Hollywood Unions versus Reaganomics

 

Hollywood union solidarity could undo four decades of damage to America’s middle class caused by Reaganomics.

* Redistribution of wealth by Reaganomics is often cited as the reason for the degradation of America’s middle class.

* Returning to a fair share of shareholder value for workers could reduce America’s growing extreme income inequality.

By Michael R. Barnard and Sydney Levine

Unique Moment

This is a unique moment in time when Hollywood could begin to dismantle four decades of degradation and stagnation of America’s middle class. It would be fitting for Hollywood unions to be the force to undo the damage to our middle class caused by Reaganomics, since President Ronald Reagan came from Hollywood and from 1947 to 1952, served as the president of the Screen Actors Guild, one of the many unions striking at this moment.

What makes this moment unique is the timing and solidarity of strong unions in the entertainment industry in Los Angeles, the current hotel workers’ and recent teacher strikes. The Bureau of Labor Statistics and an analysis of area union membership suggest that roughly half the American workers who have taken to the picket lines in large strikes in 2023 have done so in Los Angeles. Adding to the national zeitgeist are the Detroit auto workers also striking against the big three auto manufacturers and calling for a four-day workweek, having progressed little since the 1866 first union action calling for an eight-hour workday/40-hour workweek.

Los Angeles is at center stage with the city’s affordability crisis, stagnant wages amidst soaring corporate profits, and renewed confidence in union strength all converging. The increase in militance has in turn increased pressure on local, statewide, and federal Democratic officials to support organized labor with more than just lip service as electioneering ramps up. Recently, municipal workers in Los Angeles accused Mayor Karen Bass’s administration of failing to negotiate in good faith, leading to a one-day strike. Other Democratic officials have scrambled to show support, including the introduction of a new bill to allow striking workers to collect unemployment and city intervention to fine NBCUniversal for illegally cutting trees to eliminate shade on picket lines. And the administration in the White House also supports workers and the American middle class.

“The last year has witnessed an extraordinary upsurge in labor mobilization and labor action here in Los Angeles,” according to Kent Wong, director of UCLA’s Labor Center. “Los Angeles has emerged as a focal point of labor activism in part because of all the major cities in the country, Los Angeles has the biggest disparity in wealth between the rich and the poor.”

Moreover, the diverse, multiracial membership and leadership reflecting the city’s working class is a strength for Los Angeles labor. Many key unions and labor organizations, such as UNITE HERE Local 11, UTLA, and the Los Angeles Federation of Labor boast women of color in key leadership positions. Fran Dreschler representing SAG-AFTRA comes from a labor class family and continues the long line of Jewish women labor organizers starting with The International Ladies’ Garment Workers’ Union (ILGWU), which, after the Triangle Shirt Factory Fire, became one of the largest labor unions in the United States in the 1900s.

“Key unions here in Los Angeles have embraced a much stronger vision of social justice unionism,” says Wong, describing Los Angeles labor as working “at the forefront” of movements for social justice, from fights for the undocumented to the movement for Black lives.

According to Kurt Petersen, copresident of UNITE HERE Local 11, the challenge facing hospitality workers is one facing all Angelenos. “The fundamental question facing all of us, union and not union, is who is going to be able to live in Los Angeles?”

However, a caveat here…NPR News reports:

Last year, labor unions in America looked like they were turning a corner. Employees at more than 250 Starbucks stores voted to unionize. Workers at Amazon warehouses, Trader Joe’s, and REI were joining the fight. Grad students. Uber and Lyft drivers. Even the knights, queens, and squires at Medieval Times were jousting to join a union. Headline writers began declaring things like, “Employees everywhere are organizing” and that the United States was seeing a “union boom.” In September, the White House asserted “Organized labor appears to be having a moment.”

However, the Bureau of Labor Statistics recently released its union data for 2022. And their data shows that — far from a resurgence — the share of American workers in a union has continued to decline. Last year, the union membership rate fell by 0.2 percentage points to 10.1% — the lowest on record. This was the second year in a row that the union rate fell. Only one in ten American workers is now in a union, down from nearly one in three workers during the heyday of unions back in the 1950s.

To be sure, various data make clear that the hubbub over a union resurgence last year wasn’t all hype. For one, the absolute number of American workers in unions did, in fact, grow in 2022 — by approximately 200,000. It’s just that the number of non-union jobs grew faster. The National Labor Relations Board saw 2,510 union representation petitions filed in fiscal year 2022 — a 53% increase over the previous year. That’s hardly a game-changer, but it’s something.

Degradation Of America’s Middle Class

The past four decades of Reaganomics have brought us to the worst income inequality in living history. Since the presidency of Ronald Reagan, income inequality in the USA has reached its highest levels.[1]. Reaganomics favored tax cuts for the wealthy, weakening of unions, and deregulation of the financial industry.

President Reagan’s weakening of unions and lavishing increased corporate value into the hands of corporate executives and Boards of Directors, has resulted in the top 1% of earners in the United States now owning more than 32% of the nation’s wealth. This is the highest level of income inequality in the United States since the Gilded Age following the Civil War, a time of extreme wealth for a few individuals and extreme poverty for most others. Today, a century and a half later, we are experiencing the American middle class shrinking and we are watching as more and more people slip into poverty and homelessness.

Reagan’s deregulation of the financial industry triggered such events as the risky lending practices that contributed to the Great Recession and its resulting massive negative impact on the middle class and their loss of home ownership. His increased military spending and defunding of social “safety net” programs further damaged America’s middle class. His anti-union actions began weakening and unraveling workers’ solidarity and negotiating power.

A 2017 study by the Center on Budget and Policy Priorities [2] found that the top 1% of earners in the United States saw their after-tax income grow by an average of 187% between 1979 and 2016, while the bottom 50% of earners saw their after-tax income grow by just 18 percent over that same period after the 1980 election of Ronald Reagan.

His tax cuts for the wealthy under the proven-false doctrine of “trickle-down economics” disproportionately benefited the wealthy and persists to this day”. [3] The “trickle-down effect” has, in fact, drained the middle class of economic opportunities and therefore of its strength.

In the words of Ted Hope in his recent Locarno Film Festival speech: “Media CEOs earn nine-figure salaries, while the industry’s creative talent workers need to take Uber gigs.”

Income inequality is not inevitable and can be reduced by actions such as worker solidarity affecting political actions and social policies. After World War Two and before the Reaganomic redistribution of wealth, productivity gains had been shared between firms and their workers.[4]

We need to focus on policies that will benefit everyone, not just the wealthy few.

Definition of The Middle Class

According to a Washington Post analysis,[5] three specific identities for “the middle class” include how close a household is to the typical income for its region; whether the household is in the middle 60 percentile of incomes for its region; and how far the household is from the poverty level. Other factors include having a college degree, owning one’s home, and wealth (the money one has accumulated rather than how much one earns each year). Above all is the concept of security. “Predictability is central to middle-class life,” said anthropologist Caitlin Zaloom. Middle class means financial security to survive inevitable setbacks, plan for retirement, and provide for college education for their family.

A key principle defining the degradation of America’s middle class is the number of households that do not have enough savings to survive three months of an emergency situation and do not have significant savings for retirement. Emergency situations could include sudden major household or vehicle repairs or, as has affected 60% of the middle-class today, high inflation.

“The kind of lifestyle we associate with the middle is not attainable to people who are in the middle,” sociologist Rachel Sherman said. “Being able to buy a home, being able to send your kids to college without having significant amounts of debt… those things don’t go together with the salaries that people in the middle are being paid.”

The resurgence of worker solidarity and labor actions that we are seeing today could remedy the damage of the past four decades of Reaganomics not only in show business but throughout the nation.

Worker Solidarity

With today’s newly strengthened unions and solidarity, it is possible to return to equal sharing of productivity gains. By demanding a more equitable redistribution of wealth, today’s labor actions could move the American middle class out of stagnation and into opportunity.

It’s time to eliminate the assumed status quo of Reaganomics that made the financial interest of the upper echelons of corporations the sole beneficiaries of corporate value growth. Hollywood could trigger a national adjustment. Of course, this will also trigger massive corporate and right-wing political opposition in their fight for the wealthy. That fight is ongoing and will continue through the national elections and beyond.

Income Inequality

Multi-million-dollar payouts to CEOs of Hollywood corporations by self-focused Boards of Directors are the direct result of Reaganomics. For four decades, they have refused to share the increased value of the corporations with the workers who create the products that generate the value.

As workers continue to struggle for living wages, which have not kept up with the economic growth of America, corporate Boards of Directors lavish upon CEOs and executives multi-million-dollar payouts. There is a principle, an illogical one, that Boards of Directors follow that envisions CEOs of mega-corporations as “entrepreneurs” to be rewarded as if they were lone visionaries creating their own entrepreneurial start-ups. This delusional nonsense must be stopped. Profiteering that benefits only corporate executives — value extraction instead of value creation is the primary cause of the stagnation of America’s middle class.

In the past, union workers envisioned themselves as middle class. Now the middle class must envision themselves as workers unionizing for greater benefits.

All this is happening in the time of digitization and AI where human-powered labor is seemingly less important than roboticized labor. This is a fallacy. Humankind will always find productive ways to contribute to society; it is the essence of human activity and is inevitable as such. Furthermore, during this age of AI and digitization, profit margins are in the 70% range. Imagine using the actors’ image as AI and not splitting the 70% equitably with them.

All humans should benefit from this great wealth. Look at Apple’s reports and you will see that while we the people are buying less material goods (at lower profit margins), we are relying more and more on their digital services (70% profit margins) which include Apple streaming services.

AND, speaking of a need for human services, when you need help, you need to speak to a human, not a machine. Have you tried reaching a human on the telephone? You may wait an hour on the phone to do so; we need human labor. Recently trying to call my insurance company (one of the great corporate profiteers) I had to wait for 90 minutes for three consecutive days to reach a human so I could change my auto policy from being on hold to active. Same with roadside services and even 911 when I called to report a fire that just broke out in some brush off the freeway. Non-digital services — like automobile insurance companies, and roadside assistance absolutely need humans to answer the phones but the wait time before reaching them is so long because their employers, being non-digital, claim not to have enough money for human services! Humans need humans when they need help and our society needs help now more than ever.

Taking Action

Right now, the Writers Guild of America West and the Writers Guild of America East, “WGA,” with about 25,000 members, are striking against the Hollywood studios represented by the Association of Motion Picture and Television Producers, “AMPTP.” “The AMPTP currently negotiates 80 industry-wide collective bargaining agreements on behalf of over 350 motion picture and television producers. AMPTP member companies include the major motion picture studios (including Paramount Pictures, Sony Pictures, Universal Pictures, Walt Disney Studios, and Warner Bros.), the principal broadcast television networks (including ABC, CBS, FOX, and NBC), streaming services like Netflix, Apple TV+, and Amazon, certain cable television networks, and other independent film and television production companies.”[9]

In an unusual show of support and unity, the Writers’ strike against the AMPTP has the support of several other unions and guilds in Hollywood.

The Screen Actors Guild — American Federation of Television and Radio Artists, “SAG-AFTRA,” which represents 160,000 members and whose annual pay averages just $40,000 (almost 40 percent below the national average), is now in negotiations for a new contract to replace the one that expired on June 30. The SAG-AFTRA board entered negotiations with a strike authorization overwhelmingly approved by actors in advance in anticipation of AMPTP’s revealed (inadvertently by a member) goal of financially crippling the unions by dragging out negotiations.

The Directors Guild of America, “DGA”, with about 20,000 members and whose contract also expired on June 30, approved a new contract with the AMPTP ON June 23, 2023. DGA board Steven Spielberg, Christopher Nolan, Ron Howard, Ava DuVernay, and President Lesli Linka Glatter recommended the new film and television contract and DGA members ratified it with a vote of 87% in favor to 13% opposed from the 6,728 members who voted out of 16,321 eligible members. Aware of the ongoing strike by the writers and the ongoing negotiations by the actors, the DGA issued a statement, saying “The DGA didn’t bargain in a vacuum. We stand united with writers, actors, and all crew members in our shared fight to move our industry forward. We support the actors who are in negotiations and the writers who remain on strike, and we will stand with the IATSE and Teamsters when they negotiate their agreement next year. We won’t be satisfied until we all have fair contracts that reward us for our creative work — we must create a vibrant, sustainable industry that fairly values us all.”[10]

Vocally supporting the WGA and SAG-AFTRA in their negotiations is the powerful Teamsters Union, which represents many crafts including drivers, location managers, and others. The Teamsters contract, representing 12,000 showbiz employees, expires on July 31. Teamsters Director Lindsay Dougherty told the WGA, “Our Teamster members are going to be with you side by side.”

Also supporting the WGA is the International Alliance of Theatrical Stage Employees, “IATSE,” which last month negotiated their new contract with AMPTP. “IATSE supports the workers represented by the Writers Guild of America West and the Writers Guild of America East in their collective fight to win a fair contract,” IATSE president Matt Loeb said. IATSE represents 100,000 showbiz workers in technical and cinema/television set positions.

Workers demanding their fair share of the multi-million-dollar incomes now lavished solely on the corporate executives could finally set in motion a correction of the damage to America’s middle class by Reaganomics’ redistribution of wealth four decades ago.

Showbiz rank-and-file middle-class workers must work hard to seize this opportunity and create a new future. Not only has Reaganomics “hollowed out the middle class,” but it also paved the way for Trumpism.[11] As America prepares for the next presidential election, and as we face another possible Trump presidency, this issue alone should make us strive diligently to reverse the damage of Reaganomics.

National Implications

Four decades of Reaganomics has so infiltrated American society that it now sounds like heresy for workers to demand incomes and working conditions that reflect their contribution to the value of corporations, but prior to the Ronald Reagan presidency, that was “The American Way.” The middle class in America had been the envy of the world, representing the true strength of our country. The American middle class was an achievement of the best ideals of America, created over the past century by workers fighting for their rights to be strong and live the American dream.

Reaganomics reversed that, driving society backward towards pre-middle class history, redistributing wealth to what it had been when there were only the rich and the poor. Now, extreme income inequality means the middle-class stagnation has served to increase obscene payouts to corporate executives and their cozy Boards of Directors.

Although it’s only four decades old, Reaganomics has become sacrosanct, as if it were the de facto origin of our country’s strength. That is not so, and its constant imposition on us must be stopped. The solidarity and actions today in Hollywood — and Greater Los Angeles — could rebuild America’s middle class and protect American democracy. This is the time to stand up and be counted, even more so because national budgets are swinging away from culture toward greater military spending.

Assessment Of Reaganomics

There have been many other factors contributing to the stagnation and diminishing of the middle class in America, but most of it was triggered by Reaganomics. If you want to read more on this, go to Robert Reich, Thomas Piketty, and Paul Krugman. [6]

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[1] Semega, Jessica, and Melissa Kollar. “2021 Income Inequality Increased for First Time Since 2011.” U.S. Census Bureau, September 13, 2022. https://www.census.gov/library/stories/2022/09/income-inequality-increased.html

[2] Schlozman, Kay & Brady, Henry & Verba, Sidney. (2017). Growing Economic Inequality and Its (Partially) Political Roots. Religions. 8. 97. 10.3390/rel8050097. https://www.researchgate.net/publication/317115332_Growing_Economic_Inequality_and_Its_Partially_Political_Roots

[3] Quartz, “A new IMF study debunks trickle-down economics”, June 16, 2015 https://qz.com/429487/a-new-imf-study-debunks-trickle-down-economics

[4] Denning, S. (2021, May 2). Why Business Must Shift from Value Extraction to Value Creation. Forbes. Retrieved from https://www.forbes.com/sites/stevedenning/2021/05/02/why-business-must-shift-from-value-extraction-to-value-creation/

[5] The Washington Post. “The Middle Class Income in 2023.” The Washington Post, June 3, 2023. https://www.washingtonpost.com/business/interactive/2023/middle-class-income/

[6] Robert Reich, former Secretary of Labor under President Bill Clinton, has written extensively about the negative impact of Reaganomics on the middle class. In his book, “Aftershock: The Next Economy and America’s Future,” Reich argues that Reaganomics led to a “hollowing out” of the middle class, as jobs were moved overseas and wages stagnated. Reich, Robert B., 2013. “Aftershock: The Next Economy and America’s Future”. New York, Vintage Books. https://amzn.to/45LfkXf

Thomas Piketty, a French economist, wrote about the negative impact of Reaganomics on the middle class in his book, “Capital in the Twenty-First Century”. Piketty argues that Reaganomics led to a “great divergence” in wealth, as the rich got richer and the poor got poorer. “Capital in the Twenty-First Century”, 2014, Cambridge Massachusetts: The Belknap Press of Harvard University Press. https://amzn.to/42nusaC.

Paul Krugman, a Nobel Prize-winning economist, wrote in his book, “The Age of Diminished Expectations,”[8] about the negative impact of Reaganomics on the middle class. Krugman argues that Reaganomics led to a “lost decade” of economic growth, as the middle class lost ground to the rich. Krugman, Paul Krugman, 1997. “The Age of Diminished Expectations, 3rd Edition: U.S. Economic Policy in the 1990s”. MIT Press Books, The MIT Press, edition 1, volume 1, number 0262611341, December. https://amzn.to/45DCsqR

[9] Wikipedia. (n.d.). Alliance of Motion Picture and Television Producers. In Wikipedia. Retrieved May 30, 2023, from https://en.wikipedia.org/wiki/Alliance_of_Motion_Picture_and_Television_Producers

[10] Directors Guild of America. “DGA Membership Ratifies New Contract by Overwhelming Margin.” DGA News, 23 June 2023, https://www.dga.org/News/PressReleases/2023/230623_DGA_Membership_Ratifies_New_Contract_by_Overwhelming_Margin.aspx.

[11] Komlos, John, 2019. “The Road to Trump Began With Reaganomics & the Loss of the Middle Class”, Duke Today, January 29, 2019 https://today.duke.edu/2019/01/road-trump-began-reaganomics-loss-middle-class-economist-says

Michael R. Barnard is a filmmaker, writer, and actor, a member of SAG-AFTRA. He is currently developing the independent feature film THE TWINK MURDERS. His information is at IMDb https://IMDb.me/MichaelRBarnard and at LinkedInwww.linkedin.com/in/michaelrbarnard