In the middle of a pandemic and the kind of mass unemployment we haven’t seen since the 1930s, I am about to be furloughed by the governor of our state, together with thousands of other state workers. We must balance the budget, says Gov. David Ige and, in a spirit of shared sacrifice, accept a 10% wage cut in solidarity with our neighbors, friends and family in the private sector.
It sounds stirring and persuasive, but it’s completely misguided. For years, Republicans and conservative Democrats have been telling us that cutting taxes and government spending will spur economic growth and lift all boats. Instead they have lifted all yachts. Real wages in the United States haven’t risen for 40 years, and gains in labor productivity — gains spurred by the creativity and hard work of ordinary people — have gone almost entirely to those at the top.
Economic inequality has returned to levels not seen since the Gilded Age, and American families have been getting by only because so many women have entered the labor force and increased the family wage. Now that most women are employed, family incomes can grow only by increasing individual wages or sending our kids out to work. Anyone for a return to child labor?
The pandemic has exposed this inequality in stark terms, as well as the bankruptcy of economic policy at the state and federal level since the 1980s. Trickle-down economics doesn’t work for most Americans. Cutting taxes and public goods like education doesn’t benefit middle-class workers; it generates wealth at the top that never gets shared.
Now with millions unemployed, losing their health care, running through their savings, and facing eviction or default, Mitch McConnell sits astride the U.S. Senate blocking a coronavirus relief bill that is essential to prevent another Great Depression. He refuses to provide assistance to states like Hawaii, with what he calls “irresponsible” Democratic governments, and recommends driving them into bankruptcy and receivership.
Republicans, who pushed balanced budget amendments in the 1980s and 1990s precisely to reduce local fiscal flexibility, have been waiting for this opportunity for a long time. Their aim is to force all states to adopt the same abysmal level of public provision that exist in Republican states like Mississippi and Oklahoma. This is exactly what the author Naomi Klein calls “Disaster Capitalism,” capitalism that uses crises like the pandemic to beat down the living standards and life chances of ordinary people, permanently.
And at this moment of unparalleled democratic fragility and economic crisis, of congressional impotence and inaction, with a vaccine on its way, what does our governor do? He decides to cut the pay of state workers by 10%. This is a foolish policy. His decision to impose furloughs on state workers — exempting first responders and front-line workers, which might spark real public outrage — plays into the longer-term game plan of the GOP, and will be disastrous for the immediate economic health of the state.
The private sector will not lead us out of this crisis. To get our economy back on track will require the coordinated efforts of federal and state governments. What’s the point of a federal stimulus bill if the state lays people off and slashes workers’ wages? The result will be “shared sacrifice” but it won’t save the local economy from an economic calamity that harms everybody.
What we need right now is not shared economic misery, it’s a shared vision of renewal and progress, one that breaks with the discredited economic orthodoxy of the past and lays the basis for a more just, equitable and sustainable society. The kind of society that really would make America great.
Marcus Daniel is an associate professor of U.S. history at the University of Hawaii-Manoa.