Tuesday, September 4, 2007

American Labor Faces Some Serious Challenges

According to Jared Bernstein, a senior economist at the Economic Policy Institute, "The average middle-income family, combining hours across all workers, spent about 3,100 hours at work last year.

"There's good news and bad news about all that work. Which do you want first? Okay, the good news first. After all, it's a holiday.

"Since the mid-1990s, the American work force has given birth to a surge in what economists call labor productivity, or output per hour worked. That means our manufacturers are more efficiently crafting inputs into the stuff we need and want, while those in our service sector are accomplishing more in an hour than they used to.

"Faster productivity growth provides the potential for higher living standards. So reach around and pat yourself on the back, American worker, because, as we economists like to put it, you are a "highly productive labor input..."

“...We've been working harder and smarter, but too many of us don't have enough to show for it. A report released today by the Economic Policy Institute shows that as of the middle of this year, the hourly wage for the guy right in the middle of the wage scale is up a mere 1%, after inflation, since 2000. Midwage women have done better - up 5% - in part because there's been a lot more demand for industries where they're more likely to work, like health care and education. Still, their pay has gone nowhere since 2003.

"How is it that the bakers are baking a bigger, better pie but ending up with smaller slices? The answer is inequality. All that faster productivity growth only creates the potential for better living standards. If the gains elude most workers, the potential won't be realized.

"And just this week, we learned that - congratulations! - the New York City area is the poster child for the inequality phenomenon. Income disparities here are the most extreme in the nation, as incomes for the richest fifth of households are 20 times those for the poorest fifth.

"Here's a rule of thumb. If you can easily explain what you do to a 7-year-old ("I'm a cop," "I'm a teacher," "I make cars," "I build houses"), you're probably not getting your legit share of the productivity pie. If, on the other hand, the kid is lost as you explain how you package loans of dubious quality into financial derivatives, you may have been making a killing...” "

Without question, labor has gotten the short end of the stick over recent decades, but where does the solution lie?

In MORE government and higher tax rates?

How so?

Government programs don’t assist working people and higher tax rates keep working people from keeping more of their hard earned monies, hardly a way to address the fact that Americans are not sharing in the prosperity that their productivity has produced.

No, more government is certainly NOT the answer to this problem.

How about a resurgence of Unionism and Union protections for workers?

OK, but consider that the National Institute for Labor Relations Research found that between 1982 and 2004, manufacturing establishments expanded 4.5 percent in Right to Work (RTW) states. While they shrank 5.3 percent nationwide, they shriveled in forced-unionism states: down 9.3 percent.

And that from 1995 to 2005, private, non-farm employment advanced 20.2 percent in RTW states, ahead of the 14.5 percent national average and 11.3 percent hike in forced-unionism states.

Moreover, RTW states saw $50,571 average, real household income in metropolitan areas in 2002. That year, the $48,310 U.S. figure trumped its $46,431 counterpart in Big Labor states.

In 2004, 71 percent of households in RTW states owned their homes, versus 69 percent across the USA, and 68 percent in mandatory-unionism states.

And finally, RTW residents more broadly enjoy medical coverage. Between 1995 and 2005, the Census Bureau reports, the number of individuals carrying private health insurance climbed 11.9 percent in those states. The 7 percent national average once again outstripped the 4.4 percent increase in compulsory-unionism states. Meanwhile, the number of children with private insurance rose 9.3 percent in RTW states and 2.9 percent, on average, across America. But in forced-union states, the number of boys and girls with private coverage actually slipped 0.5 percent.

But is that due solely to Right-to-Work laws?

Well, according to Mark Mix, President of the National Right-to-Work Committee (nrtw.org), “States with Right to Work laws tend strongly to have other pro-growth policies, but Right to Work laws themselves play a very important role in fostering a good climate, both for enacting other pro-growth policies in the first place and for maintaining them in the face of strong opposition from Big Labor.”

In truth there IS a role in this for government and Labor, but sadly neither wants to play that role, as there’s little in it for them, in seeking productivity gains be shared among more workers, WITHOUT the specter of either raising Union dues or tax rates.

You may well ask, “Why don’t Corporations just do the right thing?”

And that’s a fair question, as is, “Why doesn’t government and the American Labor Movement do the right thing WITHOUT always first and foremost concerning themselves with what’s in it for themselves?”

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