The Ghosts of the Rust Belt

 

BOB GARFIELD From WNYC in New York, this is On the Media, I'm Bob Garfield. The so-called Monongahela miracle that build a health care economy in the ruins of big steel was built on the backs of the vulnerable.

 

GABRIEL WINANT I mean, the absolute first thing you have to say is it was hot

 

STEELWORKER 1 One of the guys came up and took his goggles off, and the skin came off with it because it was so hot.

 

[CLIP]

 

NEWS REPORT The men and women in these industries built the most powerful union of all time. [END CLIP].

 

[CLIP]

 

STEELWORKER 2 Come to go to jobs, he would be separated. Whites wanted good jobs. Blacks to the lowest wage job. [END CLIP]

 

GABRIEL WINANT People were collectively essential and individually disposable.

 

[CLIP]

 

RONALD REAGAN They just call it the free market, and it's what gives our children and their children an economic future. [END CLIP]

 

NEWS REPORT Whether they were nurses or kitchen employees, these hospital workers used to be encouraged to think of themselves as dedicated angels of mercy – and angels. Don't worry about money.

 

BOB GARFIELD How Pittsburgh reveals the broken promises that drive our economy. Coming up after this.

 

[BREAK]

 

BOB GARFIELD From WNYC in New York, this is On the Media, I'm Bob Garfield. You can't not start with the tallest building in Pittsburgh, Pennsylvania, the old headquarters for United States Steel. It's a black monolith, symbol and fortress of industrial power soaring in the now pristine Pittsburgh sky above the confluence of three mighty rivers. But it's vista has changed. Gone is the golden sulfurous haze. Gone or the belching smoke stacks, blazing furnaces and slag lined river valleys snaking along the Appalachian foothills. The industry that sustained a region, girded the world's infrastructure and underwrote a now vanished way of life has long since crossed oceans.

 

[CLIP].

 

[PROTESTERS SINGING, "Solidarity"]

 

NEWS REPORT These are unemployed and laid off steelworkers in the Monongahela Valley, the area around Pittsburgh that was the birthplace of American steel.

 

PROTESTER What do we want?

 

CROWD Jobs!

 

PROTESTER When do we want them?

 

CROWD Now!

 

NEWS REPORT These workers are angry because they are losing their place in the American dream. [END CLIP]

 

BOB GARFIELD Decades into this new Pittsburgh, the vanished economic sector, the vanished mill jobs and the vanished industrial working class, persist in the American imagination. Back in March, Joe Biden used a Pittsburgh labor hall as a backdrop for his infrastructure plan, and it's good union jobs – and then again in his address to Congress.

 

[CLIP]

 

JOE BIDEN Look, think about it. There is simply no reason why the blades for wind turbines can't be built in Pittsburgh instead of Beijing. No reason. [END CLIP]

 

BOB GARFIELD Donald Trump, who lied to the coal belt about reviving the moribund mining industry, used the city to define what America first is all about: Pittsburgh, not Paris. And when John Kerry stumped here in 2004, he invoked Depression era poet Langston Hughes.

 

[CLIP]

 

JOHN KERRY He said, let America be America again. Let it be the dream that it used to be. For those whose sweat and blood, whose faith and pain for those whose hand at the foundry, something Pittsburgh knows about. For those whose plow in the rain must bring back our mighty dream again. [END CLIP]

 

BOB GARFIELD But they were all seeing ghosts. Steel City, is now healthcare city, representing almost 1 in 4 jobs in the region. Some 92,000 of them work for just one employer; the sprawling, omnivorous University of Pittsburgh Medical Center, UPMC, whose logo now adorns the black skyscraper sentinel of the Three Rivers. But this is not just a case of a clean economy displacing a filthy one. To historian Gabriel Winant, author of The Next Shift: The Fall of Industry and the Rise of Healthcare in Rust Belt America. The story of economic transformation in Pittsburgh is the story of disparity, of wealth, income and political power that did not vanish when the smokestacks came down. As we shall see, it was a metamorphosis that has so marginalized those 92,000 hospital workers that their employer has claimed they're not employees at all: ghosts, too, it turns out. In this hour, we'll explore with Winant how the saga of twPittsburghs reveals in grim detail how America has strayed so perversely far from its founding promise. Gabe, welcome to On the Media.

 

GABRIEL WINANT Thanks for having me. Nice to be here.

 

BOB GARFIELD We're going to approach this as a story in three acts, beginning with Steel. It was an industry built on minerals like iron ore, limestone and coal and hard labor. Folklore celebrates a hearty Croat named Joe Magarac, whose last name translates to Jackass in Croatian and who the story goes, only knows how to work and to eat like a donkey.

 

[CLIP]

 

FOLKSONG [SINGING]...and I had that furnace eating out of my hand, but the blasted furnace wouldn't get enough, so I jumped on in, I'm made that tough, Mighty Joe, Mighty Joe, Mighty Joe Magarac! [END CLIP]

 

[SONG CONTINUING]

 

GABRIEL WINANT I mean, the absolute first thing you have to say is it was hot. It was dangerous, it was filthy.

 

[CLIP]

 

STEELWORKER 1 One of the guys came up and took his goggles off and the skin came off with it, because it was so hot.

 

STEELWORKER 2 When you'd come out of that thing, hey, completely dirty. Just like a coal miner. And this stuff had gotten all into my skin all around my privates and everything like that. It got in and I had to go to the doctor because we just peeling, you know, that was a hell of a thing.

 

STEELWORKER 3 One of my friends died recently from the interview. He got a whole seam of iron  fell on him from a crane and crippled him for life.

 

FOLKSONG [SINGING] Mighty Joe, Mighty Joe, Mighty Joe – MAGARAC [END CLIP]

 

GABRIEL WINANT Yeah. You know, I quote a memoir in the book written by a steelworker who describes trying to understand what was under the mills, rusty sheet iron skirts that caused our house to rattle and shake. Why did the old men in the neighborhood curse and worship it? The cursing and the worshiping together is a window into how profoundly industrial work shaped this whole world.

 

BOB GARFIELD Many steelworkers were able to establish solidly middle class lifestyles. What was the evolution that got them there?

 

GABRIEL WINANT The turning point really comes during the New Deal.

 

[CLIP]

 

NEWS REPORT In 1936, the men and women in these industries made up their minds to do something about their deplorable conditions. They built the most powerful union of all time, the United Steelworkers of America. [END CLIP]

 

GABRIEL WINANT They leverage these employers again and again in these strikes in '46, '49, '52, '54, '56 and '59.

 

[CLIP]

 

NEWS REPORT The sixth major shutdown since World War Two. [END CLIP]

 

GABRIEL WINANT The steel workers were powerful enough that they could make the deals a problem for the president.

 

[CLIP]

 

NEWS REPORT President Eisenhower expressed weariness at the unbending attitude of both sides.

 

EISENHOWER I'm not going to try to assess any blame. I'm getting sick and tired of the apparent impasse in the settlement of this matter. [END CLIP]

 

GABRIEL WINANT Every steel industry strike in those years got settled in the White House.

 

[CLIP]

 

NEWS REPORT A solution had been found in America's number one labor crisis. Production was resumed on the basis of a wage increase of 18 and a half cents an hour, offset by a price increase of five dollars a ton. [END CLIP]

 

BOB GARFIELD You write about one of history's little noticed policy decisions directly related to steel workers, fringe benefits: the public-private welfare state. What does that mean?

 

GABRIEL WINANT It was thought during the New Deal that eventually they would be able to establish what we would today call Medicare for all. Harry Truman didn't succeed doing that. And instead, the unions that had been agitating for that decided, you know what, let's just get the employer, whether it's GM or U.S. Steel, to provide a plan through the private sector. This is really where the idea that you get your health insurance from your job, comes from. And over the course of the 50s, collectively bargained health insurance spreads really rapidly across the working class.

 

BOB GARFIELD Health care was a life changing benefit for steelworkers and eventually millions of other employees around the country. A western Pennsylvania academic named Jack Metzger was moved to write, quote, If what we lived through in the 1950s was not liberation, then liberation never happens in real human lives.

 

GABRIEL WINANT Wages were going up year after year. They would have these strikes and they would win. They had to find benefit pensions in a way that we don't have now. They had this health plan that got better and better. You couldn't imagine how few dollars steel workers and their families had to put toward their health care. By 1959, steelworkers didn't even have to contribute to the premium. They also had power on the job itself. The 1959 strike was fought over the question of whether or not managers could just change job assignments arbitrarily and they couldn't. I mean, this was written into the contract. Management can change the equipment, and then they could reassign people if they did that. But they couldn't just say, you know what, two of you were doing this job the four of you used to do, that wasn't allowed, and again, that's hard to imagine today.

 

BOB GARFIELD In the post-World War Two period, the American steel economy was essentially a global steel economy, a de facto cartel that for decades didn't need modernization or manufacturing efficiency to prosper, it just raised prices. Management and labor fed at the same trough with ultimately disastrous consequences. Meantime, though, you write a whole social order had developed around single male, mostly white breadwinners.

 

GABRIEL WINANT The way that you get access to these benefits is either you get a job as a steel worker if it's Pittsburgh, or you make yourself the legal dependents of a steelworker, which is to say, be his wife or be his kid. This creates these kind of stratified layers of who is in on this golden age and who's not in on it and what you have to do to be in on it. There are people who don't have such an easy time getting jobs of steelworkers that's racialized. And there are people who have to kind of put up with what their husbands say because their husband is how they have access to all this. So a system that's supposed to deliver broad based prosperity, but is that internally divided, was a really unstable configuration.

 

BOB GARFIELD So who or what was the arbiter of all that?

 

GABRIEL WINANT Well, ultimately, the middle is the arbiter, right? The middle is the reason these people are here. It's the reason their parents, their grandparents came to Pittsburgh. It's what's giving them access to wages, benefits, all of this. Ultimately, the household and the family are subordinate to it.

 

BOB GARFIELD And in these mill towns, you say, lives were hyper gendered and also racialized.

 

GABRIEL WINANT Men were heavily overrepresented and women underrepresented in wage work in Pittsburgh, even compared to the 1950s norm. That didn't mean women weren't working. The kinds of work that they did happened more outside of the money economy. Now, that was true for white folks, for African-Americans, even this kind of tenuous security that white people had. African-Americans really couldn't hang on to it much at all. And that meant that African-American women had to bring in wages at much higher rates than white women did already starting in the 50s and 60s. And then that kind of goes up over time. And, you know, going back all the way to the New Deal itself, domestic work, which was obviously heavily assigned to women, was not regulated by labor law. And from the 40s onward, health care work also was not protected by labor law or minimum wage or ours regulations. And so when women do have to go get these kinds of jobs, they are exiting the protected circle of the New Deal state that their husbands work in. It's like they're going into a different country.

 

BOB GARFIELD The racialized structures in the mills were a sort of informal but nonetheless omnipresent Jim Crow.

 

[CLIP]

 

STEELWORKER 1 When it goes to jobs, you would think they're separated. Whites went to good jobs. Blacks went to the lowest wage jobs.

 

STEELWORKER 2 All the craft jobs and high paying jobs went to white folks. See the black folks and all the dirty jobs.

 

STEELWORKER 3 Then a white man would come in and you had to train him. The next two weeks he was your boss [END CLIP]

 

GABRIEL WINANT in steel and this was common. And a lot of big industries in this time, seniority, which rules everything in a unionized factory, was determined at the level of the department rather than the whole factory. Even if you were accumulating seniority, you are a long term employee. You are unlikely to be able to change what part of the plant you worked in. And so that created these racialized traps. In the blast furnace, which was a hot and dirty and hard job, in the open hearth, which is a hot and dirty and hard job. And worst of all, in the coke ovens where they baked coal to turn it into fuel was disproportionately work that was assigned to African-Americans and also African-American workers because they couldn't get out of these undesirable departments. When there is a cyclical downturn, they would be the first out and the last to be hired back in.

 

BOB GARFIELD And if I understand your book correctly, the unions were complicit in this.

 

GABRIEL WINANT Absolutely. So organizations like the UAW or the United Steelworkers or the United Mine Workers would accept African-American members and sometimes embrace them. They supported civil rights nationally at the political level, but they didn't really want to disrupt this small scale pattern within the plant. Who got the good jobs and who didn't get the good jobs. White men who had the good jobs, more or less wanted to be able to pass them down to their sons. They certainly didn't want the integration of the seniority lines. And there weren't really enough African-Americans inside the union to disrupt that politically, so straightforwardly.

 

BOB GARFIELD We discussed earlier how the cartel's grip on the global market created a spiral of higher wages and higher prices and higher wages and so on. Isn't that more or less the definition of an inflationary cycle?

 

GABRIEL WINANT Yeah. So if you're going to organize working class prosperity through attaching large groups of workers to big kind of monopoly employers, then this is a risk that you're going to run into. And already in the late 50s, you see this strange thing happen where inflation is starting to go up and at the same time unemployment is starting to go up. And those two things are supposed to be opposite. It's supposed to be that one or the other that we would know that phenomenon in the 70s later is stagflation, right? It came back in a big way, but it's a kind of intrinsic feature of the New Deal state, the public-private welfare system and these big industrial corporations that were its private sector component. This is a structural fault in that system.

 

BOB GARFIELD Meantime, another kind of inflationary phenomenon. Steelworker families really leaned into healthcare. Now, the work was taxing, as you've said, and dangerous and the environment was foul, but does that entirely explain the medical gold rush of the 50s, 60s and 70s?

 

GABRIEL WINANT No, it doesn't. So there's a couple key things. First of all, I think it's actually hard to overstate how significant it was for people who did backbreaking work all day long, felt cast off and looked down on and treated like mules and different ways that they could go to this kind of modern house of science that is the hospital and, you know, have someone pay attention to them and take care of them. You know, in an effort to reduce health care use, one hospital does an experiment of trying to enroll people in getting mental health services, you know, some kind of therapy and seeing does that affect how much they use the rest of the health care system? And the answer is yes, actually. So there's reason to see the health care system as a whole doing a kind of social work for this population. But it's also important to say steelworkers were at their most numerous at the time of the Korean War, and their numbers diminish steadily after that. What that means is that young men have a harder and harder time getting into the industry because of the seniority system. Therefore, the workforce is getting older over these decades. And so you have these people who have this really good insurance, who are increasingly an elderly population, have these social needs and have these health needs. And that drives very intense use of the health care system. In 1979, at the kind of end of this cycle, the Pittsburgh region generated 1.6 inpatient days in the hospital per capita that year. That's about triple our national rate today.

 

BOB GARFIELD So all these seeds have been planted in the economy and the culture, from health care consumption to fiscal policy to racial segregation, to the devaluation of non-industrial labor to the patriarchy which seeds maybe didn't fully germinate until the steel economy began to erode. How did it look, the beginning of the beginning of the end?

 

GABRIEL WINANT Well, you know, at first it didn't look like anything much. The union president would look at the numbers and he would say, gee, there are 50,000 fewer steelworkers this year than there were 5 years ago. But it wasn't for quite a long time that people started to realize something profound is changing and has already changed.

 

BOB GARFIELD Denial ran high, but then in September 1977, just across the border in Ohio, it all began to accelerate.

 

[CLIP]

 

NEWS REPORT in Youngstown and nearby Campbell, they have a name for the day disaster struck. They call it Black Monday.

 

STEELWORKER 1 It's Hard to believe this is happening after working here for so many years. Hard to believe they were put out on the street, and don't know what we're going to do. [END CLIP]

 

GABRIEL WINANT So between 1977 and about 1986, millions of industrial jobs are lost in places like Youngstown, like Pittsburgh.

 

[CLIP]

 

NEWS REPORT The U.S. Steel Corporation announced today that it will close all or part of more than 20 of its plants in Cleveland and Elmira, New York, Trenton, New Jersey, and three towns in Pennsylvania, Johnstown, Shiffler and Ambridge. [END CLIP]

 

GABRIEL WINANT There's basically a kind of localized Great Depression that happens. I mean, unemployment rates rise up to near 20 percent. Whole communities are devastated, really profoundly, in a very short period of time.

 

[CLIP]

 

PROTESTER People are losing homes. The American dream has been turned into the American nightmare, with job loss, families breaking up and suicide. [END CLIP]

 

GABRIEL WINANT The population, which has been already aging, and also shrinking, as the young leave, that speeds up really intensely. There are increases in homelessness. In a couple of these steel mill towns suicide rates, double. Depression rates, alcoholism, domestic violence, all of these kinds of indicators of social distress are increasing really rapidly.

 

BOB GARFIELD In 1983, President Ronald Reagan offered some choice words of consolation.

 

[CLIP]

 

RONALD REAGAN How could the major employer in the town, the very lifeblood of the town, close its gates and lock its doors? This was as inconceivable as the town itself closing down. But we know the plant can close no matter how essential it is to the employees and the townspeople. We know that America's economic strengths change and grow in different directions, sometimes without regard to the people who serve the old industries. This is called a free market, and it's what gives our children and their children an economic future. [END CLIP]

 

GABRIEL WINANT You know, Reagan's message to the steelworkers was always learn to code, basically. You know, keep up. The question of whether or not the steel mills could have been kept open, should have been kept open. We could debate that. We could argue about whether there was another path, but what I don't think we could really say is that it had to go in such a harmful and injurious way for the people who were displaced from this industry. Right. That they had to be thrown to the wolves.

 

BOB GARFIELD Coming up from the ashes rises health care. This is On the Media.

 

ELOISE BLONDIAU Hi, listeners, I'm Eloise, a producer at On the Media and I'm working on a story on mental health, specifically how to describe it nowadays, and I need your help. Have you found new words to make sense of how your mind has been affected by the pandemic? Here are some. I've had: pandemic brain or fog, hitting a pandemic wall. I've also noticed older words like nervous breakdown or burnout take on new meaning. What words are you using to describe your pandemic mental state and which words fall short? Record a voice memo and email it to onthemedia@wnyc.org, and please include your name and where you're calling from. You may just be featured in an upcoming show. Thanks.

 

[BREAK]

 

BOB GARFIELD This is On the Media, I'm Bob Garfield. We've just heard so much foreshadowing involving New Deal era compromises in labor law, health care provision, worker solidarity, civil rights and compensation of at home work. In this next act, plot lines merge. And as Ronald Reagan bluntly foretold, out of a disintegrating industrial economy emerges a very different one. Gabriel Winant, University of Chicago historian and author of The Next Shift, offers a parable from Braddock just up the Monongahela River from Pittsburgh. Siblings Erline Colburn  and Lou Berry  grew up there in the 60s with every expectation that the world, as they knew it, would endure.

 

GABRIEL WINANT But by the time it was Lou's turn to look for that work, it wasn't there anymore. He got another factory job working for Westinghouse, briefly. Then he got laid off from there. He was on the margins of the economy for a while, and eventually he got a job working for a hospital and his sister Erline married a steelworker. Then the same thing hit her family, too. And after some time doing this and that, like her brother, she also wound up working for the hospital.

 

BOB GARFIELD You graphed the numbers of people employed in metal production and health care and social assistance between 1950 and 2010 in Pittsburgh. And your graph looks like an X, a near perfect inverse correlation between mill workers and hospital orderlies, with the two sectors crossing paths around 1980.

 

GABRIEL WINANT Yeah, Coburn  and Berry are flesh and blood data points of that in that they come from a world where you can expect steel work and they're perfectly reasonable for thinking that world will continue. But they happen to live in the wrong moment for that. They happen, to live in the moment when one line crossed the other. They had to figure out how to navigate off of the old path and onto the new one.

 

BOB GARFIELD There's another crossroads I want to talk about. Earlier, we alluded to a seeming anomaly in the creation of the proto-welfare state pursuing not government run infrastructure such as Medicare it would eventually achieve, but an employer based health insurance system. But that strategy intersected fatefully with another quirk of the times. The classification of hospital workers as something other than employees.

 

GABRIEL WINANT Well, I think there's a couple of levels at which we want to understand that, one is cultural. Hospital work, like lots of different kinds of intimate work, work that generally has been assigned historically to women, has been seen as dirty in some way or saintly in some way, by one way or another is not just kind of part of the regular economy. That goes way, way back. That goes back to slavery, to domestic servants in the 19th century, to Florence Nightingale. And it goes back to the idea that the family is a kind of sacred space untainted by commerce. All of that informs the structure of the healthcare industry as it's taking off, and it's part of the reason why health care institutions were expected to be not for profit, to be philanthropic. The same expectation was that mirrored for those who worked for them.

 

[CLIP]

 

NEWS REPORT Hospital employees were among the most underpaid workers in the country. Whether they were nurses or kitchen employees. These workers used to be encouraged to think of themselves as dedicated angels of mercy. [END CLIP]

 

GABRIEL WINANT So those things together explain why going back to the 30s and 40s, health care got excluded like domestic service got excluded from the protections of labor and employment law, such as minimum wages and unionization rights.

 

BOB GARFIELD In 1940, when health care workers at Western Penn Hospital in Pittsburgh sought to form a union, 26 hospitals in the region ended up joining West Penn in opposing the unionization, and the hospitals prevailed. What did the decision augur for the future of health care work?

 

GABRIEL WINANT It predicted the logic by which health care work would be codified and institutionalized as outside of the economy, as philanthropic, as charitable. And that got written into labor law, and it meant that the whole health care industry then got built up as a kind of adjunct to service. The insiders, the people whose work was recognized, which was secure, who did have that good insurance.

 

BOB GARFIELD This something less than employee status wound up enshrined in the Taft Hartley Act, and as recently as 2013, the University of Pittsburgh Medical Center, UPMC, was telling federal regulators that the tens of thousands of workers had claims on its website are not employees, at all. Meantime, for Earline and Lou and thousands of others, these divisions of labor often broke down along racial lines. The X industrial workers in the not so great migration to health care were often the African-Americans who'd been marginalized in the mills. And that racial aspect of downward mobility did not go unnoticed. Here as Martin Luther King Jr. in 1968, shortly before his assassination, talking to New York health care workers.

 

[CLIP]

 

MARTIN LUTHER KING JR. I can remember just a few years ago, right here in this city, that hospital workers made wages so inadequate that it was a shame to say to anybody these people were being paid. [END CLIP]

 

BOB GARFIELD Dr. King was speaking to the Local 1199, which went on to spearhead organizing efforts in Pittsburgh hospitals. How did that campaign play out?

 

GABRIEL WINANT That campaign emerged out of a group of kind of militant hospital workers in New York in the 60s who saw the opportunity to take their union national. They began trying to organize in 1969 and 1970 hospitals up and down the East Coast and across the Midwest, but crucially without the protection of labor law. So what labor law does is it gives employees a set of mechanisms for, in theory, compelling an employer to deal with that. You hold a vote. If you win the vote for the union, the boss has to bargain. You can try to force your employer to do that without those rules. But it's kind of the Wild West. That's what Local 1199 was going to have to do. And the theory was these workers who were making such low wages had worked in such poor conditions and were to such great degree African-American especially, or in New York also Puerto Rican and other kinds of immigrant groups would be militant because of the experience of the civil rights movement and the way that it, combined with their economic situation, just their own militancy in action and organization, could overwhelm the employer. Even if you didn't have the law on your side. This worked in a lot of cases. It worked in New York, Philadelphia and Baltimore. It did not work famously in Charleston. South Carolina is a fantastic film about this called I am Somebody.

 

[CLIP]

 

PROTESTER More than a thousand of us went to jail during strike. I was in jail twice, my kids were in jail too.

 

 [CHANTING IN BACKGROUND] I am somebody! Somebody, I am! I am somebody! [END CLIP]

 

GABRIEL WINANT But what they found in Pittsburgh was that there weren't enough African-American workers relative to the white workers who were not compelled by this strategy, particularly when the employer began firing activists, began race baiting the union, began using all of the tools that an employer can use if they're not constrained by labor law, These kind of weapons that you couldn't use in a steel mill. And so this campaign to organize the hospitals in Pittsburgh failed.

 

BOB GARFIELD Meanwhile, the industry was booming. In the midst of larger regional financial devastation, this was kind of counterintuitive, wasn't it?

 

GABRIEL WINANT Once you had Medicare and Medicaid passed in '65, plus you had these really good insurance plans for industrial workers who are starting to reach retirement. The things that put people in the hospital beds are detached and maybe even run opposite to the normal signs of economic prosperity, right. So people getting old. It's not necessarily good for the economy as a whole under this system, but it's good for hospitals. People getting poor. Perversely, they might fall under Medicaid coverage and health care will be one thing that they can still buy. And people getting sick, you know, obviously is going to drive consumption, so people could check in their dad. Maybe his daughter can't look after him right now because she had to go get a job. They check him in for his chronic pain that he has. And the hospital hangs on to him for a couple of weeks, sort of almost like a nursing home. That was good money for these Steeltown hospitals, for decades,

 

BOB GARFIELD Hyper expansion was financed directly and also indirectly by the government. How so?

 

GABRIEL WINANT So there's two ways. The direct way is that hospitals under Medicare can pass through their capital costs to a significant degree for reimbursement. If you're going to get paid back for building more, you should probably build more. Historically, they had recruited donations and these kinds of things for capital expansion, but in the 70s, hospitals realized we should just borrow that money. And policymakers tried to give them ways of doing that because it's good for policymakers if the hospital system is growing and building a new wing and their constituents get new services. So, hospitals get access to municipal bond markets, which are subsidized right there untaxed. And a hospital is a pretty safe investment for a creditor, especially a hospital in a place like Pittsburgh between Medicare and Blue Cross and Medicaid. You have a pretty good sense that this hospital is going to be able to make its bond payments.

 

BOB GARFIELD So the game was rigged in favor of big hospital holding companies. Meantime, average pay was what, relative to minimum wage?

 

GABRIEL WINANT Well, minimum wage comes into effect in health care at the end of the 1960s. And so, you know, at the bottom of the health care hierarchy, people start to make just above minimum wage. In the early 70s, the union campaigns, even where they don't succeed, manage to drive up wages a little bit. Typically, you know, managers kind of want to throw them a bone, but it's common for people to be making in the 1970s a couple of bucks an hour at the bottom of the wage scale, and  that stretches all the way up to doctors, obviously, who make more. It's a very, very stratified industry.

 

BOB GARFIELD And work schedules, job security?

 

GABRIEL WINANT Oh, none of that at this point. Some of the kind of greater instability in terms of work schedules and job security, that stuff would get more destabilized in the future in the 80s and 90s and up to the present. But even in the 70s, because there is so little formal protection in this industry, people are quite vulnerable on all these dimensions.

 

BOB GARFIELD But as the industry mushroomed, it continued to be viewed as a community service based on the habits and spirit of care ingrained, as we've discussed in the region's working class culture. But to me, it sounds like these massive organizations just expropriated the communitarian ethos of the culture as a pretext for naked exploitation. Am I going to Eugene Debs here?

 

GABRIEL WINANT Well, I don't think it's too -  nothing is too Eugene Debs for me, but, you know, I think that the way to understand it is there's a period of time in the 1970s when a lot of people are getting what they want out of the healthcare industry. But you have these people who have this good insurance and they're getting a lot of services out of it, and you have these administrators who are realizing, you know, we could run this hospital a little bit more like a profitable corporation that we might have thought in the past. Let's borrow some money, let's expand a little bit, medicare will pay the bills. So, it's meeting a lot of different kinds of needs all at once, making a lot of different kind of constituencies happy. Even as Pittsburgh is kind of in ruins. Hospitals are borrowing and growing and borrowing and growing. As that happens on a national scale, it starts to freak out policymakers in Washington.

 

[CLIP]

 

RONALD REAGAN Yes, we're doing everything. We can to cut waste and root out cheaters, but there are only two budgets in the world larger than our '83 Health and Human Services budget of 274.2 billion dollars. The total budget for the United States and the Soviet Union. [END CLIP]

 

BOB GARFIELD Reform is needed. And in 1983, this "reform," and I guess I have to use quotes there was enshrined in law.

 

[CLIP]

 

NEWS REPORT The president of the United States today celebrated a bipartisan triumph on Social Security, one he could not have won without the help of Democrats. [END CLIP]

 

GABRIEL WINANT From the passage of Medicare in 1965 until 1983, the way that providers got paid by the government was called retrospective. That's to say they did what they thought was required by the case. Then they basically sent a bill to Washington saying, OK, here's what that cost. Give us 102 percent of that.

 

BOB GARFIELD Cost-plus.

 

GABRIEL WINANT Cost-plus Congress put a stop to that in 1983. They said, OK, we're going to go to a prospective payment. The federal government is going to come up with a list of five hundred diagnoses. You know, when you admit a patient to a hospital, you pick which diagnosis they have and you'll see what the price is for it. You can treat them however you want. You keep them for a day, you can keep them for a month – that's your problem. You know how much money you getting, any overrun you have to eat. This is great for hospitals that are equipped to do complicated, intensive interventions. So in Pittsburgh, transplants are the kind of classic example of that. That means academic hospitals, their margins go up. But these community hospitals that are across the street from the steel mill in each of the steel towns can't keep someone for two weeks, check in on them every day and feed them and take care of them for a kind of minor complaint in the way that, frankly, you could before. There's no margin in that for them, and what that means is that they all get  destabilized and then get bought out.

 

BOB GARFIELD Now, the Clintons would come along in 4 years to try to reinvent health care financing, but meantime, the society was paralyzed on the horns of what you call a trilemma.

 

GABRIEL WINANT So the trilemma is a problem that gets faced, I think, structurally by all kinds of deindustrializing societies. It looks like this: when you can increase productivity, then you can generate surpluses, and that's sort of the basis of a golden age in the 50s and 60s. In the Human Services, that's not really possible in the same way. And from the perspective of policymakers, it means that there are three things that they want, of which they can only have two. This is the trilemma. The things that they want are low unemployment, high wages and low public spending. And they can have any two of these three. So if they deregulate the labor market, low minimum wages, low unemployment insurance, weak unions, wages will be low and jobs will probably get created at low wages. And this is what we did in the United States, basically. Right. We created a ton of low wage, crappy jobs, but our unemployment rates are generally lower than they have in Europe, but there were other choices available even within these kind of hard parameters. You can, for example, accept more public spending to take these low productivity service jobs into the public sector where you can pay people more, where there's not this tight link between operating profits and the well-being of employees. That's not the choice we made. We made the choice to make people depend for their survival on this kind of work in ways that have quite brutal consequences.

 

BOB GARFIELD Coming up, distortions in the marketplace and their human toll. This is On the Media.

 

[BREAK]

 

BOB GARFIELD This is On the Media, I'm Bob Garfield. As we've heard in the telling of a rising health care economy, we must deal with a number of bewildering paradoxes. One is the Orwellian newspeak that asserts employees are not employees and so largely unprotected by regulation and collective bargaining. Another is that, on the one hand, from the manufacturing days, health care evolved into an entitlement. But on the other hand, it is propped up by exploiting the labor, the very people made vulnerable by the death of manufacturing. The median wage in the United States for nursing assistants, phlebotomists, medical assistance and home health care aides in 2019, according to Brookings, was 13 dollars and 48 cents an hour. 28,000 dollars a year, just above the poverty line of 26,500 for a family of four. This on top of a brutal shift schedules and sometimes harsh working conditions. Gabriel Winant introduces us to a UPMC worker named Nyla Payton. 

 

GABRIEL WINANT Nyla Payton is a medical assistant working for the University of Pittsburgh Medical Center. She helps people call in, make appointments and understand things the doctor said. I asked her. are there other primary conditions you hear from people about. She said, black lung and mesothelioma, both pathologies caused by living in the kind of ruins of industrial capitalism. You know, her phone rings and rings and rings. There's no one but her to take those calls. The damage that one economy did to a whole set of bodies appearing in the form of mesothelioma and black lung was now taking a toll on her body in the form of her having to sit at her desk all day, not able to go to the bathroom because she was trying to take care of those people.

 

BOB GARFIELD And furthermore, she is in medical debt to her own employer.

 

GABRIEL WINANT So there was this process over the 80s, 90s into the 2000s of consolidation in Pittsburgh. Big academic hospitals buying up a little ones, the insurer getting freaked out to the insurers trying to consolidate. And the insurer tries to buy some hospitals and the hospital system by insurance companies. And they try to each not accept payment from the other one to build these monopolies that enable them to keep prices high. If you don't have gold plated health insurance, as most working class people don't, the toll of that is going to fall on you. And it's not a perk that these hospital systems give to their workers. If they get free care, that's not how it works. And they, as much as anyone, have to bear the brunt of these rising costs which leave them in these kind of companies store like debt relationships.

 

BOB GARFIELD Another paradox is the notion of communitarianism, which you invoke at various points. Yet UPMC Health Systems is something like a 20 billion dollar organization running at approximately a 2 billion dollar annual profit. When community hospitals they acquire run at a loss, management shuts them down, leaving the local community without services. Which doesn't sound very communitarian to me. What kind of beasts are these holding companies? Whom do they serve and to whom do they answer?

 

GABRIEL WINANT UPMC is a nonprofit, as are many of the big academic hospital systems. Cleveland Clinic would be another classic example, which is on and off the biggest employer in Ohio. Johns Hopkins Hospital System in Maryland is again the biggest employer in its state. However, these big nonprofit hospital chains have come to behave in very market conscious ways, right? They're very, very concerned about accumulating and maintaining market share, about having leverage over insurers and about holding wages down. It's not as though they have shareholders in the same way as a for profit corporation might, but it's difficult to figure out how to distinguish them from a for profit corporation. There's a story I tell in the book. A new accountant has been hired at one of the kind of more successful hospitals. He said to his boss, "Hey, I'm looking at the account sheets here. And, you know, I'm seeing something funny. It looks like here is all of the revenue that we're making beyond our costs. Isn't that what we would call profit?" His boss says, "No, no, no, that's not profit, that's net aggregate revenue after losses" or something like that. The accountant says, I don't understand why we're using eight words and we can use one.

 

[BOB CHUCKLES]

 

BOB GARFIELD From wages to publicly financed debt to the dubiousness of growth as a measure of success, it makes you wonder the city that likes to think of itself as the miracle on the Monongahela, miracle?

 

GABRIEL WINANT I'm sure you've heard someone say this, right? Oh, it's great now. It's had this recovery, there's  all these young people that these tech companies. There are neighborhoods in Pittsburgh where you can buy a 16 dollar sandwich. Now to the broader thing that you're getting at in your question. We are undergoing a kind of polarization of the entire economy. There are some sectors that generate a lot of profit, you know, attract a lot of capital but don't generate a lot of employment. You know, in Pittsburgh, because of Carnegie Mellon, there's a lot of robotics in this kind of thing, and that's a big source of the city's story of its own recovery, but, you know, not that many people in the grand scheme actually work in that industry. Not in this country. So the industries like tech, like finance, that are major drivers of profit and accumulation are not drivers of employment. And the industries that are big drivers of employment like health care, are actually not major centers of profit. Generally speaking, hospitals and nursing homes are actually pretty low margin operations. So employment is on one side, and profit and accumulation are on another side. And the two are not necessarily so directly linked, as we might once have thought.

 

BOB GARFIELD If the trilemma you mentioned dictates that payrolls must be suppressed to achieve low unemployment and affordable public expenditure, how to de-impale the health economy from the horns of the trilemma?

 

GABRIEL WINANT I think there's a lot we can do encouraging unionization, you know, raising staffing mandates, improving safety standards. There's a lot that would improve working conditions and caring conditions in the immediate term, but until the provision of care is extricated from the logic of market discipline, then the question of how to make either patients or workers or both pay for it is going to recur and recur and recur. But once you're talking about what we call de-commodifying or socializing, so large a sector of the economy, I mean a trillion dollars here, trillion dollars there, pretty soon you're talking about real money. We're not really the same kind of society anymore, after we do something like that. You know, there'd be huge sectors of the labor force shielded from the kinds of market pressure that have brought us the bloodbath of COVID-19 just to take the most recent example. So that's a really a very big social transformation,

 

BOB GARFIELD But not a new one. Right? I mean, it was a decision made long ago with public education whose employees do not get free market sorts of wages and benefits. But it's a hell of a lot better than what the health care sector enjoys.

 

GABRIEL WINANT Yeah, and it's, I think, the best example we have for what it could look like to allocate care democratically as opposed to through market processes. It's not that there's no conflict over allocation of education resources. Far from it, obviously. But we can all easily think in our own community of all of the conflicts over who gets to go to what school and whether the teachers union want versus what is the city saying you can give them and all of these kinds of things. But these processes are subject to democratic politics, right? People actually can organize and they can agitate and they can vote. They can unionize, do all kinds of things. They can protest. And it affects how education is provided. It affects teachers working conditions. It affects the conditions under which students learn. And I think it's very difficult to say that both education in terms of students experience and also as a place to work are not both much, much better for that fact.

 

BOB GARFIELD It was rejected in the midst of the revolutionary New Deal that was rejected in the administration of Harry Truman. It was rejected in the Clinton administration. Some degree of reform was achieved in the Obama administration and was immediately subject to hundreds of attempts at repeal in the 2020s. Guilded or not, do you believe that circumstances have converged to make this politically achievable?

 

GABRIEL WINANT I feel like I can predict with some confidence that the logic of the trilemma will continue. That we shunt more and more both social problems into the healthcare system and labor, into the healthcare system to manage social problems. As that's the work that people can get, then the health problems associated with economic inequality will continue to persist or get worse and the cycle will continue and continue and continue unless there is major political change. There are so many people who have been dragged into this system to work for it and to depend on it for their care. And so that's created these potential constituencies who scale is just enormous, right? Again, the largest sector of employment in the country. And just think about everyone, you know, who has gotten gouged by the hospital, or by a doctor, right, who's gotten screwed over by their insurance company, I mean, it's just kind of unimaginably vast potential constituency. And the question is one of organization. What would it take to articulate the common interest that these millions, millions and millions of people would have in a more humane, democratic care system?

 

BOB GARFIELD Gabe, thank you very much.

 

GABRIEL WINANT Thank you, Bob. Really appreciate it. This is a great conversation.

 

BOB GARFIELD Gabriel Winant is a historian at the University of Chicago. His book is called The Next Shift: The Fall of Industry and the Rise of Healthcare in Rust Belt America.

 

We are left then not with simple answers or immediate solutions, but an understanding of the forces that shaped the sooty colossus of steel and manifested again in the antiseptic corridors of health care. Not ending socioeconomic inequities, but dressing them in scrubs. As the Biden administration dedicates itself to infrastructure, Winant has given us a close look at the decaying steelwork beneath a gleaming economic sector and at the working class it dis-serves, but change, and political will, require a reckoning. Is this the moment? Can we even imagine a day when the looming silhouette of the former U.S. Steel building casts not a sinister shadow, but is instead a lighthouse illuminating a humane and equitable course? Maybe the question is, how can we not? 

 

That's it for this week's show! On the Media is produced by Leah Feder, Micah Loewinger, Eloise Blondiau, Rebecca Clark-Callender, and doing this week's heavy lifting: Jon Hanrahan. Xandra Ellin writes our newsletter. Our technical director is Jennifer Munson and our engineer this week was Adriene Lily.

 

On the Media is a production of WNYC Studios. I'm Bob Garfield.

 

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