How to break the 40-year working class losing streak
The Chicago Cubs broke a 108-year drought by winning the World Series last year. American workers are in a 40-year drought, but with the right game plan, they too can start to win.
Consider first the sorry facts. The median inflation-adjusted earnings of full-time male workers peaked in 1973. By contrast, the earnings of capital owners and highly paid managers have soared. The distribution of national income has shifted decisively away from labor and towards capital, especially when the measure of capital income includes the returns to human capital (that is, higher levels of education) as well as business capital.
Workers have lost in many other ways as well. Government outlays on affordable housing and public infrastructure as a share of GDP have declined sharply. Healthcare costs and college tuition costs have soared, leaving millions of households in debt, home foreclosures, and personal bankruptcy.
Back in the 1950s and 1960s, workers’ pay rose along with the national economy. Social benefits such as the GI Bill, public housing, and Medicare constituted a “social wage,” augmenting the market wage. Public investment outlays included the construction of the interstate highway system and JFK’s moonshot, which engaged around 500,000 workers and 20,000 businesses.
Since the 1960s, unions have been decimated. Back then, they represented around 33 percent of the private-sector workforce; today, only around 7 percent belong to a union. With the loss of union coverage, job security and benefits have plummeted.
How did this happen? Through class warfare, waged by the rich against the poor. Right-wing billionaires like Charles and David Koch and Robert Olin funded like-minded politicians to beat down the unions and to eliminate public-interest regulations on business. CEOs realized that if they could crush the unions, they could increase their own pay to unconscionable levels without union leaders complaining. Republican politicians understood that by crushing the unions, they would crush the Democrats as well.
These victories have transferred trillions from workers’ pay and social wages to the wealthiest Americans. To achieve such victories, the Koch brothers and their allies played the long game, funding campaigns and lobbyists not just in Washington, but in state capitals as well. Koch acolytes like Governor Scott Walker of Wisconsin came to office to break union power. The right-wing politicians mastered the art of divide and conquer. They pitted men against women, whites against blacks, native-born Americans against foreigners.
Outside of the United States, the situation is different. In Canada, union representation remains at more than 25 percent of the workforce; in Scandinavia, it’s between 50 and 70 percent. Social wages, in the form of government-financed health care and higher education, are generous. Labor laws abroad guarantee every worker several weeks of paid vacation, plus sick and parental leave.
Trump won as a supposed tribune of the white working class, but his lies to working people are being exposed. The proposal to repeal Obamacare showed Trump’s willingness — indeed, eagerness — to throw their interests overboard. Trump’s railing against Mexicans, Muslims, and Chinese won’t help American workers who are being exposed to further cuts in social wages and protective regulation. Trump’s tax cut proposals all aim at the top 1 percent.
So what do workers really need? First, a clear national goal of decent wages and working conditions for everyone; second, a new era of union organizing, aimed especially at the low-wage service economy; third, an increase in the minimum wage; and fourth, a boost in social wages, including the Earned Income Tax Credit, Medicare for all, and free college tuition for all households in need. The improved social benefits would be financed by ending the Middle East wars, closing corporate tax loopholes, and slashing the costs of health care and tuition.
Could labor really stage a rebound after 40 years of nearly continuous retreat? You bet. Just look at the defeat of the Obamacare repeal effort, Trump’s collapsing poll numbers, the advance of minimum wage legislation in many states and cities, and America’s growing revulsion at the politics of divide and conquer.
Or we could just ask the Cubs about long-overdue comebacks.
Jeffrey D. Sachs is University Professor and Director of the Center for Sustainable Development at Columbia University, and author of “The Age of Sustainable Development.”