Tuesday, April 12, 2011

How the Other One Percent Lives

As of last year, reports show that 1% of the American population owns 35% of the nation's privately-held wealth.  The bottom 80% (salaried workers) hold 14%.

Two weekends ago, a Minneapolis newspaper article revealed that Ameriprise Financial CEO James Cracciolo receives $715,000 in perks and another $18 million in salary.  I looked at those figures and blinked.  My investments are with Ameriprise.  How much of the fees I pay the company go to him, I wondered.  When I complained to my Ameriprise financial adviser, she told me that the article had touched off a firestorm of outrage among both clients and Ameriprise employees.  Will Jimmy C. repent his greedy ways and accept less? Not on your life. He and the boards of directors of these big corporations have the system wired so that, throwing their shareholders a bone now and then, they keep the big bucks flowing right into their growing coffers.

It was ever thus. No matter what you call them--kings or corporate heads--these privileged few get the huge cuts of the pie.  Take, for example, Carnegie Steel in 1891.  Workers at the Homestead mill made between $1-2 a day for laborers to nearly $8 a day for the few top skilled workers (such as melters).  To earn this pay, they worked in extremely dangerous conditions for 10-12 hours a day, six days a week.  The infamous strike of '92 came about because the company (that is, Carnegie and Frick) decided that the skilled workers, members of the Amalgamated, were making too much.  When the union contract ran out, the company declared that it would henceforth negotiate wages only with individuals.  Translation:  Goodbye, collective bargaining.  After that, it was literally every man for himself.

To make matters worse for the workers, in 1893 a "panic," brought on by the overbuilding of railroads, resulted in a series of bank failures. Guess who lost their jobs. For the next decade, the unemployment rate in the U.S. stayed around 10%.  Greed fuels bad decisions by corporations and banks. These trigger an economic crisis, and millions lose their jobs. 'Sound familiar?

While my dad was alive, my mother kept her views of the Strike to herself. My father had definite opinions about the Strike (after all, he had written his senior paper at Pitt on the subject), and Mum had no desire throw in her two cents' worth. While she had no direct connection with US Steel, she and her family relied on it for their livelihood.  As in the 1890s,  the town economy was completely dependent upon the mill throughout most of the 20th century.

However, after Dad's death, Mum broke her silence.  We were discussing one of the books about the Strike (see sidebar), and I commented that I was appalled at how strikers attacked the Pinkertons during and after the battle.  Her immediate response was to cry: "They were fighting for their lives!"  If she had been there, she probably would have been one of the women who ran to the riverbank to stop the Pinkertons from coming ashore.
On another occasion, we were looking at my Grandfather Busch's pocket watches, which Dad, being the only son, had inherited.  The sturdy watch with a nickel case is the one he took to the machine shop daily; the other, smaller one has a 14-karat case.  Mum opened the gold watch and showed me the inscription inside: from the men of the Homestead Machine Shop to G. W. Busch on his retirement in 1937.

"Can you believe this?" Mum asked indignantly. "He worked nearly 50 years, most of these as a superintendent, and the men, not the company, give him his retirement watch. The only thing US Steel gave him was a small pension--and he was one of their top bosses!"  (One can easily extrapolate that the other workers were treated even more shabbily.)

Antique watch specialist Marshall Ferster told me that the gold watch was made in NY in 1922. Ferster says that as was the custom, the watch likely was bought used (from Katilius?) in 1937 with money collected from the men of the machine shop.  They had it engraved and presented it to him as their thanks for his service. (Ferster restored the nickel watch, and I keep it by my laptop, where it cheerfully keeps ticking away as I work.)

Well, all that's ancient history, as Dad used to stay.  US Steel's Homestead Works is gone, as are many of the thousands of people who once worked there.  Still, sometimes a turn of the page in the Business section of a newspaper will bring into sharp focus a fact that hasn't changed in many decades:  The rich get richer, and the poor get poorer.

If this be treason, make the most of it.

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