How the Rich Are Destroying the US Economy
brianlux
Moving through All Kinds of Terrain. Posts: 42,086
Reich's thoughts her make perfectly good sense to me. Continuing to let the few very wealthy run things into the ground doesn't. The only thing I see missing here is a better focus on local economy.
http://www.commondreams.org/view/2013/01/29-2
The Non Zero-Sum Society: How the Rich Are Destroying the US Economy
And why Walmart, McDonald's and every hospital in the country should be unionized
by Robert Reich
As President Obama said in his inaugural address last week, America “cannot succeed when a shrinking few do very well and a growing many barely make it.”
Yet that continues to be the direction we’re heading in.
A newly-released analysis by the Economic Policy Institute shows that the super-rich have done well in the economic recovery while almost everyone else has done badly. The top 1 percent of earners’ real wages grew 8.2 percent from 2009 to 2011, yet the real annual wages of Americans in the bottom 90 percent have continued to decline in the recovery, eroding by 1.2 percent between 2009 and 2011.
In other words, we’re back to the widening inequality we had before the debt bubble burst in 2008 and the economy crashed.
But the President is exactly right. Not even the very wealthy can continue to succeed without a broader-based prosperity. That’s because 70 percent of economic activity in America is consumer spending. If the bottom 90 percent of Americans are becoming poorer, they’re less able to spend. Without their spending, the economy can’t get out of first gear.
That’s a big reason why the recovery continues to be anemic, and why the International Monetary Fund just lowered its estimate for U.S. growth in 2013 to just 2 percent.
Almost a quarter of all jobs in America now pay wages below the poverty line for a family of four. The Bureau of Labor Statistics estimates 7 out of 10 growth occupations over the next decade will be low-wage — like serving customers at big-box retailers and fast-food chains.
It’s not a zero-sum game. Wealthy Americans would do better with smaller shares of a rapidly-growing economy than with the large shares they now possess of an economy that’s barely moving.
At this rate, who’s going to buy all the goods and services America is capable of producing? We can’t return to the kind of debt-financed consumption that caused the bubble in the first place.
Get it? It’s not a zero-sum game. Wealthy Americans would do better with smaller shares of a rapidly-growing economy than with the large shares they now possess of an economy that’s barely moving.
If they were rational, the wealthy would support public investments in education and job-training, a world-class infrastructure (transportation, water and sewage, energy, internet), and basic research – all of which would make the American workforce more productive.
If they were rational they’d even support labor unions – which have proven the best means of giving working people a fair share in the nation’s prosperity.
But labor unions are almost extinct.
The decline of labor unions in America tracks exactly the decline in the bottom 90 percent’s share of total earnings, and shrinkage of the middle class.
In the 1950s, when the U.S. economy was growing faster than 3 percent a year, more than a third of all working people belonged to a union. That gave them enough bargaining clout to get wages that allowed them to buy what the economy was capable of producing.
Since the late 1970s, unions have eroded – as has the purchasing power of most Americans, and not coincidentally, the average annual growth of the economy.
Last week the Bureau of Labor Statistics reported that as of 2012 only 6.6 percent of workers in the private sector were unionized. (That’s down from 6.9 percent in 2011.) That’s the lowest rate of unionization in almost a century.
What’s to blame? Partly globalization and technological change. Globalization sent many unionized manufacturing plants abroad.
Manufacturing is starting to return to America but it’s returning without many jobs. The old assembly line has been replaced by robotics and numerically-controlled machine tools.
Technologies have also replaced many formerly unionized workers in telecommunications (remember telephone operators?) and clerical jobs.
But wait. Other nations subject to the same forces have far higher levels of unionization than America. 28 percent of Canada’s workforce is unionized, as is more than 25 percent of Britain’s, and almost 20 percent of Germany’s.
Unions are almost extinct in America because we’ve chosen to make them extinct.
Unlike other rich nations, our labor laws allow employers to replace striking workers. We’ve also made it exceedingly difficult for workers to organize, and we barely penalized companies that violate labor laws. (A worker who’s illegally fired for trying to organize a union may, if lucky, get the job back along with back pay – after years of legal haggling.)
Republicans, in particular, have set out to kill off unions. Union membership dropped 13 percent last year in Wisconsin, which in 2011 curbed the collective bargaining rights of many public employees. And it fell 18 percent last year in Indiana, which last February enacted a right-to-work law (allowing employees at unionized workplaces to get all the benefits of unionization without paying for them). Last month Michigan enacted a similar law.
Don’t blame globalization and technological change for why employees at Walmart, America’s largest employer, still don’t have a union.
Don’t blame globalization and technological change for why employees at Walmart, America’s largest employer, still don’t have a union. They’re not in global competition and their jobs aren’t directly threatened by technology.
The average pay of a Walmart worker is $8.81 an hour. A third of Walmart’s employees work less than 28 hours per week and don’t qualify for benefits.
Walmart is a microcosm of the American economy. It has brazenly fought off unions. But it could easily afford to pay its workers more. It earned $16 billion last year. Much of that sum went to Walmart’s shareholders, including the family of its founder, Sam Walton.
The wealth of the Walton family now exceeds the wealth of the bottom 40 percent of American families combined, according to an analysis by the Economic Policy Institute.
But how can Walmart expect to continue to show fat profits when most of its customers are on a downward economic escalator?
Walmart should be unionized. So should McDonalds. So should every major big-box retailer and fast-food outlet in the nation. So should every hospital in America.
That way, more Americans would have enough money in their pockets to get the economy moving. And everyone – even the very rich – would benefit.
As Obama said, America cannot succeed when a shrinking few do very well and a growing many barely make it.
http://www.commondreams.org/view/2013/01/29-2
The Non Zero-Sum Society: How the Rich Are Destroying the US Economy
And why Walmart, McDonald's and every hospital in the country should be unionized
by Robert Reich
As President Obama said in his inaugural address last week, America “cannot succeed when a shrinking few do very well and a growing many barely make it.”
Yet that continues to be the direction we’re heading in.
A newly-released analysis by the Economic Policy Institute shows that the super-rich have done well in the economic recovery while almost everyone else has done badly. The top 1 percent of earners’ real wages grew 8.2 percent from 2009 to 2011, yet the real annual wages of Americans in the bottom 90 percent have continued to decline in the recovery, eroding by 1.2 percent between 2009 and 2011.
In other words, we’re back to the widening inequality we had before the debt bubble burst in 2008 and the economy crashed.
But the President is exactly right. Not even the very wealthy can continue to succeed without a broader-based prosperity. That’s because 70 percent of economic activity in America is consumer spending. If the bottom 90 percent of Americans are becoming poorer, they’re less able to spend. Without their spending, the economy can’t get out of first gear.
That’s a big reason why the recovery continues to be anemic, and why the International Monetary Fund just lowered its estimate for U.S. growth in 2013 to just 2 percent.
Almost a quarter of all jobs in America now pay wages below the poverty line for a family of four. The Bureau of Labor Statistics estimates 7 out of 10 growth occupations over the next decade will be low-wage — like serving customers at big-box retailers and fast-food chains.
It’s not a zero-sum game. Wealthy Americans would do better with smaller shares of a rapidly-growing economy than with the large shares they now possess of an economy that’s barely moving.
At this rate, who’s going to buy all the goods and services America is capable of producing? We can’t return to the kind of debt-financed consumption that caused the bubble in the first place.
Get it? It’s not a zero-sum game. Wealthy Americans would do better with smaller shares of a rapidly-growing economy than with the large shares they now possess of an economy that’s barely moving.
If they were rational, the wealthy would support public investments in education and job-training, a world-class infrastructure (transportation, water and sewage, energy, internet), and basic research – all of which would make the American workforce more productive.
If they were rational they’d even support labor unions – which have proven the best means of giving working people a fair share in the nation’s prosperity.
But labor unions are almost extinct.
The decline of labor unions in America tracks exactly the decline in the bottom 90 percent’s share of total earnings, and shrinkage of the middle class.
In the 1950s, when the U.S. economy was growing faster than 3 percent a year, more than a third of all working people belonged to a union. That gave them enough bargaining clout to get wages that allowed them to buy what the economy was capable of producing.
Since the late 1970s, unions have eroded – as has the purchasing power of most Americans, and not coincidentally, the average annual growth of the economy.
Last week the Bureau of Labor Statistics reported that as of 2012 only 6.6 percent of workers in the private sector were unionized. (That’s down from 6.9 percent in 2011.) That’s the lowest rate of unionization in almost a century.
What’s to blame? Partly globalization and technological change. Globalization sent many unionized manufacturing plants abroad.
Manufacturing is starting to return to America but it’s returning without many jobs. The old assembly line has been replaced by robotics and numerically-controlled machine tools.
Technologies have also replaced many formerly unionized workers in telecommunications (remember telephone operators?) and clerical jobs.
But wait. Other nations subject to the same forces have far higher levels of unionization than America. 28 percent of Canada’s workforce is unionized, as is more than 25 percent of Britain’s, and almost 20 percent of Germany’s.
Unions are almost extinct in America because we’ve chosen to make them extinct.
Unlike other rich nations, our labor laws allow employers to replace striking workers. We’ve also made it exceedingly difficult for workers to organize, and we barely penalized companies that violate labor laws. (A worker who’s illegally fired for trying to organize a union may, if lucky, get the job back along with back pay – after years of legal haggling.)
Republicans, in particular, have set out to kill off unions. Union membership dropped 13 percent last year in Wisconsin, which in 2011 curbed the collective bargaining rights of many public employees. And it fell 18 percent last year in Indiana, which last February enacted a right-to-work law (allowing employees at unionized workplaces to get all the benefits of unionization without paying for them). Last month Michigan enacted a similar law.
Don’t blame globalization and technological change for why employees at Walmart, America’s largest employer, still don’t have a union.
Don’t blame globalization and technological change for why employees at Walmart, America’s largest employer, still don’t have a union. They’re not in global competition and their jobs aren’t directly threatened by technology.
The average pay of a Walmart worker is $8.81 an hour. A third of Walmart’s employees work less than 28 hours per week and don’t qualify for benefits.
Walmart is a microcosm of the American economy. It has brazenly fought off unions. But it could easily afford to pay its workers more. It earned $16 billion last year. Much of that sum went to Walmart’s shareholders, including the family of its founder, Sam Walton.
The wealth of the Walton family now exceeds the wealth of the bottom 40 percent of American families combined, according to an analysis by the Economic Policy Institute.
But how can Walmart expect to continue to show fat profits when most of its customers are on a downward economic escalator?
Walmart should be unionized. So should McDonalds. So should every major big-box retailer and fast-food outlet in the nation. So should every hospital in America.
That way, more Americans would have enough money in their pockets to get the economy moving. And everyone – even the very rich – would benefit.
As Obama said, America cannot succeed when a shrinking few do very well and a growing many barely make it.
“The fear of death follows from the fear of life. A man [or woman] who lives fully is prepared to die at any time.” Variously credited to Mark Twain or Edward Abbey.
Democracy Dies in Darkness- Washington PostPost edited by Unknown User on
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Comments
The subject of unions frustrates the heck out of me. I belonged to the Teamsters Union when I was in my twenties and really appreciated the fact that the union helped me and my co-workers (I worked in an auto parts store) acquire decent wages and be allowed to work a 5 days work week. When I started the job, the pay was rather low and we were required to work 6 eight hour days each week.
That was from 1973 to 1975. Since then, my understanding is that unions have often gone to other extremes and are, indeed, often a part of the problem. My frustration isn't with the existence of unions but rather their loss of a balanced approach. I still think a properly run union can be very good for workers.
For those of you who are in unions, what do you think- what is your take?
Why would any intelligent, hard working, high achiever want to be part of a union?
I think I answered that above, Edson. The Teamsters Union was very helpful in my early experiences as an employee. Because they have changed does not mean unions have always been useless or cannot serve a useful purpose for workers again.
For sure. There was a time and place. I was being terse. They definitely got certain safeties for employees in place. However, with laws and regulations on the books now, they aren't terribly useful and tend to hold back superior workers and/or reward sub-par performers (not to mention bankrupting companies and industries). My favorite are when they refuse to negotiate, so workers (technically their own constituents) get laid off. That's always fun to watch.
My 2nd favorite are the idiots that stand out in the freezing cold or sweltering heat next to a big inflatible rat. I mean - really? I'm not going to go into that building b/c some idiot is standing next to a big toy rodent?
Why don't people go work somewhere else?
IT would also help people if food, gas and everything else would stop going up.
Really! I mean, for cryin' out loud, there is an abundance of jobs everywhere!
not
Saying they hold back harder workers is inaccurate and shows a total ignorance about what role a union plays.
Actually, I think both is very true. Ignoring that is true ignorance. It's really a case by case matter. And everywhere I have been so far with a union, the union has made it harder to implement safety rules/regs and enforce them instead of making it a priority. But I have worked at some pretty outstanding manufacturing employers (outstanding in their true dedication to worker's safety...deficiencies elsewhere of course
Some don't have a choice. If you want to be a teacher for example, you have no choice but to join a teacher's union. In our area... one could teach at a private school and make considerably less with zero job security or much of anything else, but why would one do that?
Unions definitely have their pitfalls, but they are critical. Getting rid of them would be a mistake of the highest order. The non-unionized jobs that pay well only do so because they have to compete with rival organizations that are unionized. If no unions at all existed, working conditions across the board would plummet.
If one thinks goodwill would take care of the workers... I would be prepared to call them naive.
I belong to a union ... I have been frustrated by my union at times ... but my union is autonomous, so even though we are part of a national union any decision that the national union makes we do not have to go along with and that I like, we can make our own decisions. As for people in a union being "unproductive, lazy etc., well sure there are bad apples, but there are bad apples in any job...union or non-union. How many people are surfing the web or posting on the PJ forums from there non union office jobs ... I'm sure thats part of your job description
Union jobs have provided many people with decent wages, benefits and overall better standard of living. But I guess some people would rather see the race to the bottom than to look at those of us that are in unions and realize that we need to get back to improving people standard of living ... here in Ontario the government imposed contracts on education workers, and i've read the comments in newspapers and was shocked at how many comments were in support of the government ... I kind of figure thats why the 1% is winning and will win, the 99% are bickering amongst themselves and many of the 99% had no problem with the government (which is controlled by the 1%, in my opinion) sticking it to people who's wages are between 25 000 and 90 000 ( and those making 90 000 are not that plentiful).
Just my take ...
"Life Is What Happens To You When Your Busy Making Other Plans" John Lennon