Tyranny of the market.

• Position: Increase in corporate profits at the expense of workers; unequal distribution of income

Ain't capitalism grand? AT&T announces it is slashing 40,000 jobs, and its stock rises by $2.625. AT&T wasn't even losing money; in the first nine months of 1995, it earned almost $3 billion.

"This is not one of my favorite days," said AT&T chairman Robert Allen, "but then I'm not one who is in so much pain as some of our workers." No kidding! Allen's total compensation is $5,489,000 a year.

Allen gave the typical corporate rationale for the layoffs. "To the extent we can get in trim, we'll produce better margins, more flexibility, and more cashflow to invest in other opportunities," he announced.

Love that corporate speak, "get in trim." It goes right along with "downsizing," "rightsizing," and other euphemisms for mass layoffs. Next they'll refer to firings as "body sculpting." After these latest layoffs, AT&T boasts buns of steel.

But Allen and AT&T were doing just what good little capitalists are supposed to do: juggling and junking workers to help the bottom line. That's what they're taught to do at Harvard Business School.

And the bottom line has never looked better for corporate America. Profits reached record heights in 1995, as did the stock market.

But there has been no trickle-down effect, as the apologists for the rich once promised. Wages and benefits for workers rose only 2.7 percent in 1995, the lowest since 1981, when such composite data began to be gathered. Not counting benefits, between March 1994 and March 1995, wages and salaries fell by more than 2 percent, adjusting for inflation.

The median household income has been falling for many years now. From 1979 to 1993, it fell 3 percent in real terms while the economy grew 35 percent. Male workers without college degrees have been especially hard hit, as their real incomes have tumbled 30 percent between 1973 and 1993.

To get an idea of how skewed the income distribution is in this country, consider this: in 1990, the richest 1 percent of Americans accounted for as much income as the bottom 40 percent.

When you look at wealth instead of income, the figures are even more staggering. Between 1983 and 1989, the richest 1 percent grabbed 62 percent of the newly created wealth, and the richest 20 percent grabbed 99 percent, as Alexander Cockburn has noted.

So what has the response been by the elite? Much hand-wringing, so compulsively performed at The Washington Post that a rash broke out among its editorial writers. On July 29, 1995, a Post editorialist penned the following fatuous comment about the decline in wages and the inequality of incomes: "Everyone in politics is well aware of these two unwelcome trends, but so far the public discussion of them has been muted," said the scribe. (Is this veiled self-criticism?) "The reason is that no one has been able to come up with plausible and practical ideas for dealing with them."

No one? Anyone ever heard of raising the minimum wage, strengthening unions, or making the income tax more progressive, for starters?

Not the Post, evidently, which concluded by urging deficit reduction, even though cutting government spending will make income distribution even more lopsided.

Robert Reich, Clinton's Secretary of Labor, is not much more helpful. Reich took to The New York Times op-ed page after the AT&T announcement to pine for the day when corporate executives had a more enlightened, paternalistic approach to their workers. His nostalgia is not borne out by a look back at the textile mills, coal mines, and slaughterhouses of a by-gone era, and even Reich concedes that few CEOs will respond to pleas that they behave better.

So Reich's big proposal is to wipe out corporate income taxes for companies that treat their workers well. In the process, he accepts the legitimacy of their hoary arguments against corporate income taxes, claiming that it amounts to "double taxation" - first on corporations, then on investors. This is nonsense, and anyway, bribing corporations to behave better won't work, and it'll cost the Treasury money. Reich's proposal only serves as ammunition for the Fortune 500, which has always wanted to abolish corporate income taxes.

Something much more fundamental needs to be done to dethrone the tyranny of the marketplace. If we can't have socialism today, we should insist on a higher minimum wage, stronger unions, and a steeper income tax. But we need to go beyond these quaint New Deal notions and start campaigning for a guaranteed decent-paying job for everyone, or better yet, a guaranteed livable income.

Otherwise, 80 percent of Americans will remain hostage to the AT&Ts and the GMs-and their cheering stockholders who bid the price up when the pink slips are distributed.

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