As Labor Day approaches, almost every day you can read about the class warfare–yup, I said it–underway in the country. I pointed this out yesterday. Today, Paul Krugman has a column called The Big Disconnect:
There are still some pundits out there lecturing people about how great the economy is. But most analysts seem to finally realize that Americans have good reasons to be unhappy with the state of the economy: although G.D.P. growth has been pretty good for the last few years, most workers have seen their wages lag behind inflation and their benefits deteriorate.
Hmmm…why? Partly because thousands of workers are fired every year when they try to organize a union so average people have no leverage at work.
The disconnect between overall economic growth and the growing squeeze on many working Americans will probably play a big role this November, partly because President Bush seems so out of touch: the more he insists that it’s a great economy, the angrier voters seem to get. But the disconnect didn’t begin with Mr. Bush, and it won’t end with him, unless we have a major change in policies.
Right. The disconnect also rests within the Democratic Party.
The stagnation of real wages — wages adjusted for inflation — actually goes back more than 30 years. The real wage of nonsupervisory workers reached a peak in the early 1970’s, at the end of the postwar boom. Since then workers have sometimes gained ground, sometimes lost it, but they have never earned as much per hour as they did in 1973.
I would say that Krugman should have said that the disconnect going back 30 years also involved the widening gap between growing productivity and wages–workers were working harder and more efficiently yet companies were giving them the finger when it came to wages.
Then Krugman picks up the health care crisis issue:
On the other side, workers’ concern about worsening benefits is new. In 1997, a plurality of workers said that employment benefits were better than they used to be. That made sense: in 1997, the health care crisis, which had been a big political issue a few years earlier, seemed to have gone into remission. Medical costs were relatively stable, and in a tight labor market, employers were competing to offer improved benefits. Workers felt, rightly, that benefits were pretty good by historical standards.
But now the health care crisis is back, both because medical costs are rising rapidly and because we’re living in an increasingly Wal-Martized economy, in which even big, highly profitable employers offer minimal benefits. Employment-based insurance began a steep decline with the 2001 recession, and the decline has continued in spite of economic recovery.
The latest Census report on incomes, poverty and health insurance, released this week, shows that in 2005, four years into the economic expansion, the percentage of Americans with private insurance of any kind reached its lowest level since 1987. And Americans feel, again correctly, that benefits are worse than they used to be.
Why have workers done so badly in a rich nation that keeps getting richer? That’s a matter of dispute, although I believe there’s a large political component: what we see today is the result of a quarter-century of policies that have systematically reduced workers’ bargaining power.
Krugman, can you say UNIONS? It’s amazing that he talks about workers’ bargaining power without pointing out the obvious connection to the decline of unions thanks to an increase in illegal union-busting behavior and the shattering of anything resembling a fair labor framework.
