Andrew Friedman

Don’t Mourn, Organize!

It's Labor Day 2006. These are bleak days for workers in America. A sprawling article that appeared in the New York Times last week entitled, Real Wages Fail to Match Productivity Gains, included some very powerful statistics about the state of America's workers. On this Labor Day, here are some things from the article that everyone concerned about basic fairness should think about:

Wages and salaries now make up the lowest share of the nation's gross domestic product since the government began recording the data in 1947, while corporate profits have climbed to their highest share since the 1960's.

Trade unions are much weaker than they once were, while the buying power of the minimum wage is at a 50-year low.Together, these forces have caused a growing share of the economy to go to companies instead of workers' paychecks. In the first quarter of 2006, wages and salaries represented 45 percent of gross domestic product, down from almost 50 percent in the first quarter of 2001 and a record 53.6 percent in the first quarter of 1970, according to the Commerce Department. Each percentage point now equals about $132 billion.

For most of the last century, wages and productivity-- the key measure of the economy's efficiency--have risen together, increasing rapidly through the 1950's and 60's and far more slowly in the 1970's and 80's. But in recent years, the productivity gains have continued while the pay increases have not kept up. Worker productivity rose 16.6 percent from 2000 to 2005, while total compensation for the median worker rose 7.2 percent, according to Labor Department statistics analyzed by the Economic Policy Institute, a liberal research group. Benefits accounted for most of the increase.

Today, we must think about how we can reverse these trends. There are basically two ways for workers to get a bigger piece of this rapidly growing pie: by organizing into strong unions to demand fair wages, benefits and working conditions, and by organizing to demand state action - to enforce and improve labor law, to increase the minimum wage, to provide decent health care and retirement benefits, etc.

Let's get to work.

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Posted at 8:39 AM, Sep 04, 2006 in Labor
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