September 9, 2004
THE PRICE? AN $11 TRILLION GDP:
The Price Of Labor's Decline (David S. Broder, September 9, 2004, Washington Post)
My seatmate, a fellow reporter, was asking questions about the changes I had seen in Congress since I started covering Capitol Hill almost 50 years ago. And when we got around to discussing lobbyists, he seemed genuinely surprised when I said that back then -- and for decades afterward -- the most influential lobbyists did not represent business or trade associations but labor unions."Labor unions!" he said, reflecting the understandable surprise of a savvy reporter who knows only the congressional power alignments of the past decade.
It made me realize how rarely observers like me make the link between the decline of progressive politics and with it the near-demise of liberal legislation, and the steady weakening of organized labor. [...]
The loss of labor's political leverage is, if anything, even more striking. As I told my seatmate, when labor lobbied powerfully on Capitol Hill, it did not confine itself to bread-and-butter issues for its own members. It was at the forefront of battles for aid to education, civil rights, housing programs and a host of other social causes important to the whole community. And because it was muscular, it was heard and heeded.
Today, the shrunken Democratic caucuses in the House and Senate are probably closer to labor -- financially and politically -- than they were in the 1970s. But an enfeebled union movement is unable to sway more than a handful of Republicans. Richard Nixon, Jerry Ford and almost all of their GOP congressional leaders understood that it was in their interest to help labor achieve some of its goals. Now, unions cannot even muster the strength to force a vote on raising the minimum wage, which has not been changed in seven years.
Note that Republican acquiescence to a Democratic special interest ended with Reagan, who in breaking PATCO broke Big Labor and helped usher in the era of deflation and economic flexibility that has resulted in twenty-plus years of uninterrupted economic growth.
MORE:
Only slight pay increases seen in 2005 (FRANCINE KNOWLES, September 9, 2004, Chicago Sun-Times)
Hoping for a big boost in pay next year? Forget about it.Posted by Orrin Judd at September 9, 2004 10:01 AMBase salary increases remained at record lows this year, and only slight improvement is forecast for 2005. That's according to the latest annual survey from Hewitt Associates, which shows pay-for-performance programs maintaining popularity.
Base pay increases nationally for 2004 were consistent with 2003. Union hourly workers averaged 3.1 percent increases, salaried exempt employees 3.4 percent, salaried non-exempt 3.3 percent, non-union hourly workers 3.3 percent and executives 3.7 percent.
Modern technology, improved inventory management and larger cargo ships that made distance less of an obsticle to production also has taken its toll on the unions over the past 30 years, a trend which started with the fuel-efficent cars Japan was able to export to th U.S. in bulk after the initial oil crisis in the 1970s.
The ability of producers to call on more options to get their work done while at the same time lowering after-inflation costs on their products left the unions with either the option of accepting the new realities to remain competitive or pushing for protectionist legislation that works against the demands of the consumer. It's just not a good issue to campaign on for Democrats other than in regional elections (Option 3 would be to try and unionize the world, but that would require third world nations to start paying close to first world wages, or for John Sweeney to stand in front of a tank in Tianamen Square to protest China's prison labor abuses. Neither is likely to happen in the near future).
Posted by: John at September 9, 2004 10:21 AMYes, Ronald Reagan broke labor (PATCO got what it deservd, though, as it had endorsed Reagan for president), but the result is Wal-mart wages and exploitation of the working poor.
Posted by: Joel Thomas at September 9, 2004 11:00 AMWe are supposed to find mere 3.5% pay raises trivial?
If I remember correctly, 3% compounded annual growth results in doubling every 20 years.
Doesn't sound anything like trivial to me.
Posted by: Jeff Guinn at September 9, 2004 11:57 AMIncredibly misleading data, though. Note the words "base salary." If you dig through the data, you note that the cost of benefits has been increasing unusually rapidly. The cost of total compensation, wages + benefits, has been rising at the historically normal level of 4%.
See the Fed study here for the relevant data. (Warning: PDF)
Posted by: John Thacker at September 9, 2004 12:28 PMAnother reason for the decline of unions is precisely that successful lobbying. That makes the federal government, not the labor unions, the provider of benefits to workers.
Posted by: Annoying Old Guy at September 9, 2004 12:44 PMJoel Thomas:
It's also resulted in Wal-Mart prices, and Wal-Mart wages are high enough to allow people to purchase all they need from Wal-Mart.
Kinda like Henry Ford.
As for the exploitation of the working poor, please, please, point out to me the time and place where that hasn't occurred.
The working poor have always been "exploited", by every peoples and nation that has ever existed on Earth.