On August 29, 2012, Lawrence Mishel, a researcher at the Economic Policy Institute, reports key findings on jobs wages and living standards.
Between 1973 and 2011, the median worker’s real hourly compensation (which includes wages and benefits) rose just 10.7 percent. Most of this growth occurred in the late 1990s wage boom, and once the boom subsided by 2002 and 2003, real wages and compensation stagnated for most workers—college graduates and high school graduates alike. This has made the last decade a “lost decade” for wage growth. The last decade has also been characterized by increased wage inequality between workers at the top and those at the middle, and by the continued divergence between overall productivity and the wages or compensation of the typical worker.
A major factor driving these trends has been the ongoing erosion of unionization and the declining bargaining power of unions, along with the weakened ability of unions to set norms or labor standards that raise the wages of comparable nonunion workers. This preview of the forthcomingThe State of Working America, 12th Edition presents a detailed analysis of the impact of unionization on wages and benefits and on wage inequality.
America is blinded by limiting policies to CREATE JOBS rather than the inclusive policy objective of OWNERSHIP CREATION, which will result in real job growth. We need to focus on OWNERSHIP CREATION paid for out of the earnings of productive capital investment, the primary source of income for the wealthy
Instead we continue to focus on JOB CREATION, which is the opposite objective of technological innovation and invention as tectonic shifts in the technologies of production destroy jobs and degrade jobs. Thus, the earnings necessary to become self-sufficient and pay for one’s advanced education and to support a family in relative affluence are just not there for the American majority. Those seeking higher education and to purchase higher ticket consumer items within that majority have had to pursue such with borrowed moneys. And the reality is that with the human-intelligent “machine age” exponentially destroying good jobs, even for those with engineering and science degrees, the pay back will be decades if at all, and we will simply end up with a society of millions of educated unemployed if not bankrupted, dependent on government welfare, open and concealed. The solution is to consciously and purposely broaden private, individual ownership in future income-producing productive capital assets simultaneously with the growth of the economy.
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. This is their ONLY salvation.
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 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 unproduced goods and services can be produced only through capital, and the people who need them have no opportunity to earn income from capital ownership.”
Walter Reuther, President of the United Auto Workers, expressed his open-mindedness to the goal of democratic worker ownership in his 1967 testimony to the Joint Economic Committee of Congress as a strategy for saving manufacturing jobs in America from being outcompeted by Japan and eventual outsourcing to other Asian countries with far lower wage costs: “Profit sharing in the form of stock distributions to workers would help to democratize the ownership of America’s vast corporate wealth, which is today appallingly undemocratic and unhealthy.
“If workers had definite assurance of equitable shares in the profits of the corporations that employ them, they would see less need to seek an equitable balance between their gains and soaring profits through augmented increases in basic wage rates. This would be a desirable result from the standpoint of stabilization policy because profit sharing does not increase costs. Since profits are a residual, after all costs have been met, and since their size is not determinable until after customers have paid the prices charged for the firm’s products, profit sharing [through wider share ownership] cannot be said to have any inflationary impact on costs and prices.”
Unfortunately for democratic unionism, the United Auto Workers, American manufacturing workers, and American citizens generally, Reuther was killed in an airplane crash in 1970 before his idea was implemented. Leonard Woodcock, his successor, never followed through.
http://www.epi.org/publication/ib342-unions-inequality-faltering-middle-class/#.UEF2xLmTcII.facebook
