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“End Of The Middle Class?”: What Happens If America Loses Its Unions

Are American unions history?

In the wake of labor’s defeated effort to recall Wisconsin Gov. Scott Walker (R) last week, both pro– and anti-union pundits have opined that unions are in an all-but-irreversible decline. Privately, a number of my friends and acquaintances in the labor movement have voiced similar sentiments. Most don’t think that decline is irreversible but few have any idea how labor would come back.

What would America look like without a union movement? That’s not a hard question to answer, because we’re almost at that point. The rate of private-sector unionization has fallen below 7 percent, from a post-World War II high of roughly 40 percent. Already, the economic effects of a union-free America are glaringly apparent: an economically stagnant or downwardly mobile middle class, a steady clawing-back of job-related health and retirement benefits and ever-rising economic inequality.

In the three decades after World War II the United States dominated the global economy, but that’s only one of the two reasons our country became the first to have a middle-class majority. The other is that this was the only time in our history when we had a high degree of unionization. From 1947 through 1972 — the peak years of unionization — productivity increased by 102 percent, and median household income also increased by 102 percent. Thereafter, as the rate of unionization relentlessly fell, a gap opened between the economic benefits flowing from a more productive economy and the incomes of ordinary Americans, so much so that in recent decades, all the gains in productivity — as economists Ian Dew-Becker and Robert Gordon have shown — have gone to the wealthiest 10 percent of Americans. When labor was at its numerical apogee in 1955, the wealthiest 10 percent claimed just 33 percent of the nation’s income. By 2007, with the labor movement greatly diminished, the wealthiest 10 percent claimed 50 percent of the nation’s income.

Today, wages account for the lowest share of both gross domestic product and corporate revenue since World War II ended — and that share continues to shrink. An International Monetary Fund study released in April shows that the portion of GDP going to wages and benefits has declined from 64 percent in 2001 to 58 percent this year. The survey compared the United States with Europe, where the only other nations in which labor’s share declined were Greece, Spain and Ireland — countries whose economies are at death’s door. Our economy is nowhere near so weak, but as Americans’ ability to collectively bargain has waned, so has their power to keep all corporate revenue from going to top executives and shareholders.

When unions are powerful, they boost the incomes of not only their members but also of nonunion workers in their sector or region. Princeton economist Henry Farber has shown that the wages of a nonunion worker in an industry that is 25 percent unionized are 7.5 percent higher because of that unionization. Today, however, few industries have so high a rate of unionization, and a consequence is that unions can no longer win the kinds of wages and benefits they used to.

Deunionization is just one reason Americans’ incomes have declined, of course; globalization has taken its toll as well. But the declining share of pretax income going to wages is chiefly the result of the weakening of unions, which is the main reason American managers now routinely seek to thwart their workers’ attempts to unionize through legally questionable but economically rewarding tactics (rewarding, that is, for the managers).

The weakening of unions has had a huge political effect as well: the realignment of the white working class. Since the ’60s, exit polls have shown that unionized blue-collar whites vote Democratic at a rate 20 to 30 percent higher than their nonunion counterparts. The decline in union membership has weakened Democrats in such heavily white, increasingly deunionized states as West Virginia and Wisconsin — the main reason Republicans such as Walker have sought to reduce labor’s numbers. Liberals who have been indifferent to unions’ decline will find it difficult to enact progressive legislation in their absence.

Understandably, some liberals are searching for ways to arrest the economic decline of the majority of their fellow Americans in a post-union environment. I fear they’re bound to be frustrated. If workers can’t bargain with their employers, it can’t be done. If and when Big Labor dies — it’s on life support now — America’s big middle class dies with it.

By: Harold Meyerson, Opinion Writer, The Washington Post, June 12, 2012

June 15, 2012 Posted by | Unions | , , , , , , , | Leave a comment

“Billionaire Nullification”: With No Guardrails, Secret Money Fuels The 2012 Elections

For those who believe money already has too much power in U.S. politics, 2012 will be a miserable year. The Supreme Court’s Citizens United decision, lassitude at the Federal Election Commission and the growing audacity of very rich conservatives have created a new political system that will make the politics of the Gilded Age look like a clean government paradise.

Americans won’t even fully know what’s happening to them because so much can be donated in secrecy to opaque organizations. It’s always helpful for voters to know who is trying to buy an election, and for whom. This time, much of the auction will be held in private. You can be sure that the candidates will find out who helped elect them, but the voters will remain in the dark.

We do know that the playing field this year is tilted sharply to the right. Journalists often focus on the world of rich liberals in places such as Hollywood and Silicon Valley. But there are even more conservative millionaire and billionaire donors who hail from less mediagenic places. There is, for example, a lot of oil money in Texas. Then there’s Wall Street. Once a bountiful source of Democratic as well as Republican cash, it has shifted toward the party of Mitt Romney, John Boehner and Mitch McConnell. And then there’s Las Vegas casino mogul Sheldon Adelson, whose $10 million donation to the super PAC supporting Romney was reported Wednesday.

Republicans argue that turnabout is fair play. Barack Obama shunned the public financing system in 2008 and vastly outspent John McCain. Democrats, they say, are complaining now because they are at a disadvantage.

That’s at best half right. It’s true that Obama struck a blow against public financing, though the system was insufficiently financed and would eventually have collapsed under its own weight. And four years ago, Obama filled his coffers through the regulated system that limited the size of contributions and that required disclosure. This year, there are no guardrails, no limits on what can be raised and spent. A remarkably small number of very wealthy people will be able to do what hasn’t been done for generations.

And their influence will be especially large in congressional races where the outside groups can swamp what the candidates themselves spend. Those who claim that this is all about free speech need to explain how speech is free when one side can buy the microphone and can set the terms of debate, especially in contests below the presidential level.

What is to be done? The IRS could and should crack down on political committees legally disguised as “charities.” The Federal Election Commission and Congress could promote disclosure. The Supreme Court could undo its error, or we could do it by embarking on the cumbersome process of amending the Constitution. Ultimately, we need to democratize the money chase by providing, say, 5-to-1 public matches for small donations.

But it’s highly unlikely that any of this will happen before November, so here is a modest proposal: A small group of billionaires, aided perhaps by a few super-millionaires, should form an alliance to offset the spending of the other billionaires and super-millionaires. They might call themselves Billionaires Against Billionaire Politics. These public-spirited citizens would announce that they will match every penny raised by the various super PACs on the other side.

In principle, they could commit themselves to balancing off whichever side — conservative or liberal, Republican or Democrat — is dominating the airwaves and the fundraising. The idea would be to destroy the incentives for the very rich to buy the election. If shrewd wealthy people realized that every $10 million they put up would be met immediately by $10 million from the other side, they might lose interest in the exercise.

As a practical matter, it’s conservative dollars that need to be offset, so this balancing act would likely be financed by non-conservatives. George Soros, Warren Buffett and New York Mayor Mike Bloomberg come to mind. But there may be other, less high-profile wealthy folks who want to do their patriotic bit. The hope is that this would be a one-shot deal. After one nuclear winter of an election, rich partisans could agree to mutual disarmament.

It’s preposterous that our system has handed over so much power to those with large fortunes that the only way to get matters under control is to have one group of rich people check the power of another group of rich people. Maybe the absurdity of it all will finally force the Supreme Court and Congress to bring us back to something more reasonable. It’s called democracy.

 

By: E. J. Dionne, Opinion Writer, The Washington Post, June 13, 2012

June 15, 2012 Posted by | Democracy, Election 2012 | , , , , , , , | Leave a comment

   

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