Portside

Like it or not, it’s political Groundhog Day. The Biden/Trump looped tape is rolling, and the contest will again center on the Blue Wall states of Michigan, Pennsylvania, and Wisconsin. Working-class voters will be key.

In 2020, Biden squeaked through while receiving just 36.2 percent of the white working-class vote, according to research for my book, Wall Street’s War on Workers. That’s down from Obama’s 40 percent, and Bill Clinton’s 50 percent. It’s sad that the party of Franklin D. Roosevelt – the party of the working class – now attracts so few working-class voters. There also is troubling evidence that the Biden campaign is losing ground with Black and Hispanic working-class voters.

That’s the reality. But how can Biden change it in 2024?

For starters, he shouldn’t be bragging about a booming economy. For many working-class folks who get bounced from job to job, the so-called Biden boom doesn’t feel all that glorious. What Biden and nearly all elected officials fail to grasp is that American workers are suffering through waves of mass layoffs, more than 30 million losing their jobs over the last 30 years. That includes 260,000 in the booming high-tech industry last year alone, with another 50,000 discharged so far this year.

Biden made a start in his State of the Union address by highlighting how his administration helped the United Autoworkers (UAW) keep open the Belvidere, Illinois, Stellantis facility, saving over 1,000 jobs and perhaps adding thousands more battery manufacturing jobs in the future. But the UAW’s effective strike against Stellantis was the savior, not the Biden administration.

The President should take a page from Donald Trump to directly intervene to stop a mass layoff and take all the credit for it. In 2016-17, Trump pressured the Carrier Air Conditioning to keep 800 jobs in Indiana rather than moving them to Mexico. Polling shows that 60 percent of all voters said that the Carrier deal gave them a more favorable view of Trump. Only 9 percent said it made them view Trump less favorably.

There are many jobs for Biden to save right now in the Blue Wall states.

Stock buybacks kill jobs in Michigan and Pennsylvania

UPS has 500,000 employees (360,000 of whom are members of the Teamsters Union) and revenues of more than $90 billion. Nevertheless, this wealthy company has announced it is laying off 206 workers in New Stanton, Pennsylvania, and another 162 in Livonia, Michigan.

The current administration should demand that UPS and other large corporations refrain from compulsory layoffs. Instead, large companies looking to reduce head count should use voluntary layoffs, offering sufficient funds so that workers are willing to leave. No one should be forced out.

Biden could point out that UPS has plenty of money to fund voluntary layoffs, given that in 2023 it put $3 billion into stock buybacks. He could explain that those UPS stock repurchases artificially raised the price of its shares, enriching its largest stock owners, including big financial firms like Vanguard, BlackRock, JPMorgan Chase, and Charles Schwab. He could make it clear that those Michigan and Pennsylvania layoffs are helping to finance these stock buybacks.

This president could also play his biggest “trump” card: In 2022, UPS, along with Federal Express and Polar Air Cargo, shared a $2.24 billion federal contract. Surely, UPS would understand if it were pointed out that it’s a bad look to take government money with one hand, and then do billions in stock buybacks with the other while also laying off workers.

Greg Hayes, the CEO of United Technologies, Carrier’s parent company, understood this potential threat from Trump very well. As he put it, “I was born at night, but it wasn’t last night. I also know that 10 percent of our revenue comes from the U.S. government.”

Each year, about $700 billion in federal contracts goes to corporations, thousands of them. They should be told, no more stock buybacks, no more compulsory layoffs.

But won’t this cripple corporations? Not a chance. In Germany, the union IG Metall convinced Siemens Energy not to shut down six facilities and lay off 3,000 workers. Instead, the company agreed to voluntary layoffs and to put other products in the six facilities that were initially scheduled to close. No workers were forced out, and no plants were shut down.

The point is that large corporations have enormous flexibility to rearrange their production lines and services. Private equity companies which own many different businesses can easily do the same if they consider their workers as important as their shareholders.

Private Equity Kills Jobs in Menasha, Wisconsin

Atlas Holdings, founded in 2002, is a sprawling private equity firm with fingers in many pies. It plucks out $11 billion annually from 26 different business lines, employing approximately 50,000 people in industries ranging from aluminum processing, building materials, construction services, food manufacturing, packaging, paper, power generation…and on and on.

In 2020, Atlas Holdings acquired the assets of LSC Communications. It then spun off LSC’s book production business as the Lakeside Book Company. In June 2024, Lakeside will shut down its Menasha, Wisconsin, facility putting 339 workers out of work.

Private equity companies like Atlas Holdings make a killing by cutting costs. As Forbes Magazine makes perfectly clear, cutting costs means job loss: “All too often when private equity professionals tout their cost cutting strategies, they do not mention that cost cutting means firing people and taking away their livelihoods.”

What could the Biden administration do? They could call out Atlas Holdings publicly. It’s possible Atlas would not want too bright a light to shine on its vast empire. Maybe they’ve taken on too much debt, which has led to the demise of many companies acquired by private equity companies. Or maybe, like Carrier, they’d greatly prefer a state or federal subsidy to keep the Menasha facility open.

The bully pulpit of the presidency is powerful. Biden should use it right now to send a powerful signal to these Wisconsin workers, and workers everywhere, that his administration is willing to fight for them.

Standing on a picket line, as Biden did with the UAW, is important. Infrastructure bills that create new jobs in the coming years are even more important. But most important of all is saving a job in the here and now. That’s what a good economy means to the victims of mass layoffs.

There ought to be a law.

Biden should also make clear that in his second term he will sign a bill to dramatically curtail stock buybacks, a major cause of mass layoffs and income inequality. In 1982, before stock buybacks were deregulated, only two percent of corporate profits were used for stock repurchase. Today, it’s nearly 70 percent.

He should also rename the 2017 Republican “Tax Cut and Jobs Act” the “Stock Buyback Bonanza Bill.” By cutting the top corporate tax rate from 35 percent to 21 percent, the 2017 tax cut would massively stimulate investments in long-term growth, its supporters said. Instead, corporate stock buybacks increased by 52.6 percent, while new capital investment grew by only 8.8 percent, according to Forbes. At least half of the entire tax cut flowed directly into the pockets of wealthy investors, the primary beneficiaries of these stock buybacks.

Biden should also demand that the Democratic platform this year call for a dramatic reduction of stock buybacks. This would signal to working people of all shades and colors that the Democrats are willing to take on Wall Street to save jobs.

Then again, Wall Street won’t be happy.

Unfortunately, many Democrats still want it both ways, claiming that economic growth is good for corporations and workers, that more jobs are being created than ever before at higher levels of pay, and that’s a win-win for everyone.

But for the tens of thousands forced out of their jobs each month during the current economic boom, the old union song’s challenge probably rings truer:

“Which side are you on, boys? Which side are you on?”

Les Leopold is the executive director of the Labor Institute and author of the new book, “Wall Street’s War on Workers: How Mass Layoffs and Greed Are Destroying the Working Class and What to Do About It." (2024). Read more of his work on his substack here.