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On May 3, 2019 Alexia Fernandez Campbell writes on Vox:
Productivity is up and unemployment is low. So why aren’t workers benefiting yet?
Americans are working harder these days, but it’s not paying off like it used to.
In the first three months of 2019, employees got so much more work done that they smashed productivity forecasts.
Labor productivity in the non-farm business sector (the biggest part of the US economy) grew 2.4 percent compared to the same period last year, according to new estimates from the US Department of Labor.
That’s the highest jump in nearly a decade, and is slightly above the average quarterly growth rate for most of the post-World War II period. Under a different measure, which compares annual growth to the previous quarter, productivity grew 3.6 percent, the highest in at least four years.
Business investment in technology is certainly making workers more efficient, but that doesn’t explain such a jump in productivity at a time when capital spending growth is falling.
What these numbers do tell us: Engineers, bartenders, supermarket cashiers, and other private sector employees are working harder than they have in the past few years. While productivity fluctuates each quarter, no matter how you measure it, it has been steadily rising overall since 2016.
That’s great for businesses (they earn more money), and for the economy (GDP grows faster). The problem is that companies aren’t rewarding their employees for the extra hard work.
Just look at the table below. Business employees and factory workers were more productive, worked longer hours, and produced more goods and services than they did last year. But their real hourly wages, which are adjusted for inflation, barely inched up. And real hourly pay for factory workers actually fell during that time.
Senator Bernie Sanders Comments:
For three decades after World War II, productivity and wages grew together. Today, productivity is still soaring but workers’ wages are stagnant as corporate executives keep the profits for themselves. This is why we have got to make it easier for workers to join unions, rebuild the trade union movement in America and ensure workers receive the wages they deserve.
Gary Reber Comments:
The labor union movement should transform to a producers’ ownership union movement and embrace and fight for this new democratic capitalism. They should play the part that they have always aspired to — that is, a better and easier life through participation in the nation’s economic growth and progress. As a result, labor unions will be able to broaden their functions, revitalize their constituency, and reverse their decline.
Unfortunately, at the present time the movement is built on one-factor economics — the labor worker. The insufficiency of labor worker earnings to purchase increasingly capital-produced products and services gave rise to labor laws and labor unions designed to coerce higher and higher prices for the same or reduced labor input. With government assistance, unions have gradually converted productive enterprises in the private and public sectors into welfare institutions. Kelso stated: “The myth of the ‘rising productivity’ of labor is used to conceal the increasing productiveness of capital and the decreasing productiveness of labor, and to disguise income redistribution by making it seem morally acceptable.”
Historically and in its present form, the labor movement is destructive in that it agrees with the idea that propertyless people should exist to serve those who own property. The labor movement doesn’t seek to end wage slavery; it merely seeks to improve the condition of the wage slave. If it actually cared about human rights and freedom, it wouldn’t call itself the “labor movement.”
Binary economist Louis O. Kelso argued that unions “must adopt a sound strategy that conforms to the economic facts of life. If under free-market conditions, 90 percent of the goods and services are produced by capital input, then 90 percent of the earnings of working people must flow to them as wages of their capital and the remainder as wages of their labor work… If there are in reality two ways for people to participate in production and earn income, then tomorrow’s producers’ union must take cognizance of both… The question is only whether the labor union will help lead this movement or, refusing to learn, to change, and to innovate, become irrelevant.”
Unions are the only group of people in the whole world who can demand a real, justice managed Kelso-designed ESOP, who can demand the right to participate in the expansion of their employer by asserting their constitutional preferential rights to become capital owners, be productive, and succeed. The ESOP can give employees access to capital credit so that they can purchase the employer’s stock, pay for it in pre-tax dollars out of the earnings generated by the new assets that underlie that stock, and after the stock is paid for earn and collect the capital earnings income from it, and accumulate it in a tax haven until they retire, whereby they continue to be productive capital earners receiving income from their capital asset ownership stakes. This is a viable route to individual self-sufficiency needing significantly less or no government redistributive assistance.
The unions should reassess their role of bargaining for more and more income for the same work or less and less work, and embrace a cooperative approach to survival, whereby they redefine “more” income for their workers in terms of the combined wages of labor and capital on the part of the workforce. They should continue to represent the workers as labor workers in all the aspects that are represented today — wages, hours, and working conditions — and, in addition, represent workers as full voting stockowners as capital ownership is built into the workforce. What is needed is leadership to define “more” as two ways to earn income.
If we continue with the past’s unworkable trickle-down economic policies, governments will have to continue to use the coercive power of taxation to redistribute income that is made by people who earn it and give it to those who need it. This results in ever deepening massive debt on local, state, and national government levels, which leads to the citizenry becoming parasites instead of enabling people to become productive in the way that goods, products, and services are actually produced.
When labor unions transform to producers’ ownership unions, opportunity will be created for the unions to reach out to all shareholders (stock owners) who are not adequately represented on corporate boards, and eventually all labor workers will want to join an ownership union in order to be effectively represented as an aspiring capital owner. The overall strategy should assure that the labor compensation of the union’s members does not exceed the labor costs of the employer’s competitors, and that capital earnings of its members are built up to a level that optimizes their combined labor-capital worker earnings. A producers’ ownership union would work collaboratively with management to secure financing of advanced technologies and other new capital investments and broaden ownership. This will enable American companies to become more cost-competitive in global markets and to reduce the outsourcing of jobs to workers willing or forced to take lower wages.
Kelso stated, “Working conditions for the labor force have, of course, improved over the years. But the economic quality of life for the majority of Americans has trailed far behind the technical capabilities of the economy to produce creature comforts, and even further behind the desires of consumers to live economically better lives. The missing link is that most of those un-produced goods and services can be produced only through capital, and the people who need them have no opportunity to earn income from capital ownership.”
