Devaluing Labor

By Harold Meyerson
Wednesday, August 30, 2006; A19

Labor Day is almost upon us, and like some of my fellow graybeards, I can, if I concentrate, actually remember what it was that this holiday once celebrated. Something about America being the land of broadly shared prosperity. Something about America being the first nation in human history that had a middle-class majority, where parents had every reason to think their children would fare even better than they had.

The young may be understandably incredulous, but the Great Compression, as economists call it, was the single most important social fact in our country in the decades after World War II. From 1947 through 1973, American productivity rose by a whopping 104 percent, and median family income rose by the very same 104 percent. More Americans bought homes and new cars and sent their kids to college than ever before. In ways more difficult to quantify, the mass prosperity fostered a generosity of spirit: The civil rights revolution and the Marshall Plan both emanated from an America in which most people were imbued with a sense of economic security.

That America is as dead as the dodo. Ours is the age of the Great Upward Redistribution. The median hourly wage for Americans has declined by 2 percent since 2003, though productivity has been rising handsomely. Last year, according to figures released just yesterday by the Census Bureau, wages for men declined by 1.8 percent and for women by 1.3 percent.

As a remarkable story by Steven Greenhouse and David Leonhardt in Monday's New York Times makes abundantly clear, wages and salaries now make up the lowest share of gross domestic product since 1947, when the government began measuring such things. Corporate profits, by contrast, have risen to their highest share of the GDP since the mid-'60s -- a gain that has come chiefly at the expense of American workers.

Don't take my word for it. According to a report by Goldman Sachs economists, the most important contributor to higher profit margins over the past five years has been a decline in labor's share of national income.

As the Times story notes, the share of GDP going to profits is also at near-record highs in Western Europe and Japan.

Clearly, globalization has weakened the power of workers and begun to erode the egalitarian policies of the New Deal and social democracy that characterized the advanced industrial world in the second half of the 20th century.

For those who profit from this redistribution, there's something comforting in being able to attribute this shift to the vast, impersonal forces of globalization. The stagnant incomes of most Americans can be depicted as the inevitable outcome of events over which we have no control, like the shifting of tectonic plates.

Problem is, the declining power of the American workforce antedates the integration of China and India into the global labor pool by several decades. Since 1973 productivity gains have outpaced median family income by 3 to 1. Clearly, the war of American employers on unions, which began around that time, is also substantially responsible for the decoupling of increased corporate revenue from employees' paychecks.

But finger a corporation for exploiting its workers and you're trafficking in class warfare. Of late a number of my fellow pundits have charged that Democratic politicians concerned about the further expansion of Wal-Mart are simply pandering to unions. Wal-Mart offers low prices and jobs to economically depressed communities, they argue. What's wrong with that?

Were that all that Wal-Mart did, of course, the answer would be nothing. But as business writer Barry Lynn demonstrated in a brilliant essay in the July issue of Harper's, Wal-Mart also exploits its position as the biggest retailer in human history -- 20 percent of all retail transactions in the United States take place at Wal-Marts, Lynn wrote -- to drive down wages and benefits all across the economy. The living standards of supermarket workers have been diminished in the process, but Wal-Mart's reach extends into manufacturing and shipping as well. Thousands of workers have been let go at Kraft, Lynn shows, due to the economies that Wal-Mart forced on the company. Of Wal-Mart's 10 top suppliers in 1994, four have filed bankruptcies.

For the bottom 90 percent of the American workforce, work just doesn't pay, or provide security, as it used to.

Devaluing labor is the very essence of our economy. I know that airlines are a particularly embattled industry, but my eye was recently caught by a story on Mesaba Airlines, an affiliate of Northwest, where the starting annual salary for pilots is $21,000 a year, and where the company is seeking a pay cut of 19 percent. Maybe Mesaba's plan is to have its pilots hit up passengers for tips.

Labor Day is almost upon us. What a joke.

meyersonh@washpost.com

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CHEAP TOMATOES?

This should make everyone think, be you Democrat, Republican or Independent

From a California school teacher - - -

"As you listen to the news about the student protests over illegal immigration, there are some things that you should be aware of:

I am in charge of the English-as-a-second-language department at a large southern California high school which is designated a Title 1 school, meaning that its students average lower socioeconomic and income levels.

Most of the schools you are hearing about, South Gate High, Bell Gardens , Huntington Park , etc., where these students are protesting, are also Title 1 schools.

Title 1 schools are on the free breakfast and free lunch program. When I say free breakfast, I'm not talking a glass of milk and roll -- but a full breakfast and cereal bar with fruits and juices that would make a Marriott proud. The waste of this food is monumental, with trays and trays of it being dumped in the trash uneaten. (OUR TAX DOLLARS AT WORK )

I estimate that well over 50% of these students are obese or at least moderately overweight. About 75% or more DO have cell phones. The school also provides day care centers for the unwed teenage pregnant girls (some as young as 13) so they can attend class without the inconvenience of having to arrange for babysitters or having family watch their kids. (OUR TAX DOLLARS AT WORK)

I was ordered to spend $700,000 on my department or risk losing funding for the upcoming year even though there was little need for anything; my budget was already substantial. I ended up buying new computers for the computer learning center, half of which, one month later, have been carved with graffiti by the appreciative students who obviously feel humbled and grateful to have a free education in America . (OUR TAX DOLLARS AT WORK)

I have had to intervene several times for young and substitute teachers whose classes consist of many illegal immigrant students here in the country less then 3 months who raised so much he*l with the female teachers, calling them "Putas" whores and throwing things that the teachers were in tears.

Free medical, free education, free food, day care etc., etc., etc. Is it any wonder they feel entitled to not only be in this country but to demand rights, privileges and entitlements ?

To those who want to point out how much these illegal immigrants contribute to our society because they LIKE their gardener and housekeeper and they like to pay less for tomatoes: spend some time in the real world of illegal immigration and see the TRUE costs.

Higher insurance, medical facilities closing, higher medical costs, more crime, lower standards of education in our schools, overcrowding, new diseases etc., etc, etc. For me, I'll pay more for tomatoes.

We need to wake up. The guest worker program will be a disaster because we won't have the guts to enforce it . Does anyone in their right mind really think they will voluntarily leave and return?

It does, however, have everything to do with culture: A third-world culture that does not value education, that accepts children getting pregnant and dropping out of school by 15 an d that refuses to assimilate , and an American culture that has become so weak and worried about " political Correctness " that we don't have the will to do anything about it.

If this makes your blood boil, as it did mine, forward this to everyone you know.

CHEAP LABOR? Isn't that what the whole immigration issue is about?

Business doesn't want to pay a decent wage.

Consumers don't want expensive produce.

Government will tell you Americans don't want the jobs.

But the bottom line is cheap labor. The phrase "cheap labor" is a myth , a farce, and a lie. There is no such thing as "cheap labor."

Take, for example, an illegal alien with a wife and five children. He takes a job for $5.00 or 6.00/hour. At that wage, with six dependents, he pays no income tax, yet at the end of the year, if he files an Income Tax Return, he gets an "earned income credit" of up to $3,200 free.

He qualifies for Section 8 housing and subsidized rent.

He qualifies for food stamps.

He qualifies for free (no deductible, no co-pay) health care.

His children get free breakfasts and lunches at school.

He requires bilingual teachers and books.

He qualifies for relief from high energy bills.

If they are, or become, aged, blind or disabled, they qualify for SSI. Once qualified for SSI they can qualify for Medicare . All of this is at (our) taxpayer's expense .

He doesn't worry about car insurance, life insurance, or homeowners insurance.

Taxpayers provide Spanish language signs, bulletins and printed material.

He and his family receive the equivalent of $20.00 to $30.00/hour in benefits.

Working Americans are lucky to have $5.00 or $6.00/hour left after paying their bills and his.

The American taxpayers also pay for increased crime, graffiti and trash clean-up.

Cheap labor? YEAH RIGHT! Wake up people!

THESE ARE THE QUESTIONS WE SHOULD BE ADDRESSING TO EITHER PARTY. 'AND WHEN THEY LIE TO US AND DON'T DO AS THEY SAY, WE SHOULD REPLACE THEM AT ONCE!'

THIS HAS GOT TO BE PASSED ALONG TO AS MANY AS POSSIBLE OR WE WILL ALL GO DOWN THE DRAIN BECAUSE A FEW DON'T CARE.