Sunday, March 25, 2007

Solution to Growing Wealth Gap: Stronger Workers’ Voices

by James Parks, Mar 21, 2007

Source: Economic Policy Institute

Workers in the United States are the most productive workers in the world and they work longer hours than workers in any other developed country. Yet, even though our economy generates more than $13 trillion in income, the economy is not delivering for workers.

Meanwhile, the gap between the richest in America and the rest of us has grown significantly over the past 25 years. Here are the facts:

  • The top 1 percent of the nation now takes in an astounding 16 percent of national income, up from 8 percent in 1980.
  • The average CEO of a large corporation makes more than $10 million a year, while the minimum wage for workers amounts to about $10,000 a year. Recently, the U.S. House and Senate each passed a minimum wage bill to increase the current $5.15 an hour rate to $7.25, the first increase in a decade, but the bill is being held captive to special interests seeking business tax breaks.
  • Average wages today are only 15 percent higher than in 1980, despite a 67 percent increase in productivity.
  • From 1990 to 2002, for every extra dollar earned by those in the bottom 90 percent, each taxpayer at the top brought in an extra $18,000.

Stagnant wages and family incomes, increasing income insecurity, eroding health care benefits and disappearing pensions have left working families struggling to make ends meet.

How did we get to this point? One of the major causes of this state of the U.S. economy is a massive shift in bargaining power away from workers toward employers that has occurred over the past 30 years, according to Ron Blackwell, AFL-CIO chief economist. Blackwell spoke today at the Washington, D.C., Chapter of the Labor and Employment Relations Association.

This increased employer power allows corporations to outsource work, deny wage increases and walk away from obligations to provide health care and retirement security to employees. Workers and families need a stronger voice to balance corporate power, Blackwell says.

The Employee Free Choice Act would be a big first step in restoring the balance between workers and management, says Blackwell. The legislation, which the House passed March 1, would level the playing field and allow workers to freely decide whether to join a union.

At the same time, the union movement is taking action to increase worker awareness of the underlying causes of this gap between productivity and wealth. The AFL-CIO Executive Council at its winter meeting approved a new economics education program that will:

  • Expose the corporate agenda that invokes privatization, deregulation, globalization, labor market flexibility, price stability and new technology as excuses and seeks to expand so-called free trade. Some 3.4 million manufacturing workers have lost their jobs since 1998 partially as a result of trade deficits that were run up in a rush by corporations to compete in a global economy by seeking the lowest wages.
  • Reinforce with workers the importance of a strong government and what we need from it (accountable elected representatives, Social Security, education, universal health care, fair trade and labor laws that work). At the same time, we must stop starving our public services, and we must remind our officials of what we don’t need (deregulation, corporate welfare, privatization and regressive taxes).
  • Heighten awareness among working families that our struggles are not the result of our individual failures to work hard, play by the rules or make good decisions. Our problems are not personal ones; they are part of a national pattern that can be addressed only through organizing and collective action.

The council’s statement spelled out what the economy should be, but isn’t today:

Our movement and the workers we represent believe the economy should work for the people in America—the people do not work for the economy. Our economy should be strong enough to provide the goods and services necessary for national security and to meet the needs of the people. Our economy should be democratically accountable to the people and not controlled by corporate and financial interests.

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