Commentary: Job insecurity and lower wages plague the American worker

Teresa Ghilarducci

Teresa Ghilarducci Professor, Economics, Schwartz Centre for Economic Policy Analysis

Every economics student knows that when demand outpaces supply, prices should go up. But, despite an historically low 3.9 per cent unemployment rate in the United States, the “prices” for American workers – their wages – are stagnating. Why?

There are two reasons: One pertains to measurement, the other to power.

The first explanation is admittedly superficial and bypasses the capital-labour conflict altogether. It is possible, though unlikely, that labour-market tightness is being misread and that many people who want jobs are not being counted.

The second reason is more profound: Simply put, labour has lost, and capital has won. Consider the evidence:

From 1973 to 2013, hourly compensation of a typical US worker rose just 9 per cent, while productivity increased 74 per cent, putting little pressure on prices but dramatically boosting profits.

Of course, this raises another question: Why might capital be stronger than labour? There are four main explanations.

STAGNANT WAGES

First, unions are weaker today than in the past. Between 1979 and 2013, the share of private-sector workers in a union fell from about 34 per cent to 10 per cent for men, and from 16 per cent to 6 per cent for women. This has not only hurt workers on the job; it has also damaged labour's ability to lobby for higher minimum wages.

Government policy and corporate power have eroded unions’ influence, and laws and regulations have made owning capital more rewarding than ever relative to working.

For example, the 2017 GOP tax bill was sold to the public with the claim that cutting corporate taxes would give companies room to raise wages and keep profits steady. Instead, wages haven’t budged, and profits have soared.

Second, even with low unemployment, workers are insecure at work. While two thirds of Americans say this is a good time to find a quality job, just as many people fear losing their job now as in 1991, when the unemployment rate was 7 per cent, or nearly double what it is today.

The third explanation is the rise of super firms. These very large companies – think of Facebook, Amazon, Apple, Netflix, and Google (the FAANGs) – are consolidating monopoly power. 

While the technology the FAANGs deploy and the scale at which they operate have lowered consumer prices, this come at the high cost of suppressed wages for workers – who of course are the consumers.  

Finally, most new jobs today pay poorly. In fact, among the ten occupations now recording the most employment growth, only three – software developers, registered nurses, and managers – pay above-average wages.

With productivity decoupled from pay because of the rise of super firms and government policies tilted in favour of capital, popular and voter outrage should come as no surprise. But whether protest will lead to meaningful political reform or more of the same remains an open question.

***

Reposted from Channel News Asia



Posted In: Allied Approaches

Union Matters

Get to Know AFL-CIO's Affiliates: National Association of Letter Carriers

From the AFL-CIO

Next up in our series that takes a deeper look at each of our affiliates is the National Association of Letter Carriers.

Name of Union: National Association of Letter Carriers (NALC)

Mission: To unite fraternally all city letter carriers employed by the U.S. Postal Service for their mutual benefit; to obtain and secure rights as employees of the USPS and to strive at all times to promote the safety and the welfare of every member; to strive for the constant improvement of the Postal Service; and for other purposes. NALC is a single-craft union and is the sole collective-bargaining agent for city letter carriers.

Current Leadership of Union: Fredric V. Rolando serves as president of NALC, after being sworn in as the union's 18th president in 2009. Rolando began his career as a letter carrier in 1978 in South Miami before moving to Sarasota in 1984. He was elected president of Branch 2148 in 1988 and served in that role until 1999. In the ensuing years, he worked in various roles for NALC before winning his election as a national officer in 2002, when he was elected director of city delivery. In 2006, he won election as executive vice president. Rolando was re-elected as NALC president in 2010, 2014 and 2018.

Brian Renfroe serves as executive vice president, Lew Drass as vice president, Nicole Rhine as secretary-treasurer, Paul Barner as assistant secretary-treasurer, Christopher Jackson as director of city delivery, Manuel L. Peralta Jr. as director of safety and health, Dan Toth as director of retired members, Stephanie Stewart as director of the Health Benefit Plan and James W. “Jim” Yates as director of life insurance.

Number of Members: 291,000 active and retired letter carriers.

Members Work As: City letter carriers.

Industries Represented: The United States Postal Service.

History: In 1794, the first letter carriers were appointed by Congress as the implementation of the new U.S. Constitution was being put into effect. By the time of the Civil War, free delivery of city mail was established and letter carriers successfully concluded a campaign for the eight-hour workday in 1888. The next year, letter carriers came together in Milwaukee and the National Association of Letter Carriers was formed.

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