Nothing new here. This is an old story. A story that had a brief digression in the decades that followed the Second World War. Those were the days, those 30 glorious years. The decades when labor, and usually white male labor, enjoyed rising wages, health benefits, and job stability. But that social democratic moment proved to be brief, and the same old story has resumed.
One can describe neoliberalism in two words: "Freedom to...." Freedom to buy as many cars as you want, freedom to drink as much soda pop as you can, freedom to sell or fire labor. Social democracy is in essence: "Freedom from...." This distinction was made by Sir William Beveridge in his 1942 "Beveridge Report." FDR used similar language in his 1941 "Four Freedoms" speech—though it did not include the freedom to buy and sell or hire and fire. But my point is this: The workers at Disney are now so poorly paid that many of them end up homeless while still employed. Nearly half have to endure hunger because they can't afford food. And the incomes of 74 percent of Disney's employees can't cover basic expenses. And dental care for 43 percent of the employees has as much reality in it as the Magic Kingdom. So, if you want to understand what the ending of The Florida Project is about read the "Working for the Mouse" report.
But Disney is a profitable enterprise. It makes loads of money. So where is all this money going? A lot of it is towards repurchasing stock so that the value of its shares rises, and this means a large amount of its profits are going directly to its shareholders. And what you must understand is that "some 84 percent of stocks are held by the wealthiest 10 percent of households." (For more on buybacks read Nick Hanauer's 2015 essay in The Atlantic, "Stock Buybacks Are Killing the American Economy.")
That huge tax cut? The one that reduced the corporate tax rate from 35 percent to 21 percent? Know that Walt Disney Company plans to buy $6 billion of its shares in 2018. As a whole, expect the corporate tax cut to generate little to no investments or wage increases. Its main function is to transfer massive amounts of public wealth/value to a few private individuals. This claim is by no means controversial. I'm not saying anything radical. You can read all about it in the conservative Wall Street Journal:
U.S. companies are buying back their shares at an aggressive pace, stirring debates in Washington and on Wall Street about how savings from corporate tax cuts are being used and who benefits most.
Share buybacks announced by large U.S. companies have exceeded $200 billion in the past three months, more than double the prior year, according to a Wall Street Journal analysis of data for S&P 500 companies. Announced buybacks surged in December as lawmakers in Washington finished writing a bill to cut U.S. taxes by $1.5 trillion over a decade, and continued at a robust pace in January and February.
No one is even trying to hide this shit. It's happening with our eyes wide open.
And what we see is this: the US is pretty much done with value creation—that costs money. It's instead a state apparatus that has taken the form of a corporate raider. Value, where ever it can be found, is extracted. And the scarcer this value becomes, the greater the downward pressure on wages will be. Of course, this can only last for so long, but the rich are cheap short-termists; they prefer the value extraction to production.
