http://www.washingtonpost.com/wp-dyn/content/article/2010/09/05/AR2010090502815.html
Monday, September 6, 2010; A15
Washington Post
Hard Times For Workers on Labor Day 2010
By Harold Meyerson
On Labor Day 2010, the state of America's workers is appalling.
Millions have lost their jobs. Millions have had their lives put on
hold or thrown into reverse.
Granted, it's a global recession. The state of the world's workers --
at least in the advanced democracies -- should be equivalently
appalling. But it's not. The Great Recession has taken a far greater
toll on our nation's workers than on workers in similar countries, even
those whose economies have dipped more steeply than ours.
Consider: As of this year, U.S. gross domestic product is about 1
percent beneath its 2008 peak, compared to a drop of roughly 2 percent
in France and Germany and 5 percent in Britain and Japan. But U.S.
unemployment has increased roughly 5 percentage points since 2007,
compared to just 1 point in France and Japan and 2 in Britain. In
Germany, unemployment has actually dropped a point since the recession
began.
No wonder Christina Romer confessed bewilderment at the scope of
American job losses in her valedictory speech as head of the
president's Council of Economic Advisers last week. American employers
have responded to recession with far more layoffs than their
counterparts in comparable or even worse situations in other nations.
One reason for this anomaly is that productivity has surged in the
United States, enabling employers to maintain output with far fewer
workers. For those workers still on the job, though, this story
seemingly should have a happy ending: Sustained production with fewer
workers should equal higher wages, should it not?
It should, but it hasn't. As Andrew Sum and Joseph McLaughlin of
Northeastern University's Center for Labor Market Studies have
documented, pretax corporate profits increased $388 billion from the
low point of the current recession, the second quarter of 2009, to the
third quarter thereafter, while wages increased just $68 billion. At a
comparable point in the 1981-82 recession, corporate profits came to
just 10 percent of the combined uptick in profits and wages. This time
around, they amount to 85 percent.
If you've wondered how big banks' profits have rebounded to pre-crisis
levels and how American corporations have come to be sitting on $1.8
trillion in cash -- even as unemployment remains well above 9 percent
-- wonder no more. They have pocketed their revenue, neither resuming
lending (if they're banks), nor rehiring laid-off workers nor giving
raises to those who have continued to work for them.
A similar tale can be told about employers and health insurance, the
costs of which have continued to rise. It's not the employers, however,
who have borne those increases. A survey, released Thursday by the
Kaiser Family Foundation and the Health Research & Educational Trust,
shows that employee premiums rose 13.7 percent over last year, while
the amount that employers contributed dropped -- dropped! -- 0.9
percent.
Only a purblind ideologue could miss the pattern here. American
employers -- more than employers in other nations and more than
American employers in earlier downturns -- have imposed the costs of
the recession and, increasingly, the costs of doing business, on their
workers, and kept for themselves damn near all the proceeds from doing
business.
What gives? Are American employers meaner than their European
counterparts and American forebears? I doubt it. The difference is that
American workers have markedly less power than their European
counterparts and their American forebears.
That's partly because unemployment remains so high here. More
fundamentally, though, the U.S. private sector is almost entirely -- 93
percent -- nonunion. Unlike European workers, unlike their own parents
and grandparents who lived in a much more heavily unionized America,
U.S. workers are now powerless to stop their employers from pocketing
all the change.
The source of this problem is outlined in two reports scheduled for
release Monday from two very different organizations, the liberal Human
Rights Watch, and Freedom House, an organization with a staunch
Lane-Kirkland-esque antipathy toward authoritarian regimes left and
right: Through the weakness of our labor laws, the reports say,
private-sector American workers can no longer form unions. Human Rights
Watch documents how corporations that are model (and highly profitable)
employers in Europe and frequently collaborate with unions there
descend to American employer norms -- denying workers the right to join
unions -- when they come over here. Freedom House, citing the
near-impossibility of forming unions in this country, laments that the
United States cannot be classed among the 41 nations that afford their
workers full freedoms.
A union-free America. Growth down a little, employment down a lot.
Profits and productivity up, wages flat. Health-care costs up for
workers, down for employers. The return of a thriving middle class?
Dream on.
And a happy Labor Day, one and all.