Monday, March 26, 2007

The Re-empowerment of Labor

In a recent article in the LA Times, "The Upside of Retiring Down Under", author Kelly Candaele was comparing the better retirement situation for workers in Australia as opposed to those in the US. In explaining the disparity, she said that, today, in America, "...organized labor...represents only 8% of the private sector workforce," implying that the US labor movement's decade long collapse--and the disintegration and undermining of its negotiated union pension plans--are in no small measure at the root of US aged's retirement dilemmas.

The US labor movement...unions...are now but a pale shadow of their former Twentieth Century self, both numerically (as a percentage of the working force) and in terms of their real social/economic power. Unions the that century were the primary income distribution vehicle in the whole America society. The US union movement could be credited in no small measure with the economic rise of the US Middle Class. Led by such labor leaders such as Samuel Gompers, John L. Lewis and Walter Reuther--and yes, even to Jimmy Hoffa--labor's tough negotiations in collective bargaining with its capital and business colleagues increased labor's share of the economic pie, and provided much of the impetus for higher wage raises, the establishment of pension funds and hospital/surgical insurance/benefits for workers.

US union power and influence peaked in the 1960s.

In the 1970's and 1980's the overall America economic pie was shrinking relative to its position in the world. In the early 1980s President Ronald Reagan and fellow conservatives, bolstered by the Chicago school of monetarists and free enterprisers, went on the attack: they exercised his Republican controlled Congress's muscle to weaken labor law--the first blow was struck in staring down and defeating the air controller union (in the latter's desire to use the strike as a bargaining tool). Reagan spoke forcefully in justification of, and proselytized for, the productive class--owners and capitalists and entrepreneurs--to be freed from the economic/demands/shackles of labor; primarily what he saw as labor's unfair ability to strike and cripple industry. The electorate listened, and through their representatives in Congress, acted. Labor Law was weakened.

The productive class did not stop there. They bolstered their attack on labor 'excesses' with another argument: the need for even lower labor costs. In order for American business to compete in a global economy, against countries who were not burdened with the higher labor costs, US workers had to learn to compete 'on a level playing field' for jobs with foreign low-waged workers (i.e., take less pay for the same work) or American business would locate overseas where the labor was cheaper and all US jobs would disappear. It was the 'take-less-wages-or-lose-the-job' argument.

Workers took less. They no longer had strong labor law to argue their side...a consequence of which workers gradually saw their wages diminish relative to the past. This led to another consequence: why join a union and pay dues when they can't do anything for you. Hence: only 8% of today's private workforce is unionized!!!

Lets look at where labor's relative position since Reagan and the 1980s (and I candidly admit I'm arguing correlation here, not coincidence.) Worker wages have flattened while corporate profits have risen. More and more households are peopled with two-worker families in order to support the same Twentieth Century middle class lifestyle. New worker pension plans are increasingly self-supporting or non-existent; and many of the ones that do exist are either defaulted by pro-business corporate bankruptcy laws, or pay increasingly less.

At the same time, management's share of the benefits of free enterprise has skyrocketed, exemplified by in managements salary-multiple of an average workers wage rate. What was once 40- to 50-to-1 management-to-worker ratio in the US, the ratio is often now 1000 to one, often more. Creating a furtherance of this wage disparity, the taxes on those managerial millionaires/billionaires has decreased! Not only are the rich getting richer in overall salary, they are able to keep more.

In spite of labor's belt-tightening, jobs are still fleeing overseas; or are being taken increasingly in the US by immigrants, legal and illegal, always eager to work for less. Little wonder why the mainstream Republican party, exemplified by President Bush, seem so lenient and tolerant toward immigrants (they are ready to establish guest worker programs at the drop of a dollar). Lower labor costs for business trump all other national considerations.

The country's wealth is back. The 'productive' class--capital, entrepreneurs, and management--freed from many labor constraints (modern workers might argue from even the constraints of fairness as well) have brought the country back with innovation and enhanced productivity. The overall pie is large size now--pizza size, in fact. Management has taken the first few slices, the hottest and the ones with the most cheese. Its time to pass the pizza plate around. Labor laws must be made stronger to that labor can secure its fair (larger) share of the (larger) American pie.

"Wait! Hold on!" business leaders would scream. We are still competing with low-wage countries. We still need to hold down labor costs. OK, the workers should say: hold down management costs, too. Aren't we all--labor and management--competing with these same foreign companies? Aren't stock options and salaries part of the competitive cost of a company's product? Hasn't American labor bee part of the citizenry/electorate that has voted and continues to vote for a political/economic climate so that business can flourish--so much so that the billion of Chinese dollars are investing in everyday. Has not that dedication to political freedom and legal democracy earned the electorate--which includes workers, in fact, as a majority-- a right to not only share the responsibilities of free enterprise competitiveness but also to reap some of the rewards. Isn't what's good for the goose good for the gander?

The entrepreneurial class might ask themselves: Is increasing economic disparity what's behind the Democratic Party resurgence in Congress; not just the war in Iraq?

True, the Republican administration has conducted some high-profile government lawsuits against the most egregious economic lawbreakers. But putting a few of the greediest capitalists--the CEOs of Enron, Worldcom, Adelphia--in jail, while these actions may prove a great symbolic move on behalf of the average worker against corporate executive greed, I would argue that re-empowering labor laws--and the workers bank accounts--would be a more substantive...and in the long run--smarter--move. A sullen, underpaid workforce will do as much damage to a company--and a national economy--as a sullen, underpaid CEO; perhaps in the long run, more.


Blogger Glen Peck said...

2:39 PM  

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