idea is to galvanize voters behind candidates who support the agenda of the union and its allies ahead of this year’s mid-term elections and the 2016 presidential election. It’s a tall order, Joseph Stiglitz, a Nobel Prize winner and professor of economics at Columbia University in New York, said.

Public Perception

“They’re going to have to hit a lot more people than a million,” Stiglitz said in an interview. “This is just beginning to go into public perception. Individuals know what’s happening to them.” Voters are inclined to blame low wages and unemployment on their particular circumstance, such as a closed factory, rather than economic policy, he said.

The 90-minute union course chronicles the economy’s drift toward rising inequality with a series of data snapshots.

The gulf between the richest 1 percent and remaining 99 percent is the widest since the 1920s, according to research by economists Emmanuel Saez of the University of California at Berkeley and Thomas Piketty of the Paris School of Economics.

While workers have become more efficient, their pay has climbed at a slower pace. The gap between productivity and compensation growth for the typical worker is larger than at any time since the end of World War II, according to a 2012 report by Lawrence Mishel of the labor-backed Economic Policy Institute in Washington, which conducts research on the economic condition of low- and middle-income families.

Income Inequality

A broad measure of income inequality, the Gini coefficient, has been rising since the 1970s and stood at a record in December 2012, Census Bureau data going back 46 years show.

Next week, the AFL-CIO will begin training instructors, deploying to Boston; Chicago; San Antonio; Vancouver, Washington; and Orlando, Florida. It presented a trial run of the curriculum for some 50 people last month at the Beloved Community Center in Greensboro.

Gregg, 25, began by polling the boisterous, standing-room-only crowd. With a show of hands, half said they or someone in their family had lost a job recently. Many indicated they had missed rent or car payments, while a third weren’t sure whether they’d be able to retire.

“This shift in the economy, it isn’t because everyone in this room has made a bad choice at some point in their life,” Gregg said. “It’s our economic policies. It doesn’t have to be that way.”

Campaign Slogan

In keeping with its campaign slogan that “The economy is not the weather -- you can change it,” the class is the union’s call for a bigger voice in Washington. Discord there has grown in lock-step with the rise in income disparity as Democrats and Republicans argue how best to arrest it.

Republican leaders say lower taxes and less government spending leave more money in the hands of American workers and encourage business creation. A plan from House Budget Committee Chairman Paul Ryan of Wisconsin would cut more than $5 trillion in federal spending over a decade, with a goal of balancing the U.S. budget by 2024.

Democrats including House Minority Leader Nancy Pelosi of California have seized on Ryan’s proposed cuts to domestic programs such as college tuition aid, Medicaid and food stamps, to motivate their political base. The party and its union allies see a bigger role for government, including higher taxes on wealth.

The Divide

“The fundamental divide is between conservatives, who believe that the economy can grow much faster and their policy tools will help it do that,” and Democrats who favor more government involvement, said Douglas Holtz-Eakin, president of the free-market American Action Forum in Washington and an adviser to Republican Senator John McCain’s 2008 presidential campaign. “The other side has decided that this is abnormal and let’s get back to redistribution.”

Groups have tried to change the narrative on economic policy before. In 2012, the Peter G. Peterson Foundation, which argues for reducing the federal budget deficit, distributed a high-school curriculum lauding the benefits of fiscal austerity. That viewpoint had been gaining traction in Washington.

Now, public opinion is shifting. Twenty percent of Americans said unemployment was the most important problem facing the U.S., followed by the deficit, according to a Gallup poll on May 8-11. In 2010, Americans rated the federal debt and terrorism the nation’s top concerns.

Tough Road

History suggests the Democrats and their union supporters have a tough fight ahead. Gridlock favors conservative candidates and voters tend to cast ballots against the party in power when the economy is bad, said Andrew Gelman, a political science professor at Columbia and author of a book titled “Red State, Blue State, Rich State, Poor State: Why Americans Vote the Way They Do.”

“Democrats and Republicans both argue that their policies are in the best interests of everyone,” he said. “The problem is not that people aren’t voting their self-interest, the problem is that not everyone is agreeing with them on the merits.”

To contact the reporter on this story: Lorraine Woellert in Washington at lwoellert@bloomberg.net

To contact the editor responsible for this story: Carlos Torres at ctorres2@bloomberg.net Vince Golle, Mark Rohner

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