Labor Advocate Online

Week In Review

A Weekly Column by Bill Onasch
October 22, 2006

Economists Puzzled As Worker Share Shrinks
Worker wages and benefits as a percentage of the U.S. Gross Domestic Product shrank over the past five years and now stand at 56.5 percent. A similar trend is at work in all the major industrialized countries except Britain and France where there was growth of less than one percent. “It’s a bit of a mystery why the labor share is falling so much,” said Alan B. Krueger, a professor of economics at Princeton.

Fortunately, an inquisitive New York Times reporter Eduardo Porter wasn’t content with this academic shrug of the shoulders. He looked for some clues that might suggest an explanation.

●The changing composition of the economy. Between 1975-1995 manufacturing slipped from 28 to 22 percent of the GDP while finance and accounting grew from 18 to 27 percent. As Porter notes, “This shift took a chunk out of the workers’ share because banks and other financial companies use fewer workers than manufacturers to do what they do, and they don’t pay their workers proportionally more.” As a matter of fact, the mostly unorganized nonprofessional financial sector workers, while highly productive, are mainly low wage whereas manufacturing has been the historic venue for strong unionism.

●Porter cites another change that has affected both of these sectors, “Cheap imports from China and cheap call centers in India have increased the competition for jobs. New technologies have also replaced many middle-income workers. And immigration is on the rise in much of the industrial world.”

●As a result of these factors, Porter goes on to say, “In the United States, where labor unions have lost much of their bargaining power and few workplace regulations limit employers’ decisions, companies have had an easier time reducing real wages. In the last year, wages have risen only enough to keep pace with inflation. In real terms, the wages of nonmanagement employees in the United States are now 10 percent below their level in the early 1970’s, according to Labor Department statistics.”

There, that wasn’t that hard, was it? A restructured, globalized economy has eroded traditional worker bargaining power and that has led to the bosses getting more and us getting less. All this may befuddle Ivy League economists—and much of our union leadership—but it is well understood by those living off the labor of others.

More Chairman Andy Thought
One of our readers wrote,

“I know you’re not going to buy Chairman Andy’s book. Neither am I; guess I’ll have to wait until the library gets a copy. He’s been getting a lot of play lately in the liberal blogosphere as the “progressive” face of labor. Thought you’d like to see the latest:

But what excited me most was listening to SEIU members talk about our partnership approach in the public sector, called Innovation and Quality (IQ). Learning from the efforts of the firefighters, our new locals in Chandler , Tempe , and Pima County have reoriented themselves to work with management to improving the quality of public services. Tom, an SEIU member who drove me from Phoenix to Tucson , said he is experimenting with changing the names of Stewards, who serve as union representatives in the workplace, to ‘Resolutions Specialists.’ The reason, he said, is that they are trying to resolve issues to improve quality services, and management looks at those efforts as a positive approach, as opposed to an approach that creates new problems.

“You know, I’ve often wondered how to turn things around for the labor movement. There it was, right in front of my eyes. Rename stewards ‘resolution specialists.’

“I better stop now. I haven’t taken my blood pressure medication yet.

“Hope you or one of your associates will be able to review this book.”

Brother, I’m considering checking the used prices on Amazon. I believe in recycling.

A NAFTA Back At Ya
More than 50 labor organizations in Mexico, the United States and Canada, together representing several million workers, charged North Carolina and the United States with labor rules established under North American Free Trade Agreement (NAFTA).The complaint charges that 650,000 public employees in North Carolina are illegally denied the right to collective bargaining, a violation of labor protections guaranteed by the North American Agreement for Labor Cooperation (NAALC), the labor side agreement to NAFTA. It was formally filed on October 17 in Mexico by the Frente Autentico del Trabajo (FAT – the Authentic Labor Front.)

The complaint was filed at the request of UE Local 150, the North Carolina Public Service Workers Union. UE 150 represents public sector workers across the state, including municipal employees in Raleigh, Charlotte, Chapel Hill, Durham and Rocky Mount, and state employees at numerous facilities of the Department of Health and Human Services (DHHS), the University of North Carolina (UNC) system and the Department of Administration.

United Steelworkers President Leo W. Gerard said, “The Steelworkers are proud to join with the UE and democratic and independent unions in Mexico to challenge violations of what few international standards exist for preventing unions in the United States from exercising the most basic rights to organize and bargain collectively.”

For more information click here.

Caroline Lund
Readers in the UAW probably know of Caroline Lund because of her militant union activity at the joint GM-Toyota NUMMI plant in Fremont, California, chronicled in the Barking Dog newsletter. She was an early supporter of the Soldiers of Solidarity opposition in the UAW. Throughout her life she was a writer and organizer immersed in the union, antiwar, and socialist movements. I first met her at a Young Socialist Alliance convention in Chicago in 1965 when she was already beginning to play a prominent role in the youth movement against the Vietnam war.

Caroline succumbed to a long illness last week. She will be greatly missed. A memorial meeting will be held in Oakland November 11, 2:00 PM, at the Humanist Hall. Messages can be sent to: Alex Chis:

As usual, much of the material for this column was taken from stories posted on our Daily Labor News Digest, appearing Monday-Saturday by 7AM Central.

That’s all for this week.

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