The American Middle Class Was Destroyed by Design: How to Make It Strong Again Harold Myerson, Am. Prospect, 5/14
Once upon a time in a faraway land—the United States following World War II—workers reaped what they sowed. From 1947 through 1973, their income rose in lockstep with increases in productivity. Their median compensation (wages plus benefits) increased by 95 percent as their productivity increased by 97 percent. Then, abruptly, the rewards for greater productivity started going elsewhere—to shareholders, financiers, and top corporate executives. Today, for the vast majority of American workers, the link between their productivity and their compensation no longer exists.
As economists Robert Gordon and Ian Dew-Becker have established, the gains in workers' productivity for the past three decades have gone entirely to the wealthiest 10 percent. The portion of the nation's economy that went to workers' pay and benefits—which had held remarkably steady from 1947 through 1973 at 66 percent or 67 percent—last year fell to a record low of 58 percent, while profits reached a postwar high. Today, the drive to restore workers' share has been narrowed down to the campaign to raise the minimum wage. ...
What corporate apologists won't acknowledge is that workers' incomes have been reduced by design. American business has adamantly opposed workers' efforts to organize unions. Millions of jobs have been outsourced, offshored, franchised out, reclassified as temporary or part-time, or had their wages slashed, in a successful, decades-long campaign to increase the return to capital. Indeed, the only way to explain the soaring profit margins and stock values of recent years despite anemic increases in corporate revenues is that profits have come at the expense of labor.....
....Traditionally, American workers were able to raise their wages by collective bargaining or through the clout they could wield in a full-employment economy. But the ability of private-sector workers to bargain collectively has been destroyed by the evisceration of unions, which now represent just 6.7 percent of private-sector workers.....Re-creating the other avenue for bolstering workers' leverage—a full-employment economy—looks just as remote. Historically, workers won some of their biggest wage gains when the unemployment rate dipped beneath 4 percent, as it did during World War II, the late 1960s, and the 1990s dot-com boom. But low consumer demand (itself largely the result of the diminished spending power of underpaid workers) and the continuing rise of machines that can do people's jobs have combined to diminish the workforce.
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In a nation where workers have lost the power they once had to raise their incomes, what can be done to make those incomes rise?
Here are eight proposals, beginning with some that have already been enacted in regions where labor-liberal coalitions hold sway, moving on to some that require legislative changes that are not possible today but could be tomorrow, and concluding with those that involve a fundamental reorganization of our economic system. Rebuilding America's middle-class majority will likely require them all.....
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