Really, everything else about Labor in America is just commentary on this graph:
You have exactly the rights you are willing to fight for.
Hard not to decide that Reagan broke the unions, isn’t it? The number of strikes crashed off a cliff even faster than did membership.
And, in case you didn’t realize, the Employee Free Choice Act (EFCA) is already dead on arrival. Something may pass with that name, but it will not allow workers to create a union just by putting a check mark on a card, and it will not have quick mandatory arbitration of first employment contracts so that employers don’t just refuse, for years, to give unionized workers a first contract, effectively voiding the unionization.
tjfxh
The graphs reveal the GOP agenda of reducing and then destroying the bargaining power of labor, which they have effectively accomplished, first, through undermining the labor movement and unions, and secondly through global labor arbitrage aka offshoring. Illegal immigration is also a wink-wink GOP policy that serves agriculture and many industries that depend on low cost labor (migrant workers by day and illegal immigrants by night).
This has been a key objective for the GOP elite, since inflation in the US is defined in terms of wage inflation. That is to say, if wages aren’t increasing, then inflation is considered to be controlled and interest rates can be held low. . This also leads to asset inflation, and it was a major cause of the bubbles and subsequent crisis.
This allowed business to keep an inordinate share of increasing productivity without sharing it over the past three decades. Economist Henry C. K. Liu’s analysis of the exploitive nature of the US economy shows this political suppression of the bargaining power of labor led to debt capitalism, which became unsustainable when debt exceeded the ability of stagnating wages to service. No recovery is possible without wage increases that keep pace with increasing productivity. And so far that is not on the table. Look at the opposition to EFCA.
This is already creating a backlash and as economic conditions deteriorate, there will be rising populist sentiment against globalization, for example, leading to calls for protectionism.
tjfxh
Here’s a comment I put up on John Quiggin’s blog recently that is relevant here:
Individual risk assumption is magnified enormously in societies in which urbanites and suburbanites dominate, i.e., all developed countries. When agriculture was the predominant livelihood, the majority of households were relatively self-sufficient and few were dependent on income from firms. The industrial revolution reversed that balance, creating new risks for individuals and families, as Charles Dickens so graphically described in his novels. Now the developing world is going through a similar transition.
However, economic philosophy — much of economics is still based on ideology rather than science — has not kept pace sufficiently with shifts in household risk assumption. Income from employment is necessary for survival, not only progress. Therefore, if a government is to avoid becoming a failed state employment must be the highest economic priority, not growth. The way to balance the desire for growth with the need for employment is through social insurance that reduces household risk owing to business and financial cycles.
To call social insurance “welfare,” implying gratuitous handouts that are unfairly redistributive, is to prejudice the case. For example, a principle problem facing the US politically and economically lies in providing social insurance in the face of libertarian opposition to unfair redistribution, charactering such transfers as handouts for the votes of the indigent. Of course, in addition to philosophical disagreements a lot racism is involved in this opposition. Since racism is not a rational matter, it is difficult to overcome. Failure to recognize such practical considerations in political economy disjoins theory from reality.
On the other hand, a good theory provides the framework for political debate and activism. It is important to show that libertarian economics was perhaps suitable in rural, agricultural and pre-industrial societies where individual responsibility and incentive were paramount values and where it was impractical for the state to deal with societal risk through social insurance. But, “You’re on your own,” is insufficient for dealing with risk in contemporary society, where the principle should be, “We’re all in this together,” in order to properly address social risk. Altruism is not only a moral imperative and ethical consideration, it makes good sense economically in the type of society in which we live. The neoliberal idea that market fundamentalism, being most efficient economically, should dictate policy to society, rather than social needs dictating economic policy, is an ideological presumption, and not a scientific law, as it is often represented to be.
Ian Welsh
Inflation is wage inflation plus consumer goods, for the purposes of what the Fed targets (oh, there’s some other stuff in it, but it’s trivial.)
tjfxh
https://www.ianwelsh.net/your-labor-day-graphs/
Yes, and, in general, consumer prices don’t rise without wage pressure driving demand unless, e.g., commodities rise through excess liquidity flowing into “speculation,” especially oil, which drives up prices that are energy dependent. Energy is the wildcard, since labor is now controlled.
tjfxh
Oops. Cancel the link. I should have written, “Inflation is wage inflation plus consumer goods.”
Ian Welsh
Labor is controlled, and offshoring/labor arbitrage is the engine of deflation in consumer goods as well.
tjfxh
Right. And debts remain constant, so debt service becomes an ever increasing problem as wages and prices fall. Debt service encroaches more and more in income. As Michael Hudson has been pointing out, increasing debt/income leads to disaster.
Cujo359
I can’t recall a strike that didn’t involve government workers that’s happened in the last year or so. Shows how rare they are these days.
Calvin Jones and the 13th Apostle
Cujo359:
I can’t recall a strike that didn’t involve teachers. And most of those only last for a week or two(because laws forbid it lasting any longer in most states).
Mandos
The grocery store was jam-packed today, Labo*u*r Day. Yes, I insist on keeping the “u” even in Merka, even though it does not make sense.
S Brennan
Strikes are NOT some form of protest…that’s something from the 60’s. Strikes are an economic weapon meant to force concessions by making capitol investment stand idle while interest payments continue. If the plant is paid for [no modernization], or the company can continue collecting on invoices, or capitol payments are made unnecessary due outside forces, or some combination…a strike will fail.
Go read Taft–Hartley Act
The act, still effective, was sponsored by Senator Robert Taft and Representative Fred A. Hartley, Jr. and legislated by overriding U.S. President Harry S. Truman’s veto on June 23, 1947; labor leaders called it the “slave-labor bill” while President Truman vetoed the bill, though he was overuled by Congress, and argued it would “conflict with important principles of our democratic society…Taft-Hartley Act amended the National Labor Relations Act (NLRA; informally the Wagner Act), which Congress passed in 1935.
http://en.wikipedia.org/wiki/Taft%E2%80%93Hartley_Act
Sir Charles
Ian,
My very first blog post was lamenting the absence of strikes in the U.S.
http://www.cogitamusblog.com/2007/12/strikes-my-fanc.html
Alas, in this economy and this legal system it is not going to change any time soon.
tc
Wow, it’s like the graph almost spells “resistance is futile.”
someofparts
A few years back I was in a local bookstore and commented that I was a newfangled kind of sharecropper. The gal standing next to me looked puzzled and asked, “So, you’re a farmer?”, to which the clerk responded, “No. She just means she’s a debt slave.”
I plan to start thinking of this country as North Mexico. Like regular Mexicans, we have the misfortune to be utterly under the boot of an oligarchy notable for its flamboyant ignorance and venality. They will force the rest of the country to sink to their level.