Saturday, November 13, 2010

Workers, Wages & The Fight For The Middle Class

The right-wing war on the public sector has been chugging along since Ronald Reagan took office. The last campaign cycle saw the rhetoric intensify. The public sector wasn't sacrificing enough, they were overpaid, their benefits (pensions, health care) were excessive, and they were, pretty much, useless. Luckily, we have organizations and social scientists collecting data so we can quantify whether or not such accusations are true. The results indicate these right-wing attacks are baseless.

Joshua Holland reports, "More working people belonged to a union in the public sector (7.9 million) than in the private (7.4 million), despite the fact that corporate America employs five times the number of wage-earners." Yet the unionized workforce only represents about 10 percent of the total workforce. Those who keep pointing the finger at unions as some all-powerful entity determining elections and making or breaking the labor force obviously are unfamiliar with the actual number of unionized workers.

"In 1980, the ratio of top- to bottom-earners in Fortune 500 companies was 41 to 1. By 2007, it had risen to 411 to 1," Mr. Holland informs us. All workers are making much less compared to the very well-off. And, it is because the well-off are garnering much more of the rewards that our, everyday workers, wages are stagnating. This is a class war. Not of the poor against the rich, as conservatives want to frame the issue everytime someone mentions taxing the rich more, or making society a bit more equitable. The rich declared war on the workers decades ago. This war has nearly wiped out America's middle class. The rich are handily winning the class war.

Dean Baker discovered, "The average pension for a public employee was $22,000 a year in 2007." Hardly the Easy Street most conservatives claim that public pensions provide. Joshua Holland continues (based on the writings of Dean Baker and Paul Krugman) "State and local employees' pensions represent just 6 percent of the non-federal public sector spending...the public pension scare is little more than a phony issue." The supposed fiscal timebomb and overly-generous benefit of public pensions is more accurately a hallucination of Republicans hell-bent on destroying all decent-paying jobs in America.

Although, right-wingers would like us to believe government workers are lavishly rewarded, as Lauren Smith found, "Federal workers earn 22 percent less than their counterparts in the privatge sector, according to the U.S. Office of Personnel Management." In making their comparisons, Republicans often ignore job types, education level, and experience. When these factors are considered, public workers are shown to earn less than their private sector equivalents. Smith, correctly, also highlights the fact that, "Low-skill jobs make up a much smaller percentage of the federal workforce than the private sector." This makes public workers appear to earn much more when making blanket comparison. Likewise, conservatives tell us the size of government has been exploding, yet Smith also notes, "The federal workforce today as a proportion of the total U.S. workforce is about half what it was in 1970." Two more issues where the accusations of Republicans are completely without merit.

Others point to the minimum wage as a disincentive to hire and an excessive burden on business. Yet Arindrajit Dube, T. William Lester, and Michael Reich, "Closely analyzed employment trends for several categories of low-wage workers over a 16-year period in all counties sharing a common border with a county in another state where minimum wage increases followed a different trajectory. They report that increases in minimum wages had no negative effects on low-wage employment." Nancy Folbre adds, "Once adjusted for inflation, the federal minimum wage in the United States is lower than it was in 1967. Wage earners seem increasingly unable to capture any of the gains from technological change and productivity growth." Here is yet another conservative talking-point which the empirical evidence thoroughly discredits.

David Cay Johnston details, "In the Great Recession year of 2009 the average pay of the very highest-income Americans was five time more than their average wages and bonuses in 2008." This group of people, the 72 persons making $84.1 million or more, "Made as much as the 19 million lowest-paid people in America, who constitute one in every eight workers," Johnston adds. For some historical perspective, he then elaborates, "From 1950 to 1980, the average income of the bottom 90 percent grew tremendously. Had income growth from 1950 to 1980 continued at the same rate for the next 28 years, the average income of the bottom 90 percent in 2008 would have been 68 percent higher, instead of just 1 percent more."

The uber rich have been taking a disproportionate amount of the earnings over the past four decades at the expense everyone else. The battle is not between union and non-union. It is between an uber wealthy and the rest of us. The objective of our wage policies should be to lift everyone up, not race to the bottom for the lowest wages and least amount of benefits. Instead of arguing about the pensions, wages, and benefits of those whom have organized and bargained for such, we should be fighting to make these gains the rights of all workers, so they too can share in the gains of their labor. Rather than allowing such gains to be usurped by the well-connected and well-off, continuing a downward spiral for all workers.

1 comment:

davidcay said...

SSA revised its figures after my column prompted an internal review. The top 74 are the top 72 and average is not $518.8m but $84.1m.

That means the average for all workers is significantly lower.

Please see my followup column SCARY WAGE DATA II at