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Sunday, September 03, 2006

Another Year, Another Wage Loss - by Robert Kuttner

Labor Day was created by the machinists union in New York in 1882 as a ``workingmen's holiday." Unions all over America adopted the idea. By 1894, Congress passed legislation making Labor Day an official holiday. The day also celebrated the act of organizing, politically and in the workplace, to improve livelihoods and lives.

Today, the politics have largely been leached out of it. Labor Day is a long weekend that marks summer's end.

And that extra day of rest is needed more than ever. Government statistics show that the typical family works about 500 more hours a year than families did 30 years ago, because it takes two incomes to make it. Even so, family incomes are failing to keep pace with the cost of living.

This past week, these items have been in the news: "Read More" click link below


The Census Bureau reported that median incomes for working-age families were down again, for the fifth straight year. Real median income for households under age 65 is down by 5.4 percent since 2000, even though the economy has grown every year. All of that gain has gone to upper-bracket people and corporate profits.

The Pew Research Center released an extensive survey on public attitudes about the economy. Pew reported, ``The public thinks that workers were better off a generation ago on every key dimension of worker life -- be it wages, benefits, retirement plans, on-the-job stress, the loyalty they are shown by employers." And, statistically, the public is right.

The Globe recently reported that chief executives of nonprofit hospitals now routinely make more than $1 million. University presidents are not far behind.

The Economic Policy Institute (on whose board I serve) has released its annual, encyclopedic report, ``The State of Working America." Among its findings: The economy's productivity increased by a remarkable 33.5 percent between 1995 and 2005, but real wages have declined since 2000. Employer-provided health coverage declined from 69 percent in 1979 to 56 percent in 2004. The top 1 percent's share of interest, dividends, and capital gains has risen from 37.8 percent in 1979 to 57.5 percent in 2003.

Politically, it's evident what is occurring. Those in a position to capture astronomical incomes are awarding themselves an ever-larger share of the national economic pie. Meanwhile, ordinary incomes, job security, health security, and retirement security are eroding.

The political mystery is why everyone else is not kicking up a fuss. After all, as the Pew report suggests, it's not as if people are unaware of what's happening. Here's a clue to some of the puzzle: Polls show that people do want more reliable wages, pensions, and health insurance. But too many people have given up on the idea that the political process can be used to restore the American dream.

Theda Skocpol, author of several books of social history, tells of interviewing a hard-pressed woman with small children and a low-wage job. Her only social support was that her mother-in-law -- the children's grandmother -- looked after her children while she worked. As Skocpol observes, this was possible only because Social Security enabled the grandmother not to have to work herself.

Skocpol asked the woman whether she thought there was anything government might do to improve her economic circumstances. The woman replied, ``Nothing they do there ever makes a difference for people like me."

But that was not always so. Social Security, Medicare, college aid, the GI Bill, government wage-and-hour laws, and government protection of the right to unionize made a real difference in people's lives.

These policies, which benefited the vast middle class (and helped to create it), did not just happen. They were the result of political organizing and a public awareness that government could affect the economic opportunity and security of ordinary Americans, for better or worse.

It's understandable why politics today is often a turnoff. But if a great many middle-class and poor Americans have given up on politics, you can be sure that the economic elite is invested in politics as never before. The changes in the tax code and regulatory laws and workplace practices that benefit America's super-rich did not just happen, either. They are the result of relentless maneuvering by the financial elite and its political allies.

So this Labor Day, at the beach or in town, we suffer not just from reduced economic opportunity but diminished political imagination. You can ignore politics, but you can't escape it. So we might as well reclaim democracy to benefit the many rather than the few.

Robert Kuttner is co-editor of The American Prospect.

© Copyright 2006 Boston Globe


Another Year, Another Wage Loss


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