A Call to Action to End the 'War on Workers'

Les Leopold, a long-time union advocate and economist has a new book out called “Wall Street’s War on Workers, How Mass Layoffs and Greed are Destroying the Working Class and What to Do About It.” Leopold, who founded the Labor Institute, has been hammering away at how the middle class has been “strip-mined” by the financial sector for decades. At 178 pages, this latest strike against the gods of wealth is a quick read. Yet it is packed with facts, analysis and ideas that you won’t see in most of the media outlets Americans read (no matter what point on the news spectrum you tap into). His goal is to give all of us a different perspective on what’s wrong with the economy, how average folks are losing ground and how we can fix it.

In some ways, Leopold tries to do too much in one writing. He’s trying to open our eyes to the ways that Wall Street is sucking the life out of healthy enterprises and good jobs. He’s also trying to make the case that the blue-collar workforce and the white working class are not lost to the extreme right wing of our politics. His message to the Democratic Party and liberals is, if you fix these things, you can get these voters back. In an effort to impact this election cycle, he packs it all in one book.

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Leopold’s central economic assault is on stock buybacks. This is where a company spends its cash to repurchase its stock, thus driving the stock price up. This used to be mostly illegal, until the deregulation craze got into full swing. As Leopold details in case after case, stock buybacks are at the root of mass layoffs and the strip-mining of good companies. The stock buyback cycle is fairly simple. A financial vulture buys a healthy company, uses tremendous debt to make the purchase, then spends that enterprises cash and the borrowings to buy back stock. This drives the stock price up artificially, and the vultures, along with those in management who get paid in stock options, cash out. What’s left is a once thriving business, now shackled with debilitating debt. The way that debt is paid off is by mass layoffs of workers, the sale of assets and curtailment of any spending on improving the business. Leopold provides a chart of all the companies that have been run through this destructive model. The current US Steel/Nippon deal has all the hallmarks of this financial rip-off. His solution is also simple. Declare stock buybacks illegal again and limit the amount of stock options given to top management. In other words, redirect the purpose of enterprises to investment in capacity, workers and expansion of jobs.

At its root, Wall Street’s War on Workers is a call to rethink what ails us and retool our policy options. The question is, when will we listen to voices like Les Leopold’s?

The second theme of the book is to debunk the stereotype of the blue-collar worker and the white working class. Using reliable polling over a long period of time, Leopold makes a convincing case that these groups are actually fairly progressive on social issues. Not the Neanderthal’s that the media and pundits put forward. Leopold shows the correlation between the mass-layoff phenomenon in this nation and the shift of blue-collar and white working-class people away from the Democratic Party. Essentially, as the jobs and economic security disappeared, people began casting around for a different deal. One that would satisfy their basic economic needs. Since Leopold believes that stock buybacks are at the root of why this happened, he concludes that a reversal of the “financialization” of our economy can reverse the trend toward an autocratic and divisive national direction. “Financialization” is just a big word for sucking companies dry instead of building and creating new capacity.

While Leopold makes the case for putting controls back on Wall Street, he concedes that the political will to do that is not strong enough in today’s public debate. His message is that we’re arguing about the wrong things and therefore the solutions being presented to us won’t help. His call is for both a different direction and new leadership that can get us there.

Leopold goes beyond the stock buyback dilemma to offer a number of other proposals. I’ll list them here, but to get the reasons and detail, read Chapter 12:

1. End Stock Buybacks.
2. Prohibit shareholder activists (the vulture capitalists) from serving on boards of directors.
3. Change the way top corporate officers are paid.
4. Place worker and public representatives on the board of directors.
5. Create Public Banks.
6. Protect Contingent and Gig Workers.
7. Limit Corporate Debt.
8. Prevent Corporate-Focused Trade Deals.
9. A “Marshall Plan” for the victims of mass layoffs.
10. Make Unionization easier and simpler.
11. Ramp up the Availability and Affordability of Education.
12. Fight each and every mass layoff.

The book is a call for action. It is a plea to focus on economic displacement and its impact on our entire society. It is a direct assault on the idea that corporations exist to make money. It demands that money and business factor in workers and communities as an essential part of their business model. It insists that workers and public representatives be guaranteed a seat on corporate decision-making boards. Leopold points to Germany and other countries that do this, and the success their companies and economies have enjoyed as a result.

At its root, Wall Street’s War on Workers is a call to rethink what ails us and retool our policy options. The question is, when will we listen to voices like Les Leopold’s? Or will we continue to be diverted by that which divides us instead of that which unites us?