We need a vital union movement today as much as we ever have.
The American economy is expanding and productivity is reaching its highest levels in many years. Inflation is down, the stock market is up. So everything is going along pretty well, right? Wrong. Things are going very well for some people, but less and less well for most. In fact, we now have the widest income gap between wealthy and ordinary Americans in our modern history, and the widest of any industrialized country. For a nation with our traditions, that's not a good sign.
For some time now, the vast majority of U.S. workers have not seen gains from the economy's growing productivity reflected in their pay and working conditions. In fact, among all the rising economic indicators, individual earning power is the one that has been dropping steadily. As Sean Reilly reports in the July/ August issue of The Washington Monthly, male high school graduates (who make up more than half of all male workers) have lost 20 percent of their earning power in real terms since 1972. Nearly 20 percent of all workers today take home pay that leaves them below the poverty line. A major study by the Economic Policy Institute shows that income growth for American families slowed to under 1 percent in the 1970s, neared a standstill in the 1980s, and actually went into reverse between 1989 and 1993, when the typical family lost 6.9 percent in total income. And the minimum wage will reach a 40-year low in real terms next year unless Congress acts to raise it.
Working people feel the squeeze not just in pay but in shrinking benefits. Reilly notes that the proportion of workers with employer-paid pension plans dropped by 25 percent between 1979 and 1988, and the proportion of workers under 65 who had employer-paid health care dropped from 63 to 56 percent.
At the opposite end of the income spectrum, things look a lot brighter. In 1972, corporate chief executives earned 40 times what average workers earned; now it's 140 times as much. In the 1980s, the total amount spent on salaries of over $1 million grew by 2,200 percent -- 50 times the growth of salaries between $20,000 and $50,000. Between 1980 and 1989, income in the top 1 percent of American families grew by 62.9 percent -- amounting to 53 .2 percent of all families' income growth in those years -- while income in the bottom 60 percent of all families declined. By the end of the decade, the total income of the top 1 percent equaled the total income of the bottom 40 percent.
In the Gilded Age of the late 1800s, the contrast between the way the richest Americans lived and the conditions of the people they employed stoked the rise of the labor movement. By the 1950s, one-third of American workers were union members. The more decent wages they won through collective bargaining allowed them to move into the middle class, investing in homes, consumer goods, and college education for their children. It's no mystery that the greatest expansion of the middle class in our history coincided with the peak years of union membership. That's what unions exist to do: Enable working people to share in the prosperity produced by their labor.
It's also no mystery that the declining earnings of American workers parallel the decline in unions' strength over the last 20 years. Today, only 1 in 6 workers is represented by a union, and if you take out public-sector unions, fewer than1 in 10 are union members. If that trend continues, by the year 2005 fewer than 1 in 20 private-sector workers will belong to a union.
U.S. businesses have been able to enhance profits and weaken unions by moving many unskilled and semi- skilled jobs offshore, eliminating others, and using the harsh threat of permanent worker replacement to force employees into wage and benefit concessions. A lot of the school clothes that U.S. parents buy for their children, for example, are actually made by other children, who work for pennies in horrific sweatshops around the globe and never see a schoolbook. Sweatshops and child labor are also on the rise here. And even the skilled jobs that are supposed to be the backbone of our high-tech future are now being moved into the hands of college graduates in other countries who will work for less, as the August 28 New York Times reported in its lead story.
Economic globalization is proving to be great for investors but terrible for ordinary Americans. Ask yourself this: If less and less of America's wealth is reinvested in our own workforce, who will buy the houses and consumer goods, pay the taxes, invest in college, support the American dream? The truth is that we are on a dangerous course today, and we need a vital union movement now as much as we ever have to fight for the interests of working Americans. Labor policies that limit the economic opportunity of the many so a few may feast will not sustain this country.