U.S. Workers Sinking Fast
Labor Day 2004 was anything but a picnic for the vast majority of America's 147-million-member labor force. No matter how you slice it, most U.S. workers are worse off than they were at this time last year.
The average real wage - that is, adjusted for inflation - has actually fallen over the past year. This in spite of the fact that the economy has grown by 4.7 percent. In other words, even when the economy is growing, most of the people who make it grow aren't getting anything out of it.
This continues a long-term trend - briefly interrupted in the late 1990s - that has dominated the last 30 years. Over the past three decades, the median real wage has grown by only about 8 percent. In other words, the majority of the American labor force has failed to share in the gains from economic growth.
This by itself is an outrage and ought to be a major political issue in an election year. Prior to the "Age of Greed" it was normal for the wages of most workers to grow with productivity. If that had happened over the past three decades, the typical (median) family income would be more than $60,000, instead of the $43,300 that it is today.
This is not a utopian "what if" scenario but rather what would have actually occurred if most American workers had not lost so much bargaining power. Most of this loss stems from policy changes rather than just "market forces." For example, the decline in union membership and strength results from legal and institutional changes that have made it extremely difficult for workers to organize unions and bargain collectively. Tens of thousands of workers are illegally fired each year for organizing or attempting to join a union, and companies can refuse to bargain with unions for years even when they are legally obligated to do so. Human Rights Watch found that the United States had a "culture of near impunity" for employers who violate basic labor rights.
Our trade and commercial agreements with other countries have also been deliberately designed to drive down the wages of most workers, while protectionism for professionals - doctors and lawyers, for example - remains intact. It is no wonder that most of the massive redistribution of income of recent decades has gone from the bottom half of the labor force to professional and other highly-paid employees.
To reverse these trends, we will need real labor law reform that restores collective bargaining rights for American labor. But it will still be difficult to make up for 30 years of losses. So Labor's best hope for the foreseeable future is probably going to be found in universal programs, such as health care, where workers are currently losing ground as employers cut back on benefits and increase employee co-payments. Most European workers have not only universal health insurance, but also four or five weeks of vacation a year, paid family leave and often subsidized childcare as well. Their societies are no richer than ours; they just have different priorities.
In the case of health care, our costs are so out of control - we spend nearly twice as much per person as other developed countries and still leave a sixth of our population uninsured - that reform will be increasingly difficult to avoid. But universal reforms that allow workers to share in the prosperity that their labor creates also have the advantage, like Social Security and Medicare, of a broad political appeal that makes them easier to win and preserve.
If we can make some progress in these areas by next year's Labor Day, then maybe American labor will have something to celebrate.
Mark Weisbrot is co-director of the Center for Economic and Policy Research, in Washington, D.C.