Labor Decline Coincides With Growing Wealth Inequality

Jerome Cronk/ October 20, 2019/ Economics, Law/ 0 comments

Congressman Dan Neuhaus, sounds the typical Republican battle cry that an increase in the minimum wage will cost jobs, according to his op-ed piece, “Minimum-wage hike hurts rural Central Washington” (Opinion, 7/28/2019). Well, some jobs, but which ones? More importantly it will also increase overall income of wage earners. As workers earn more they spend more. An increase in spending improves prosperity and job growth and lessens inequality.

Most workers, especially factory workers, have seen a steady decline in real wages in the years following 1955 when union membership density reached its peak. The union decline coincides with wage stagnation and widening income inequality. In an analysis of labor movement trends,  Noam Schreiber of the New York Time (10/20/2019) notes that there has been “a rising gap between the money employers are making and the portion they are sharing with workers.  The share of the national income that workers receive fell in the early 2000s to its lowest level since World War II according to some measures, and collapsed further in 2009. It has yet to recover.” 

Adoption of the Taft-Hartley act in 1947 opened the floodgates to antiunion policies, especially the onslaught of state right to work laws, resulting in a drastic and steady decline in union bargaining power. It is amazing there is not more discussion of the downturn of union influence. Congressman Neuhaus doesn’t mention it and, worse yet, during the entire Democratic debates there has been little mention of labor unions and only one candidate, Jay Inslee, made any point of labor’s role (a brief one). No candidate has mentioned the Taft-Hartley Act or has suggested legislation that would outlaw right to work laws and would otherwise strengthen unions.  Repealing the anti-union provisions of Taft-Hartley would obviate most minimum wage problems. These causes of income inequality need wider discussion. Why isn’t anyone talking about this?

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