Windows Into Populism's Rise

A rule of thumb for understanding American politics: The federal government only reacts to popular will when the upper-middle professional class starts making noise. Everyone else's voice falls on deaf ears. This is an unfortunate reality, but it is reality.

Consider the last few decades. Many historians believe anti-war pressure during the Vietnam War only really changed public policy when, in 1969, the draft lottery was created. At that point, a whole swath of upper-middle-class parents was galvanized because it became much harder to use loopholes to shield their kids from combat.

Business misbehavior was rarely a congressional focus when CEOs were cutting blue-collar wages while padding their own salaries. But when Enrons started undermining the retirement savings of the upper middle class, lawmakers raced to pass corporate accountability legislation. Housing affordability received little attention in Washington when only the working poor couldn't pay the rent. But when mortgage defaults recently began roiling the stock market, the issue was quickly deemed a "crisis."

This realpolitik lens, while an interesting historical decoder, is an even more important guide to the present.

Pundits today seem puzzled by the Lou Dobbs-ification of politics -- the sudden political emergence of economic issues such as trade, jobs, wages and even immigration, and the meteoric ascendance of populist red-state politicians such as Ohio Sen. Sherrod Brown, a Democrat, and Virginia Sen. Jim Webb, also a Democrat, demanding immediate change. But on a recent trip to the iconic capital of the upper- middle class professional, it all made perfect sense.

With buzzing twentysomething worker bees and beige low-rise buildings dotting a bucolic setting, the Microsoft campus in Redmond, Wash., looks like a cross between a university and a suburban office park. The comfortably tranquil image is carefully massaged by company icon Bill Gates, who cheerily testified to Congress this month that "anyone here in the United States who has [computer engineering] skills is going to have a super-high-paying jobs." Yet a darker reality emerges when talking to workers.

They pointed me to company documents published by the worker advocacy group WashTech, proving Microsoft salaries for mid-level full-time employees have been stagnating, even as company revenues rise. They fumed over how the company employs thousands of "permatemps" -- full-time employees technically designated "temporary" so the company does not have to pay them as well or provide them benefits.

Showing how the immigration backlash extends beyond odious xenophobia and into legitimate economic worries, they lamented that wages are forced ever lower by Microsoft's use of the H-1B visa program -- a program that forces permatemps to compete with temporary, nonresident workers from other countries who are imported here by companies because they will accept low pay (government data shows tech companies pay H-1B workers $13,000 per year less than American workers in the same jobs). "They say they need H-1B's because they can't find a qualified American," whispered one permatemp in the hall outside his office. "What they really mean is they can't find a cheap American."

Pay grades are only part of the ferment -- it is also anxiety over job security at a time when 1.1 million American information-sector jobs have been eliminated in the past five years. While Gates told Congress that the demand for highly skilled computer workers "is going to guarantee them all jobs," one 10-year Microsoft "permatemp" making $25-per-hour with no benefits told me everyone knows better.

"You can knock yourself out here and do your best and fix a thousand bugs," he said. "But at the end of that, they can -- and often do -- just say goodbye. And everyone here knows that."

Another permatemp said that while he helped build the new Vista operating system, he found not one Microsoft division that doesn't fear showing up and having their keycards not work because all their jobs were sent to India. That concern is justified: A Microsoft slide presentation, also uncovered by WashTech, shows the company encourages foreign outsourcing in most major decisions.

WashTech has tried to convert workers' anger into union drives. But those grinning, business-casual Microsoft executives have learned a thing or two about how to bust unions. One example: When a handful of Microsoft workers developing fledgling tax software took an initial step to unionize, the entire project was terminated by management.

As both the Microsoft story and broader government data show, wage cuts, employment schemes, outsourcing and union-busting are not isolated to blue-collar or entry-level industries: they have become commonplace throughout the economy, an enraging part of the upper middle-class's daily life, and thus the likely reason why an increasing number of politicians are finally challenging Wall Street orthodoxies on wages, trade and outsourcing. That we must always wait for this kind of action until crises hit this specific socioeconomic class is certainly a cause for outrage. That we can now finally expect real change is nonetheless a cause for hope.

David Sirota is the author of "Hostile Takeover" (Crown, 2006).

(c) 2007 The San Francisco Chronicle