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Welcome to Income Inequality Kos.

Join us Thursdays, at 9:00 p.m. Eastern. We discuss income inequality, concentration of wealth, and related issues.

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Community Statement

The shared community value is a belief that income inequality is a political issue of high importance. Otherwise, all takes on the issue, from within the general Daily Kos community, are welcome.

Tonight, we'll be focusing on the question: What happened to productivity gains over the last 30 years? We'll leave solutions to a later diary, but many steps seem obvious once we examine causation.

Back in September 2007, CBS proudly proclaimed U.S. Workers World's Most Productive. A UN report noted:

Each U.S. worker produces $63,885 of wealth per year, more than their counterparts in all other countries, the International Labor Organization said in its report. Ireland comes in second at $55,986, ahead of Luxembourg, $55,641; Belgium, $55,235; and France, $54,609.

(emphasis added)

Not only was the US worker the most productive in the world, but US worker productivity continued to grow rapidly. Productivity growth should be good news, not only for John McCain, but for American workers as well. As Paul Krugman wrote back in 1990,

Productivity isn’t everything, but in the long run it is almost everything. A country’s ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker . . . the essential arithmetic says that long-term growth in living standards . . . depends almost entirely on productivity growth.

Quoted in Where Did the Productivity Growth Go? (PDF) by Ian Dew-Becker and Robert J. Gordon

(emphasis added)

In theory, Krugman is right. Higher productivity should result in a higher standard of living. But the catch was that, even back in 1990, that higher standard of living was experienced only by the fortunate few. The average worker was seeing none of the fruits of his increased productivity. Look at the following graph of hourly and non-supervisory wage earner income growth compared to productivity:


Source

Clearly, hourly workers began losing significant ground on the productivity/wage ratio chart around 1980 and, despite ever-increasing productivity growth, have continued to see their wages flatline.

So where did the money from all that productivity growth go? That's easy to see on this graph:


Source

Obviously, almost all income growth and standard of living improvements in the last 30 years went to the Top 1%. Some may argue that much of the growth among the economic elite came through investment gains and the tax advantages afforded to capital gains. Surprisingly, while the investment income gap also widened, this graph, which tracks income growth among the top 10% both with and without capital gains, shows that non-investment income grew at an exponential rate for the privileged few as well:


Source

So the question is: What Happened in 1980?

One good place to start to answer that question is with the UC Berkeley David E. Feller Memorial Labor Law Lecture given by Damon Silvers, Associate General Counsel for the AFL-CIO, back in April 2008. Silvers offers this summation:

For thirty years, America’s economic elites and their political allies have pursued a combination of economic and social policies designed to produce a low wage economy. These policies—our labor laws and our broader system of labor market regulation, our tax policies and our approach to globalization, have yielded decades of stagnant wages and rising economic inequality.

(emphasis added)

LABOR LAWS AND LABOR MARKET REGULATION

Silvers first gives a little history lesson. He explains that between 1933 and 1948 "it was pretty clearly the policy of the United States government to foster unionization in the private sector." Beginning with the Taft-Hartley Act of 1948, that policy began to shift to preserving the status quo. But at the time, the Overton Window as firmly established on the side of labor. As Silvers says, "[I]t was a status quo that centered on collective bargaining." The result was that labor captured most of the productivity gains and the middle class grew and the standard of living improved. But there was a sudden shift in 1980. When Ronald Reagan was elected, productivity gains and wage gains "were uncoupled."

The first and biggest anti-labor step that Reagan took was an executive order to fire striking PATCO members (air traffic controllers) and to use permanent replacement workers to take their jobs. As Silvers points out, the message to private industry was loud and clear:

[T]he federal government fires strikers and hires replacement workers; you can too. By doing so, the right of employers to hire permanent replacement workers, a right that had been recognized in theory by the NLRB in the 1950’s, but never acted on, became a living part of American labor law.

(emphasis added)

In addition to opening that Pandora's Box, the Reagan Labor Department and National Labor Relations Board (NLRB) effectively ceased enforcing labor law. While that abated during the Clinton years, it was reinstated with a vengeance under George W. Bush. The result has been not only fewer union members but a weakening of collective bargaining power, which has hurt non-union workers as much as or more than organized workers.

Here's the statistical proof of the effects of policy on union membership. The peak was reached just prior to the enactment of Taft-Harley, but notice the accelerated decline after 1980:


Source

As a result of policy shifts, union membership has fallen to Depression-era levels. Coincidence? I think not.

TAX POLICIES

Another contributing factor in the divorce between productivity gains and wage gains comes from our tax structure. As with labor laws, the New Deal ushered in an unprecedented shift to a radically more progressive taxation agenda. From the 1940s until the JFK administration, top marginal rates hovered at around 90%. Kennedy lowered the top rate to 70%, but the real damage belongs to the Reagan tax cuts enacted in the early 80s and the Bush tax cuts of the 00s.

A quick look at this graph shows the shift:


Source

Of course, the basis for this shift was "Trickle-Down Economic Theory", accurately characterized by George H. W. Bush in his 1980 primary campaign against Reagan as "Voodoo Economics." Naturally, Papa Bush, lacking all principle and with his finger in the political winds, adopted Reagan's view during his own presidency. The theory said, supposedly, that if we give huge tax breaks to the rich, they will invest in new industries, providing jobs and standard of living improvements for all. We all know how that worked out; the rich kept their gains and later decided to speculate wildly in untested and unregulated mortgage-backed "securities."

With no tax penalty on outrageously high incomes, an incestuous relationship developed among the Boards of Directors of many companies. CEOs all sat on each other's boards and gave themselves huge compensation packages and golden parachutes. The neofeudal lords took care of their own. And CEO pay soared:


Source

As you can easily see, in 1965, CEOs made 24 times what the average worker made. By 2000, CEO's made 310 times as much. Let's assume an inflation-adjusted income for average workers is $30,000. In 1965, the boss would have made $720,000, not a bad income. In 2000, that CEO made $9,300,000, or almost as much in one day as a worker made in one year. Why? Well, in 1965, anything your boss paid himself over that $720,000 would have been taxed at a 70% clip. Reagan lowered it to 28% at one point (the same as middle class workers), and today the rate stands at 35%, half what it was in JFK's time and only a few points higher than the middle class top margin.

GLOBALIZATION

Silvers notes that

The third legal source of our national low wage strategy is our approach to globalization. In the 1990’s, the United States entered into a series of trade agreements that, combined with technological developments, fully expose the U.S. economy to goods and services produced by low wage labor around the world. Prior to 1989, . . . American business historically had been supportive of high trade barriers, fearing competition from foreign manufacturers.

Of course, all that changed in the 1990s with the enactment of NAFTA (North American Free Trade Agreement), the WTO (World Trade Organization), and most-favored nation status for China. All of these, unfortunately, came about under a Democratic president, Bill Clinton, who eagerly embraced this new economic world order.

This agenda produced staggering negative effects on the US economy and on workers' wages in particular. As Silvers points out, these efforts toward globalization were enacted and pursued with little or no consideration given to labor or environmental standards. The results have been disastrous for the American worker because of "the absence of a meaningful national strategy for preserving and increasing incomes in a globalized economy."

What resulted in the US was a race to the bottom in worker compensation, the loss of millions of good-paying manufacturing jobs, and a massive trade imbalance. We have already seen that workers' wages stagnated. Take a look at what happened to manufacturing jobs:


Source

As you can see, nearly 8 million US manufacturing jobs have disappeared since the 1980 peak. Since manufacturing jobs generally pay better wages and provide better benefits than service sector jobs, the result has been a net loss for American workers.

Where did those manufacturing jobs go? Just look at our trade deficit:


Source

A vicious cycle has taken hold in the US. Downward pressure on wages forces US consumers buy more and more cheaply-made foreign goods in order to maintain their standard of living. But buying cheaper foreign goods and services leads to fewer US jobs and more downward wage pressure in the US, causing wages to slip further, leaving many US consumers with little choice but to buy cheap foreign goods and services, which leads to even fewer jobs and more downward pressure on wages--ad infinitum.

So there you have it: Destruction of labor unions and lax labor regulation, regressive tax policies, and unregulated globalization have created a disconnect between productivity and wages. Had wages risen with productivity, perhaps all Americans could have experienced a higher standard of living instead of just the fortunate few.

Originally posted to Dragonation™ on Thu Jul 29, 2010 at 06:06 PM PDT.

Also republished by Income Inequality Kos.

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Comment Preferences

  •  An excellent post (13+ / 0-)

    Thank you. I'd volunteer but I probably couldn't get up to this level of excellence.

    "If I pay a man enough money to buy my car, he'll buy my car." Henry Ford

    by johnmorris on Thu Jul 29, 2010 at 06:18:48 PM PDT

  •  At what point do open markets (10+ / 0-)

    globalization, and free trade zones get declared failures? Protectionism has a bad rap, but we could use a bit of it right now.

  •  Along with busting the unions (15+ / 0-)

    has come demonizing unions and the benefits unionized workers have, as if those benefits come at the expense of everyone else, or are somehow unfair to non-unionized workers.

    •  Yes, I agree. (8+ / 0-)

      It is very destructive. The truth is, if we ever want to get back on an even footing, unions have to make a comeback.

      When it comes to Democrats, criticize, don't demonize.

      by Dragon5616 on Thu Jul 29, 2010 at 06:33:30 PM PDT

      [ Parent ]

    •  You're supposed to resent those who earn... (6+ / 0-)

      The Republicans appear to be counting on each of us resenting what other people get that we don't.  So far, it seems to have worked--the 'Pubs have moved on from attacking union wages and federal employees, and have moved on to firefighters and cops.

      We need to stick together, but I don't see that there is a national union for organizing disparate types of labor.  I do salaried work, which traditionally is supposed to be pitted against the unions.  However, I'd strongly consider joining a national union just for the sake of pooling political power.

      •  Resent what hourly workers (1+ / 0-)
        Recommended by:
        Dirtandiron

        Service and clerical workers earn, not what CEO's and investment bankers earn.  The reason average Americans can't have decent paying jobs is the greedy unions rather than outsourcing and robotic assembly lines.

        •  Huh? (1+ / 0-)
          Recommended by:
          ParkRanger

          If you mean we are supposed to resent our better paid peers then yes, I agree.  As for CEOs and investment bankers, I don't resent their wealth but I sure as hell will support taxing the shit out of it.  That isn't resentment, it's self-defense.

          Not sure whether or not your comment about unions is snark.  I assume it is.  My one beef with unions is that in their zeal to protect their members, they've sometimes defended some real slackers who deserved to get fired.  Doing so reduces the value of union labor as a whole--not too smart.

          I think outsourcing is a temporary problem that will resolve itself as soon as fuel costs go up and it becomes cheaper to build stuff near the point of consumption rather than at the point of cheapest labor.

          Robotics is a real ethical dilemma.  My job is quality assurance and continuous improvement, including more efficient means of building things.  That, unfortunately, cuts jobs.  But the employer who doesn't modernize to the degree that the competition is modernized will eventually go out of business and thus provide zero jobs instead of modernizing and providing fewer jobs.  Modernizing humanely is not an easy task.

          •  I meant rethug dogma (4+ / 0-)

            Is to attack unions and high wages for blue collar, service and clerical workers , but serious income levels for the elites, protection from estate and corporate taxes , etc at the cost of living wages  is a priority for the republicans.  Hate your neighbor over a pittance but make sure the rich get richer and so many middle class people buy this shit.
            As for modernization the world won't stand still.  But when you outsource tech support and manufacturing as well as modernizing, you leave people with nothing.

            •  I agreee on all points (3+ / 0-)
              Recommended by:
              Garrett, jfromga, ParkRanger

              Regarding modernization, I think manufacturing will come back (that fuel price thing I was talking about), but I'm not so sure about tech support.  Other intellectual jobs--such as engineering--are the next at-risk jobs.

              The limiting factor on automation is size:  If you aren't big, you can't afford it.  However, manufacturing is moving toward batch production instead of mass production, which doesn't support much beyond low-level automation such as CNC machining.  It looks like labor will once again be the way to get stuff done efficiently.

    •  "The people who brought you the weekend" (7+ / 0-)

      One of my all-time favorite bumper stickers:

      Support Organized Labor.
      The people who brought you the weekend.

      Big Joe Helton: "I pay Plenty."
      Chico Marx: "Well, then we're Plenty Tough."

      by Caelian on Thu Jul 29, 2010 at 06:50:33 PM PDT

      [ Parent ]

      •  Lincoln freed the slaves (0+ / 0-)

        Doesn't mean I should join the republican party.

        As Ms. Jackson said, "What have you done for me lately?"

        •  A more relevent question is; what has (3+ / 0-)
          Recommended by:
          Garrett, Caelian, uzeromay

          happened since union power has been weakened? People lucky enough to have jobs, work more and more hours, for less money. Pensions have become 401Ks, health benefits have come to be considered a luxury. People cannot retire, but yet older folks face rampant age discrimination. The wingnuts glorify the 1950s as the epitome of America compared to now, but they never seem to realize that unionization was at it's highest in the 50s, and is very low now. If unions are so god-awful, why were things so good at the height of their power?

  •  The story about govt. policy on unionization (6+ / 0-)
    seems to match the general story about income inequality in this country.

    A pro-union position at the time of the New Deal and World War II, when income inequality was brought down.

    A more union-neutral policy, during the long period when the level of income inequality was maintained at a steady level.

    A union-hostile policy, starting with Reagan, the time when income inequality shot back up.

     

  •  So why do Kossacks support Carbon Tax and VAT? (3+ / 0-)
    Recommended by:
    Garrett, Dragon5616, ban nock

    Income inequality is a problem.  In fact, I'd argue that there's nothing more pernicious to a society than concentration of wealth.

    So, if this is the case, why do so many Kossacks support a Carbon Tax or Cap and Trade, which even supporters admit will hit the working and middle-class more than the wealthy.

    And while we're on the topic of regressive taxes, why do some prominent Dems support a national sales tax?

    When will we have the first Dem to publicly support a national wealth tax, starting at 50M, and hitting the Buffets and Ellison's at 8% annually.  Buffet often laments the regressive nature of our tax code.  Let's have him join President Obama in calling for an annual wealth tax.

    We can't have it both ways.  Either income inequality is a problem, and we can't support any regressive taxes, or it isn't a problem, and the US does need a carbon tax.

    Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project. http://www1.hamiltonproject.org/es/hamilton/hamilton_hp.htm

    by PatriciaVa on Thu Jul 29, 2010 at 06:48:03 PM PDT

  •  Small minds tending big wallets (3+ / 0-)
    Recommended by:
    Garrett, hazzcon, Dragon5616

    These are the rotten fruits of a mindset that believes that investment and "management" (and I use that term very loosely) are more valuable than the heavy-lifting, brain-powered labor that both imagines a better way and then does it. In short, it is the mindset of little minds who worship at the altar of the Division of Labor and slap each other on the back with a fat check and congratulations for having been clever enough to extract "value" from the "mindless" grunts doing the actual work.

    "Respect for the rights of others is peace." Benito Juarez

    by Blue Boy Red State on Thu Jul 29, 2010 at 06:51:28 PM PDT

  •  Please don't perpetuate the myth (4+ / 0-)
    Recommended by:
    Garrett, Odysseus, PatriciaVa, Dragon5616

    that top marginal income tax rates are meaningful to show how much the rich are paying in taxes.  They are not, UNLESS you also consider the income subject to those rates -- the exemptions, deductions, etc.  That all changed dramatically in the Tax Reform Act of 1986.  What income was subject to those top marginal rates changed significantly then.

    Because of that, charts that show top marginal rates before and after 1986 (such as the chart you include) as if they are comparable, are wrong and are misleading.

    It is much more significant to track EFFECTIVE federal income tax rates, which is a much more meaningful look at what the rich actually pay in federal income taxes.

    The CBO has been keeping EFFECTIVE federal income tax rates since 1979.  A compilation is the SECOND chart at
    this link.  

    •  Thanks for the link. (1+ / 0-)
      Recommended by:
      Garrett

      It would be interesting to see effective rates prior to 1979.

      When it comes to Democrats, criticize, don't demonize.

      by Dragon5616 on Thu Jul 29, 2010 at 07:13:35 PM PDT

      [ Parent ]

      •  I don't think the CBO kept them before 1979 (1+ / 0-)
        Recommended by:
        Garrett

        But it is interesting to compare the effective rate in 1979, when top rates where 70% but there were so many deductions/exemptions/shelters, and the effective rate in 1989, after the Reagan tax cuts AND after the Tax Reform Act of 1986.  The effective rates on the top 1% went down, but not as dramatically as some here like to say it did.  

        And the highest rates ever -- at least since the CBO has been keeping tabs -- came under Clinton.

        •  What about taxes on capital gains ? (0+ / 0-)

          The truly wealthy take very little of their income as "earned income", i.e. wages, tips and salaries.

          •  It's in there (0+ / 0-)

            That first chart includes capital gains.  There, the 1979 rate is a little higher than Clinton, and you can see that the difference is the capital gains tax rate.

            More evidence that those top marginal individual income tax rates -- like the chart in the diary -- are wrong and misleading.  

            •  Something has to be done (2+ / 0-)
              Recommended by:
              Garrett, Azazello

              about the increasing gap between the highest wage earners and average wage earners. I don't like the idea of raising taxes on the rich, but what else can you do? You have to redistribute some of the money back to the people where it belongs. The rich aren't going to give it back to workers in the form of higher wages. This diary proves they aren't increasing wages. They are taking it for themselves.

              If the massive income and wealth gaps of today existed in the 1950s-1970s, they WOULD have had a much higher effective tax rate on the rich. The income/wealth gap now is much worse than it was back then. That's why the effective tax rate now has to be higher than it was back then.

              The issue is the increasing income/wealth gap between the uber-rich and everyone else. That's the main issue here.

    •  great link thanks (1+ / 0-)
      Recommended by:
      Garrett

      "Don't fall or we both go" Derek Hersey

      by ban nock on Thu Jul 29, 2010 at 07:44:56 PM PDT

      [ Parent ]

  •  You made this very easy (4+ / 0-)
    Recommended by:
    Garrett, Caelian, jfromga, Dragon5616

    to understand. Productivity has risen, but average wages have not risen at the same rate. All by design. All the benefits of increased productivity have gone to the top 1% of wage-earners.

    So this is what workers get for increasing productivity for these companies: they keep your wages stagnant, break your unions (if you had a union to begin with), and ship your job overseas. That's the thanks you get.

    I was born around 1980. Right when the robber barons took over and started turning the world into shit. This is the only world I know.

  •  Great post! Easy immigration also a cause (2+ / 0-)
    Recommended by:
    FreeStateDem, Azazello

    This was a great post and I agree with it.  In addition to globalization easy immigration policies should be added as a cause of wage stagnation.  Does it matter if the cheap labor is performed overseas or if cheap labor is brought into the country for the purpose of flooding the labor market and forcing wages down?

    Consider the effect immigration has had on employment patterns.  Hard as it is to believe now, back in the 50's and 60's meatpacking was once a good profession for Americans with little education.  It was highly unionized and jobs were prized.  Or consider landscaping.  Once American college kids did that kind of work in the summer.  Now of course these professions are totally dominated by adult foreigners.  Go to any restaurant or gas station and you're likely to run into recent immigrants.

    Employment effects aren't limited anymore to the low skilled positions.  Consider the H-1B, L1, OPT "temporary" worker programs.  Many employers in tech, engineering, nursing, or teaching constantly insist they need these foreign workers who "coincidentally" come in very high percentages from the low wage countries (forget Japan or Western Europe).  For evidence that US corps have come to prefer foreigners over US workers go to utube and watch the Cohen and Grigsby video where immigration lawyers tell how to AVOID hiring qualified Americans!

    Immigration reduction (BOTH legal and illegal) really would make a large positive contribution in so many ways.  In the US it would probably only hurt employers and dramatically help everyone else.  Let's stop making US workers compete against the entire world through easy immigration policies.

    •  When I returned to America in 96 I tried to think (2+ / 0-)
      Recommended by:
      Garrett, Caelian

      of what job to do given my limited education and skill set. I settled on starting a busines that had to be done here, couldn't be imported. Quickly I realized all my competition was hiring workers I had to compete with for $8. Things had changed.

      "Don't fall or we both go" Derek Hersey

      by ban nock on Thu Jul 29, 2010 at 07:49:42 PM PDT

      [ Parent ]

  •  An excellent diary that has promoted (1+ / 0-)
    Recommended by:
    Garrett

    informed Kos members having real discussions.  What a pleasure.

    I can't change the direction of the wind, but I can adjust my sails to always reach my destination. ~Jimmy Dean

    by ParkRanger on Thu Jul 29, 2010 at 08:34:15 PM PDT

  •  Thinking about productivity (1+ / 0-)
    Recommended by:
    marsanges

    The Krugman quote in the diary is from the happy-smiley definition of increased productivity - more output per hour worked. The more realistic definition is same output for fewer hours worked (both definitions are mathematically equivalent).

    Fewer hours worked means fewer jobs to go around. Fewer jobs to go around means more competition for the remaining jobs, which drives the price of labor down. Lower wages for workers means more income inequality.

    Which is what has happened.

    Think about how a corporation operates (and every one I've worked for has this same attitude). The point (from their perspective) is to make a profit. You know how many widgets you sold last year, but it's not really easy or certain that you can increase widget sales this year. But you also know how many hours it took to make last years widgets, and this year's widget sales will approximate last years, so if you cut out more labor hours - eventually get rid of more workers - you increase profits even if sales are flat to down, and you really increase profits if sales increase.

    In that situation, with profit maximization as your goal, aren't you going to continually try to reduce the number of workers you employ, or at least pay lower wages per hour (by moving production offshore, for example)?

    We are here as on a darkling plain Swept with confused alarms of struggle and flight,

    by badger on Thu Jul 29, 2010 at 08:54:50 PM PDT

    •  of course. (1+ / 0-)
      Recommended by:
      Garrett

      thats one of the banes of modern industrial labour. In principle, labour can stand up to if effectively, IF unionization rate is high. Because with the same metric, the cost to the company of a laborer´s hour withheld rises. If the workers are near-fully organized, they´ll have that company by the throat just by the implicit threat of action. As an example, my company (I am in Europe, unionization is high) is an integrated steelworks with 10K workers. A very few of them - several hundred - run the site´s internal railway, shuffling the hot metal around. These workers are 100% unionized and are like labour´s shock troops so to say. Should the company dare to really piss off their union, then just these few need to go on strike, and the entire site lies still; while the company has to pay full for everyone. That is so expensive so fast that the company tends to really listen to the unions.

      IGM employed the same tactics a few years back in a labor fight in the german car manufacturers industry. In such a high-productivity few-jobs environment, strategically placed strikes can have a devastating effect on an entire sector of industry.

      so as long as people keep themselves collectively organized, there´s a way to fight back.

      The downside, for which there isnt a good answer yet, is that a chasm opens between the "in" workers and the "out" jobless. That is one of the major distribution and social justice problems nowadays.

      Ici s´arrète la loi.

      by marsanges on Thu Jul 29, 2010 at 10:35:36 PM PDT

      [ Parent ]

  •  taft-hartley also made the unions more cautious (2+ / 0-)
    Recommended by:
    Garrett, Dirtandiron

    before taft-hartley, wild-cat strikes would force unions to follow workers, but after, union leaders had the power to enforce labor peace.

    also banning secondary boycotts was a disaster for working people,

  •  Live better, shop Walmart. (1+ / 0-)
    Recommended by:
    Garrett

    Downward pressure on wages forces US consumers buy more and more cheaply-made foreign goods in order to maintain their standard of living. But buying cheaper foreign goods and services leads to fewer US jobs and more downward wage pressure in the US, causing wages to slip further, leaving many US consumers with little choice but to buy cheap foreign goods and services, which leads to even fewer jobs and more downward pressure on wages--ad infinitum.

    She was only a whiskey maker, but he loved her still.

    by camlbacker on Thu Jul 29, 2010 at 10:13:52 PM PDT

    •  people buy groceries at WalMart (0+ / 0-)

      You talk about cheap foreign-made stuff. I am not a huge WalMart guy, but when I go, I see people buying milk, bread, eggs, toothpaste and toilet paper. All at prices much lower than Kroger.

      Do you realize how much further your food dollars goes at WalMart? For Poor and working class families it makes a big difference.  

  •  productivity is a meaningless 1950's measure (0+ / 0-)

    If you have a crew working in an auto factory, you can measure productivity.

    If you have a group coding a new Fire Fox plug-in, how do you measure productivity?

    Count lines of code? -- in programming bigger seldom means better.

    The truth is in a knowledge/information economy you can't acurately measure prodcutivity.

    Since 90% of America doesn't work in manufacturing, the numbers are meaningless.

    These number are SWAQ's at best.

  •  turning this around (2+ / 0-)
    Recommended by:
    Garrett, Brian B

    requires a dedicated, noncompromising social democratic party and policy. First and formeost a tax policy that goes the swedish oute for a while (can be relaxed a bit when things are back to 1980s relations but not before then). Such a tax structure must make it capital returns from finance unattractive compared to caputal returns from manufacturing. That can be done, one "just" has to want it, and has to have the staying power to shrug it off if right wingers and liberals jump up and down. That of course only works if the party that tries that, tries to make a direct contract with the voters on it, not via "media image". IIRC those roosevelt and truman fellows did just that. but thats a sidetrack. It can be done. It is very well possible to levy, just as an example, a transaction tax on paper trades at wall street that actually drives most of the returns of that into government hands. Do such a thing and all the destructive financial speculative bubblicity will vanish in a flash. Social democratic policy must be completely upfrint and unapologetic about wanting to change society, and how it wants to change society. In Europe, now after the scare of the recent Great Recession, even right-bourgeois governments now propose a Tobin Tax (Sarkozy and Merkel, of all people). in fact the combination of tax policy, labour laws promoting unionization to balance the powers in companies, and education policy are the classic three pillars of social democratic politics and they did succeed to form the relatively egalitarian broad-middle-class society whose loss you people seem to mourn. So, its not at all unknown what to do! The only thing is, one has to actually (a) want it; (b) stop caring about the rest of the political noisemachine. When socialists first grew and layed the base for modern societies, the "accepted dialogue" of the upper classes (Gilded Age) was no less property centered and "freedom of market" centered as it is today. The socialists stuck to their guns and they did not care what the Tory newspapers of their time wrote. They founded, and exclusively read, their own newspapers. LÁurore, Vorwaerts, Volkskrant. If the American people actually wants to regain the lost society it had, it will have to do the same. No one should care what this Fox News channel is saying. Why bother? No one should tune in to them. If there is no progressive channel, or paper, or gazette or whatever media you want - found it. Read it - exclusively. A better society was never made by trying to convince those who don´t want it (and stand to lose power by it). If the Americans actually want it, they need to retransform the Democratic Party into an actual Social Democratic Party; or found one to supersede it. And then it is between that party and the people. In our Old Continent, we had the advantage/disadvantage of going through wars and civil wars which forced the necessity of Social Democracy on everyone by sheer weight of events. (But at what cost!) If the Americans don´t want that lost society back, then so be it; it is up to them. But they´ll never get it back by talking to and listening to those whose profit is invested in the current neofeudal route. As long as progressives don´t actually cut off the "dialogue" with their enemies, and actually begin to fight them like the enemies they are, there will be no return.  

    Ici s´arrète la loi.

    by marsanges on Thu Jul 29, 2010 at 11:37:50 PM PDT

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