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Before your celebrate Labor Day, look at the reality of America’s workers

1 September 2014

Summary: On this Labor Day let’s revisit the lost history of the union movement, and its vital contribution to building America’s middle class. Before you celebrate, look at the situation of America’s workers, and the trends.

“If any man tells you he loves America, yet hates labor, he is a liar. If any man tells you he trusts America, yet fears labor, he is a fool.”
— attributed to Abraham Lincoln

Union: bargain or beg

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Contents

  1. Talking to the workers of America
  2. Rise and Fall of America’s Middle Class seen in graphs
  3. We throw away 150 years of effort
  4. For More Information
  5. A note from our past

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(1)  Talking to the workers of America

“There are no problems we cannot solve together, and very few that we can solve alone.
— attributed to Lyndon Baines Johnson

I travel a lot. Usually in a narrow circle of airports, hotels, and business districts. Lately I’ve gone to a wider range of events: farmers’ markets, gun shows, stock car races, etc. I chat, looking at the faces of the people I meet. Looking into their eyes. Here are my impressions, totally subjective — FWIW.

Most of the people I meet are white. I ask what they think about many things. To grossly oversimplify, in general I get similar responses. The economy (it sucks), about gold (they trust it), the government (the enemy), Blacks and Hispanics (they don’t like them), immigrants (they hate them), Asians (envy and some mistrust), police (strong but mixed feelings), the military (admiration), Obama (a wide range of unfavorable impressions).

These are strong hard-working people. They see their cultural washing away. They’re under increasing economic stress, with their class experiencing severe downward mobility (by now unmistakable). They’ve been subjected to generations of information operations by conservatives and liberals. As a result their view of the world is a confused mish-mash of discordant elements, much of which is false (about our past and present, about science and culture).

Most important, the concept of collective action has been erased from their consciousness. No matter how great their strength of the will and bodies, their worship of individualism makes them as easily controlled as sheep. This is easily seen when asking how they’d respond to a great disaster, perhaps the social collapse so many of them expect. Guns, gold, family — perhaps combined with a retreat to the hills.  A guaranteed futile fantasy.

These are the people revolutions are made of. They are soldiers waiting for a cause and a Leader. Let’s hope they get neither. My guess (emphasis on guess) is that the result will be painful for America.

(2)  Rise and Fall of America’s Middle Class seen in graphs

The economic drivers of this class struggle are easily seen. Since 1990 wages are falling as a share of Gross Domestic Income (GDI), especially for the lower middle class. Corporate profits are rising. The reasons are complex, the result has by now become unmistakable: a shift of our national income from return on labor to return on capital. Since the nation’s wealth is so highly concentrated, the result is rising inequality of income.

Wages paid as a share of Gross Domestic Income: at a post-WW2 low and falling fast.
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FRED: compensationGDI
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About half of this lost share of national income has gone to boost domestic industries’ share of Gross Domestic Income: now at the highest level since 1968, and rising.

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FRED: profits/GDI

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(3) We we throw away 150 years of effort

To remember the loneliness, the fear and the insecurity of men who once had to walk alone in huge factories, beside huge machines. To realize that labor unions have meant new dignity and pride to millions of our countrymen. To be able to see what larger pay checks mean, not to a man as an employee, but as a husband and as a father. To know these things is to understand what American labor means.

— Adlai Stevenson’s speech to the American Federation of Labor, New York City, 22 September 1952

The middle class was not a gift of the Blue Fairy. Instead of “Bibbidi-Bobbidi-Boo” there was 150 years of worker working together, mobilizing against their employers — who organized cartels to fight their employees and raise prices for their customers.

It was a long bloody struggle. The victory of unions was foundational for the growth of America’s middle class. The fall of the unions was a major factor undermining the middle class. It had many causes: corruption, greed, stupidity, infiltration by organized crime — and the long successful counter-revolution by corporations, now eroding away the middle class.

Here is the history of Labor Day:

“A labor movement in Chicago in 1894 left 30 Pullman workers dead, and later spurred Congress and President Grover Cleveland to pass a bill creating Labor Day. But the history of this holiday is rarely taught in schools, and there are few full-time labor journalists to write about working class communities.”
by James Warren, New York Daily News, 31 August 2014

For a blow-by-blow of unions rise see this series by Erik Loomis (Asst Prof of History, U RI). The toll these people paid is as much a cost of building America as that paid by the members of our armed forces.
Unity

(4) For More Information

(a) Posts about About inequality & social mobility: once our strength, now a weaknesses.

(b)  Posts about the conflict between labor and capital:

  1. The new American economy: concentrating business power to suit an unequal society, 27 April 2012
  2. Public employee unions – an anvil chained to the Democratic Party, 15 February 2013
  3. Why the 1% is winning, and we are not, 26 May 2013 — They are smart, organized, and have planned how to win.

(c) About the New America, now under construction:

  1. Origins of what may become the 3rd American Republic (a plutocracy), 8 April 2011
  2. Why Americans should love Tolkien’s Lord of the Rings – we live there, 13 December 2011
  3. The new American economy: concentrating business power to suit an unequal society, 27 April 2012
  4. The voice of plutocrats yearning for dominance and control, 16 September 2012
  5. We’ve worked through all 5 stages of grief for the Republic. Now, on to The New America!, 8 January 2013
  6. Compare our New America to the America-that-once-was (a great nation), 12 June 2013
  7. Glimpses of the New America being born now, 18 June 2013
  8. Why Elizabeth Bennet could not marry Mr. Darcy. Nor could your daughter., 12 July 2013
  9. Watch as plutocrats mold us into a New America, a nation more pleasing to their sight, 18 July 2013
  10. Billionaires mold our schools to produce better help in a New America, 20 July 2013

(5) A note from our past

.Union poster

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9 Comments leave one →
  1. Raedewald of Sutton Hoo permalink
    1 September 2014 11:37 am

    Fabius, you must be some kinda Commie liberal fink to be rememberin’ that stuff.

    There is a fixation in American culture about win-or-die. Many other countries, the unions got reformed. In America, they got crushed, and you lost out, because eveywhere else, the unions became a force for good (major contributor to Sweden’s and Germany’s industrial success, giving to all a standard of living well in excess of the American average).

    Like

  2. 1 September 2014 3:55 pm

    Give the fourty percent of private sector profits now taken by our finance sector to labor. Problem solved. After WWII this was closer to five percent. Too big to fail should be changed to too big to tolerate anymore. Our bloated banking and finance sectors are destroying this country.

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  3. 1 September 2014 5:35 pm

    Here’s all you need to know: “How Wall Street Devoured Corporate America“, Jordan Weissmann, The Atlantic, 5 March 2013

    Like

    • 1 September 2014 6:44 pm

      Beware single-factor explanations. It’s never “all you need to know.” Monetary policy, tax policy, new technology, changes in intellectual property law — many other factors at work.

      If I would name one key factor: positive feedback from rising inequality of wealth and income.

      Like

    • 1 September 2014 11:10 pm

      As a manufacturer I work with those same terrific people you describe. As shown in the link when financiers are losing profit share we are gaining. Sector measures are valuable because they show how the pie is being divided. Maybe manufacturing’s share can reach zero and nothing bad will happen. Our trading partners will exchange our printed dollars for capital equipment, steel, oil, and so on. We can throw in financial advice from our burgeoning financial advice giving sector.

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    • 2 September 2014 4:31 am

      “Maybe manufacturing’s share can reach zero and nothing bad will happen.”

      Yes, that is the kind of silly statements people make when using single-factor views of the world. US manufacturing is doing quite well. Exports as a fraction of GDP has been rising for decades.

      Like

Trackbacks

  1. Before your celebrate Labor Day, look at the reality of America’s workers | MemePosts
  2. Before your celebrate Labor Day, look at the reality of America’s workers – Fabius Maximus (blog) | Information Operations News

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