On June 6, 2012, Ross Eisenbrey and Colin Gordon wrote about inequality on the Economic Policy Institute Web site. The authors’ premise is that to a remarkable extent, inequality, which fell during the New Deal but has risen dramatically since the late 1970s, corresponds to the rise and fall of unionization in the United States.
See Golin Gordon’s blog: Union decline and rising inequality in two charts
“The passage in 1935 of the National Labor Relations Act, which protected and encouraged unions, sparked a wave of unionization that led to three decades of shared prosperity and what some call the Great Compression: when the share of national income taken by the very rich was cut by one-third. The “countervailing power” of labor unions (not just at the bargaining table but in local, state, and national politics) gave them the ability to raise wages and working standards for members and non-members alike. Both median compensation and labor productivity roughly doubled into the early 1970s. Labor unions both sustained prosperity, and ensured that it was shared; union bargaining power has been shown to moderate the compensation of executives at unionized firms.”
The union movement is failing labor workers because it is stuck in one-factor thinking and negotiations. Unions need to embrace negotiating with existing business owners to participate in private, individual employee ownership of their companies as their companies expand and grow, investing in future non-human productive capital assets. 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, reverse their decline, and play a significant role in addressing and reversing rising inequality.
http://www.epi.org/publication/unions-decline-inequality-rises/
