>> Tonight, how the wage gap could be destroying America.

In his provocative new book, Michael Lynn argues that our biggest problems are political polarization and cultural wars, or -- rooted in the suppression of organized labor.

We take a closer look at the wage gap in America as MetroFocus starts right now.

♪ >> This is "MetroFocus," with Rafael Pi Roman, Jack Ford, and Jenna Flanagan.

MetroFocus is made possible by The Peter G. Peterson and Joan Ganz Cooney Fund.

Filomen M. D'Agostino Foundation.

Barbara Hope Zuckerberg.

And by Jody and John Arnhold.

Bernard and Denise Schwartz.

Dr. Robert C. and Tina Sohn foundation.

The Ambrose Monell Foundation.

Estate of Roland Karlen.

Rafael: Good evening and welcome to MetroFocus, I am Rafael P Firman.

The decline in family for mission social connection and politics inflamed by culture wars and conflict over racial and gentle -- gender identity are crisis that many Americans think are shaking the country to its foundations.

In his new book, best-selling author Michael Lynn argues that these dystopian trends are worsened, if not because, by a more fundamental crisis, low wages.

He further argues that contrary to conventional wisdom, low wages are not caused by the irresistible market forces of a global economy, but rather by the systematic destruction of the bargaining power of American workers by the country's elite.

Joining us now to talk about his new book, hell to pay, the suppression of wages destroying America, Michael Lynn.

Michael, welcome to the program, thank you so much for joining us.

>> Thank you for having me.

Rafael: Michael, you open with an excerpt from Frederick Douglass's 1871 article on cheap labor, which shows that employers exploiting workers is nothing new to American labor history.

What is different?

About the exportation of workers in America today?

>> Some of the forms of exportation that American reformers campaigned against in the 19th century like indentured servitude, bringing in foreign workers who are bound to a single employer, this is alive and well and growing with every congressional session.

The visa program for tech workers, pH 28 guestworker programs, for agricultural labor, these are exactly the sort of indentured servant programs that labor reformers battled after abolishing child slavery in the United States.

-- chattel slavery in the United States.

The distention between organized labor and the public sector exists, but the share of private sector workers have -- has collapsed to 6% and falling today, lower than it was under Herbert Hoover, you.

In many ways we are seeing a regression to labor practices which people in 1950 and 1960 thought were things of the past.

Rafael: Were going to talk about all the practices that employers are still carrying out in order to destroy the labor movement and to suppress wages in a moment, but first of all, as you summarize it, the generally accepted rationale or explanation for the current state of affairs is, quote, the polarization of wages in between first century of the United States accurately infecting the skills demanded by the new globalized high-tech economy.

In other words, the global economy made me do it.

You say that this is the big lie, why.

>> It's just a monster fully falls.

If you look at other similar countries, in East Asia like Japan or Western Europe, they have all been affected by globalization just like the United States.

But they had not seen the collapse of work bargaining power and the extremes of inequality that you do in the U.S..

If globalization were the reason for this, we should see similar results in other countries.

And we don't.

United States is unique.

To the degree in which we have wage polarization and the collapse of collective bargaining, the most important form of Parker -- worker bargaining power.

>> You write about many practices that employers use and are still using to bust unions or keep them from rising again.

And to otherwise suppress wages.

These include breaking the rules of employment practices, what you call loss rule, engaging in what you call global labor arbitrage, which you have touched on, out shoring jobs and importation and exploitation of immigrant workers.

Most recently, full throttle adaptation of the so-called diversity ideology.

There's more, but let's take these one at the time.

What are some of the examples of the bosses reading the rules of the game?

>> In many jobs when you sign a contract, there is a lot of fine print.

Sometimes the fine print contains a noncompete clause.

Where when you quit and you find out that you signed this clause saying you would not compete for a rival of the company.

In the same industry.

And the purpose of noncompete clauses in employment contracts is to prevent employers from threatening to go to -- employees from going to other employees in the same field.

The flipside of a noncompete clause is an illegal but widespread practice of employers called no Poach agreements.

Employers secretly collude with each other and they agree not to hire former employees of other employers, that sounds weird, why would they do that, it's an employer cartel, within the same industry.

They all collaborate to prevent any workers from bargaining for higher wages with anybody.

As I point out in my book, helped pay, Silicon Valley and many other firms engaged in this anti-labor practice.

With the 2000-2010s, ricotta and had to pay fines by the Justice Department because this is illegal.

But this is one of the methods where you may not have humans but you have single individuals negotiating with employers.

Even then, the enormous bargaining power that the average employer has is not enough.

The average private sector worker works for a company with 500 people or more.

Even in the absence of these contract clauses, it is ludicrous to say that a janitor, when seeking a job with a company that has 500,000 members , somehow is bargaining on an equal basis.

Rafael: The way that they wake -- break the rules, the laws of unionization, makes it difficult for you to be able to get a foothold in the company.

Once they do, it takes forever to organize.

>> As I argue in my book, the U.S. labor system was flawed from its beginnings in the 1930's because it is based on enterprise bargaining.

What that means is if you have a company like Amazon or Starbucks, you have to unionize every individual Amazon warehouse, every individual Starbucks coffee house.

This was not a big problem in the 1940's and 1950's, because the labor law was written when you had the big three.

You had a few big steel companies.

Now we have lots of tiny service sector firms and because of the flaws in the legislation itself.

It is almost impossible to organize a lot of industries.

And individual firms have an incentive not to do it under the bargaining system because if they do unionize and they pay more in wages prices go up, that makes them less competitive.

Rafael: Let's move onto the practice of offshore jobs.

There's a history to it.

If you could quickly give us the history of how it happened and how it was sold to Americans as something that would be good for the country?

>> There is the official history that it started in the 1990's and we were getting rid of old industries.

But the veterans of these old industries would be retrained and learned to coat and joined the knowledge economy of the future and write software.

Instead of making steel.

That was the official story.

The real story, as I argue in hell to pay, is that we have had two waves of what economists call labor arbitrage, where you move the same production from a higher wage area to a lower wage area.

The first wave was within the United States itself after World War II up until the 90's when companies shut down their plants in the largely unionized states of the North and move them to the right to work antilabor states in the south and west.

Of course, New York State suffered enormously from this migration of manufacturing.

To the antiunion South.

If you think of this as labor arbitrage, the next step was simply going global.

After the Cold War.

Instead of moving your factory from upstate New York to Mississippi or Louisiana, you move to South China or to Mexico.

Rafael: It was so transparent that Ross Perot was right, that something like NAFTA would suck the jobs out of this country.

Nonetheless, the argument was made and it was believed by many that this would be a win-win situation.

What was the argument?

>> The argument was where you had the Japanese at the time making the flying goose theory, a goose flies and other fall -- others follow it.

As countries develop and economies develop, they shed old industries through developing competent -- countries and develop new industries.

The problem with that is, in the modern world where we have multinational corporations, even if some radically new industries developed in the United States, the corporation that develops it , whether a startup or HI Corporation, can instantly license it to low-wage countries abroad like China or Mexico or they can create their own offshore assets.

The premise in the 90's, which turned out to be false, was that the U.S. would have all of these high-tech industries in the future and the rest of the world would be doing old-fashioned, primitive manufacturing.

Rafael: Other form of global arbitrage, the importation and expert Tatian of immigrant workers should not be exaggerated.

You would add that it would be intellectual despondent to ignore the harm done.

Give us examples of the harm done.

>> When you read the editorial pages of major newspapers, they will say things like economists have shown that immigration has not affected wages.

That's not true.

I demonstrated with citation.

There are two major studies by the National Academy of Sciences in 1996 in 20 which both conclude that low-wage immigration drives down wages for citizens and members who are competing.

You have to go granular rather than making generalizations.

And there are case studies showing how the availability of a large pool of low wage allowed meatpacking industries, for example, which was a high-paying middle-class unionized industry in the 50's and 60's in the Midwest, but is now one of the smallest and party -- worst paying industries.

The janitorial industry was largely African-American, it was unionize, paid good salaries.

In California, in the 1960's and 70's, and that was destroyed.

The unions were destroyed and wages brought down because there was this large pool of workers to whom the jobs could be transferred.

There are all kinds of immigration, humanitarian immigration, skilled immigration, I'm not against immigration in general, but it is simply a fact that in certain industries, construction is one of them, employers have weaponized immigration in order to suppress wages and undermine unionization.

>> You write that in treating immigration as economic -- an economic issue, you are violating the biggest taboo of the bilateral the liberal regime that has ruled since Clinton.

I get what you mean.

Is it not the case that the strong antipathy towards treating immigration as a matter of labor economics emerged at least on the left precisely because of the rise of nativist groups that were using the economic rationale to bash immigration?

In other words, political groups who seemed to have no problem with the destruction of the labor movement and no problem with the suppression of wages in any other form except through immigration?

>> There have always been nativist through the 1920's where we had the racist quota system this committee against certain Europeans.

Asian immigration had been shut down earlier for the 1950's with racially exclusive immigration acts.

But I don't think your argument makes sense frankly.

You are arguing that economists that this harmed labor, but they decided not to say this in public.

For fear of helping Pat Buchanan.

I don't think that history shows that.

All the way up until the 1990's, organized labor was more restriction next then organize business for obvious reasons.

The people pushing massive unskilled immigration were either agribusiness or manufacturing, and they were libertarians.

Private sector labor unions, and a sinker -- single out the AFL slap -- CIO, but the labor union became such a powerless force that they are dependent on the Democratic coalition.

They are a minor wing of one party.

Rather than an independent force pursuing the interests of American private sector labor as a whole.

>> Let's talk about woke capitalism, so-called.

You called -- argued most recently that employers, at least for corporations, are embracing diversity ideology as a means to further erode workers wages and bargaining power.

How do they do that?

>> One way that they do it is that they have employed affinity groups, which means identity, they will bring employees together in the firm and say we are going to separate you by race.

By race, by gender, bisexual orientation, and go talk within your racial or gender group about how much you have in common with people of your own race.

Or your own ethnic heritage.

Or your own sex or gender.

What could be more blatant a form of divided rule for your work force that?

-- than that?

>> There -- let organized labor is to organize everybody regardless of race or religion or whatever.

I don't think it is paranoid to see this as a device by which management is making it more difficult for people to collaborate as employees apply -- across racial and ethnic and gender lines.

Rafael: One of the most interesting sentences of your post is your discussion on welfare.

You argue that welfare can be pro-employer or pro-worker.

What's the difference?

>> Pro-employer -- pro-worker welfare increases the bargaining power of the worker in selecting jobs.

For example, if you have longer stretches of unemployment insurance, then you can hold out longer before you are so desperate.

You can wait for a better offer.

If that is brief, you have to take even a bad job as quickly as possible because you're running out of money, and we saw this in the debate about the stimulus, as you may remember, where members of Congress like Lindsey Graham are arguing that it was too generous and people aren't going back to work quickly enough.

But all kinds of things, whether childcare provisions, the age of working, what -- one of the unspoken goals of entitlement reform, it's not that the U.S. is bankrupt, we could pay for Social Security was slightly higher payroll taxes or other revenues, it's to have more workers competing for jobs in the labor market.

If you cut Social Security payments by pushing back the retirement age to 70 or 75 or 80, you can still retire early, but at a huge cut.

That way you have more people working.

One of the fascinating things to be writing this book about was how ingenious the employer lobby is.

And I just wish the employer lobby for business.

I am a great fan of dynamic industrial capitalism and I have argued for it my whole career.

But it is not dynamic industrial capitalism when you are competing not on the basis of new products or increase productivity but on nickel and dining your workers down to squeeze out a little bit more profit from lower wages.

>> In the bottom line is that welfare in this country is basically subsidizing corporations.

If you privatize the gains and socialize the cost.

>> We have two separate systems and have had them since the 1930's.

The highway toward living wage social insurance system where if you worked 40 hours a week, your work port.

You did not need welfare assistance.

Now we have somewhere between a quarter and a fifth of the American workforce consisting of the working poor.

They work full-time jobs 40 hours a week and they are tour -- too poor to support themselves, much less a family.

But we don't let them start.

We are a generous country.

So we talk up if it wages with welfare programs, housing vouchers, earned income tax credit, food stamps.

And as I point out in my book, this is socializing the cost.

Of low wages.

While privatizing the benefits.

The benefits go to the employers and some consumers, prices are slightly lower.

You and I, the taxpayer, are subsidizing the consumers of products and services made by low-wage workers which you and I do not concern.

Rafael: Let's move on for the sake of time, unfortunately.

As I mentioned in the introduction, you believe that the suppression of wages is destroying the cup -- country because it is worsening or perhaps even causing for other family destructive crises.

Demographics, identity, and lyrical.

I know that this is unfair, in about five minutes or less, could you explain what these expressions are and how they are linked to low wages?

>> The low -- the fertility rate is far too low.

In most parents -- most parents say they want to or more children but they end up having less, and the reason they give is they don't have the money.

There comes our barrier to having as many kids as they want.

The social prices -- crisis is the fact that young Americans have fewer friends than any generation in American history, and I argued that for working-class Americans this is because it is very hard to make friends in the workplace.

If you are a worker, unions used to have social activities.

The low-wage economy contributes to social alienation and polarization as we saw earlier with the employee affinity groups, you can basically use your identity statuses in struggling for openings and jobs and promotions with your fellow workers.

It tends to be a divisive thing.

And finally, political polarization.

That is the demise of labor as a bipartisan, nonpartisan force in American politics.

It still exists in a vestigial form in the Democratic Party.

But when organized labor was powerful, it has to deal with what Americans say where primary concerns.

Vacations, benefits, health care.

As a result of the collapse of labor unions, the main influence on political parties comes from college educated people per Democrats and Republicans.

They are materially well off, and they want to fight over culture war issues rather than do anything.

Rafael: What is to be done, you dedicate a third of the book to policy proposals to reverse these destructive trends.

Unfortunate, really have a couple minutes left.

Can you give us, perhaps, one of those policy proposals, I will have to read the book for the last -- rest.

>> There is no magic to look for the entire economy.

We need to concentrate on cleaning up the worst industries first.

Most of the low-wage jobs in the U.S. like fast food, leisure, retail, and a few others, construction.

And rather than try to unionize everybody in these fields, we could use a device which Andrew Cuomo revived to do with fast food, the wage board.

The governor or the Mayor appoints representatives of labor represented is of all of the firms in an industry where they come up with mineral wages and benefits and scheduling.

For that particular low-wage industry.

And the advantage of the wage board approach is that the contract applies everybody at the same time.

No individual firm is disadvantaged by doing the right thing.

>> There are many proposals, as I say, they are all fascinating, I urge people to get the book to look at them.

Michael, what happens if the powers that be, who are very powerful, are successful in not allowing the necessary changes to happen, what happens then?

>> The U.S. becomes a thermocouple he like Brazil or Mexico, where you have a very affluent oligarchy and inequality -- enormous inequality.

This was true in the South between the Civil War and the civil rights revolution, you don't get a left right politics, you get politics of wealthy connected insiders and periodically demagogues like Donald Trump and Bernie Sanders.

I'm using demagogue in a technical sense, somebody representing alienated people.

Who feel betrayed by the system.

And if we don't want to have a constant clash between an insider establishment and angry outsider demagogue, we have to rebuild the bargaining power of all American workers.

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MetroFocus is made possible by the Peter G Peterson and Joan Ganz Cooney Fund.

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And by Jody and John Arnhold.

Bernard and Denise Schwartz.

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The Ambrose Monell Foundation.

Estate of Roland Karlen.