ECONOMICS - LOOKING GLASS NEWS | |
Workingman's Blues |
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by Harold Meyerson The American Prospect Entered into the database on Sunday, September 03rd, 2006 @ 17:39:42 MST |
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Have a nice Labor Day. Try to forget it's a sick joke. Labor Day is almost upon us, and like some of my fellow graybeards, I can,
if I concentrate, actually remember what it was that this holiday once celebrated.
Something about America being the land of broadly shared prosperity. Something
about America being the first nation in human history that had a middle-class
majority, where parents had every reason to think their children would fare
even better than they had. The young may be understandably incredulous, but the Great Compression, as
economists call it, was the single most important social fact in our country
in the decades after World War II. From 1947 through 1973, American productivity
rose by a whopping 104 percent, and median family income rose by the very same
104 percent. More Americans bought homes and new cars and sent their kids to
college than ever before. In ways more difficult to quantify, the mass prosperity
fostered a generosity of spirit: The civil rights revolution and the Marshall
Plan both emanated from an America in which most people were imbued with a sense
of economic security. That America is as dead as the dodo. Ours is the age of the Great Upward
Redistribution. The median hourly wage for Americans has declined by
2 percent since 2003, though productivity has been rising handsomely. Last year,
according to figures released just yesterday by the Census Bureau, wages for
men declined by 1.8 percent and for women by 1.3 percent. As a remarkable story by Steven Greenhouse and David Leonhardt in Monday's
New York Times makes abundantly clear, wages and salaries now make up the lowest
share of gross domestic product since 1947, when the government began measuring
such things. Corporate profits, by contrast, have risen to their highest share
of the GDP since the mid-'60s -- a gain that has come chiefly at the expense
of American workers. Don't take my word for it. According to a report by Goldman Sachs economists,
"the most important contributor to higher profit margins over the past
five years has been a decline in labor's share of national income." As the Times story notes, the share of GDP going to profits is also at near-record
highs in Western Europe and Japan. Clearly, globalization has weakened the power of workers and begun to erode
the egalitarian policies of the New Deal and social democracy that characterized
the advanced industrial world in the second half of the 20th century. For those who profit from this redistribution, there's something comforting
in being able to attribute this shift to the vast, impersonal forces of globalization.
The stagnant incomes of most Americans can be depicted as the inevitable outcome
of events over which we have no control, like the shifting of tectonic plates.
Problem is, the declining power of the American workforce antedates the integration
of China and India into the global labor pool by several decades. Since 1973
productivity gains have outpaced median family income by 3 to 1. Clearly, the
war of American employers on unions, which began around that time, is also substantially
responsible for the decoupling of increased corporate revenue from employees'
paychecks. But finger a corporation for exploiting its workers and you're trafficking
in class warfare. Of late a number of my fellow pundits have charged that Democratic
politicians concerned about the further expansion of Wal-Mart are simply pandering
to unions. Wal-Mart offers low prices and jobs to economically depressed communities,
they argue. What's wrong with that? Were that all that Wal-Mart did, of course, the answer would be "nothing."
But as business writer Barry Lynn demonstrated in a brilliant essay in the July
issue of Harper's, Wal-Mart also exploits its position as the biggest retailer
in human history -- 20 percent of all retail transactions in the United States
take place at Wal-Marts, Lynn wrote -- to drive down wages and benefits all
across the economy. The living standards of supermarket workers have been diminished
in the process, but Wal-Mart's reach extends into manufacturing and shipping
as well. Thousands of workers have been let go at Kraft, Lynn shows, due to
the economies that Wal-Mart forced on the company. Of Wal-Mart's 10 top suppliers
in 1994, four have filed bankruptcies. For the bottom 90 percent of the American workforce, work just doesn't pay,
or provide security, as it used to. Devaluing labor is the very essence of our economy. I know that airlines are
a particularly embattled industry, but my eye was recently caught by a story
on Mesaba Airlines, an affiliate of Northwest, where the starting annual salary
for pilots is $21,000 a year, and where the company is seeking a pay cut of
19 percent. Maybe Mesaba's plan is to have its pilots hit up passengers for
tips. Labor Day is almost upon us. What a joke. Harold Meyerson is editor-at-large of The American
Prospect. This column originally appeared in The Washington Post. ________________________ Read from Looking Glass News Joe
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