plutocrats against the rest

"The World is dividing into two blocs - the Plutonomy and the rest. The US, UK, and Canada are the key Plutonomies - economies powered by the wealthy.In a plutonomy there is no such animal as “the U.S. consumer” or “the UK consumer”, or indeed the “Russian consumer”. There are rich consumers, few in number, but disproportionate in the gigantic slice of income and consumption they take. There are the rest, the “non-rich”, the multitudinous many, but only accounting for surprisingly small bites of the national pie." Citigroup Report 2005

The median family income in the US dropped in the years before this recession. It went from $52,301 (in 2009 dollars) in 2000 to $50,112 in 2008. And, of course it continued to drop as the recession set in. Was it that labor became less productive? No. In fact, there has been a major gap between the increase in the productivity of our workforce and the increase in their wages. Even when wages were improving at the end of the Clinton years, productivity went up 2.5% per year and median hourly wages went up only 1.5%. From 2000 to 2004 worker productivity exploded by an annual rate of 3.8% but hourly wages went up only 1% and median family income actually dropped 0.9%. Although worker productivity has continually risen since the mid-1970s, wages haven’t kept pace, said Daisy Quarm, an associate professor of sociology at UC. According to the Economic Policy Institute, productivity has been on the rise since 1975, and has been ever since. “But the people in the middle, the workers, at 80 to 90 percent, are not benefitting very much from that increased productively,” she said.

The bottom line is that people who work for a living (most of us) are getting a smaller and smaller share of the economic pie. At Forbes.com, Eva Pereira noted recently that since 1983, 43% of all financial wealth created in America went to the top 1%, 94% went to the top 20% while the remaining 80% of Americans were left to divvy up just 6% of the wealth created since the early 1980s.

In August of 2006, the New York Times reported that Federal Reserve study showed that, "Wages and salaries now make up the lowest share of the nation's gross national product since the government began recording data in 1947; while corporate profits have climbed to their highest shares since the 1960."

Virtually all of the increase in gross domestic product over the ten years before the Great Recession went to the wealthiest 2% of the population. Between 1980 and 2004, real wages in manufacturing fell 1%, while real income of the richest one percent rose 135%. These changes in income distribution are not the result of "natural laws." They are the result of systems set up by human beings that differentially benefit different groups in the society.

The single largest contributor to this stagnation of middle incomes has been the corporate attack on organized labor. The percentage of private sector workers in unions has shrunk from 35 percent to 7%. The exception has been the public sector, where 35% of teachers, firemen and public service workers now have access to collective bargaining.The last thirty years shows conclusively that the "competitive market" -- absent collective bargaining -- simply does not assure that everyday employees share in the fruits of increased productivity or economic growth. Left to their own devices, CEO's will pad their own massive incomes and seek higher returns for the stockholders that hire them. That is especially true in an economic world that is globalized -- where CEO's can often hire labor at pennies on the dollar of what they would have to pay in the U.S. - if it were not for union contracts.

In Wisconsin, Governor Scott Walker and his corporate supporters want to destroy labor unions -- to eliminate the right to choose a union. They want a low wage economy. They want the freedom to pay people as little as possible at their companies -- and in the government. They believe if they can break public employee unions, that they can ultimately eliminate organized labor as a meaningful force. The capitalist clas are hoping that you can always hire one-half of the working class to kill the benefits of the other half, to paraphrase a quote from railroad baron Jay Gould. Pay no attention to that man in the gated community who shipped your job overseas, destroyed the value of your home, drained the wealth out of the country and tanked the economy, go after your neighbor for having health care coverage. The war on public sector unions began in Wisconsin and has since spread to Indiana, Ohio and Michigan.

Attacking unions is not just about the money, it's about power. Through the early part of the 20th-century unions lacked the legal authority to engage in collective bargaining and strike. Strikes to improve wages and labor conditions were considered restraint of trade or illegal combinations that were fought both by the law and by brute force. The Pinkertons were originally a police force used to break up strikes, and the origins of municipal police departments can be traced to efforts to control unions. Debates surrounding the Sherman Anti-Trust Act often included discussion over whether unions were trusts that should be prevented. But through the early 20th century workers continued to strike and organize. They organized to earn better wages for their families. They organized to improve deadly labor conditions in mines, mills, and factories. Finally, the Wagner Act — aka the National Labor Relations Act (NLRA) — in 1935 recognized the right to collectively bargain and organize in the private sector. Subsequently, similar rights were extended to workers in the public sector. Wages, income and working conditions dramatically increased, economic inequalities decreased, work place safety improved, and features such as the 8-hour day/40-hour week emerged. Yes, in many cases unions sided with management on protectionist practices and had corruption problems, but they also did a lot of good, by raising the standard of living.

By the early 1950s private-sector unions constituted approximately 38 percent of the private-sector workers but the 50s was the high point of unions. The 1970s brought the Vietnam War and oil embargos. It was at this point that corporate interests converged to attack labor unions. Restructuring domestic and global labor markets by busting unions and dismantling government regulations would free corporations to cut wages, restore profits, and shift capital across the world. The beginning and most visible effort to break unions and limit their power was the decision by President Reagan to dismantle PATCO in 1981. He busted the air traffic controllers' union and that sent a clear signal that it was OK to go after unions. The corporations waged a battle against unions, claiming that America's economic decline was rooted in high union wages, inflexible rules, health care and benefits. Of course, not all of this is true. The unions became the scapegoat for American industrial decline, hiding the fact that many businesss failed to invest in new facilities and instead bled old ones, had failed to respond to new technological advances and sought restrictive trade policies to prevent foreign competition. Unions and workers were not the cause and they were not the reasons for economic outsourcing to China. Increased corporate power, globalization, and the drive to maximize profits were the cause.

The war on unions has been a success. Private-sector unions are now relatively weak. They now constitute about 8 percent of the private-sector workforce. Their decline correlates with significant increases in economic inequality, declining wealth for workers. Public-sector unions are now under attack. Blame the public-sector unions and fault the workers. It is just so easy. It is a great wedge issue — use the dispair, fuel the resentment and play the divide and conquer cards with private-sector workers - if only business could be free to hire and fire at will, slash wages, and cut and gut benefits, then we would not need to raise taxes and deficits would disappear. It is such a simple solution - level the playing field by bringing everyone downinstead of raising the standard of living for all workers . This is what the battle in Wisconsin is about.

American workers need unions now more than ever.

Taken from here and here and from here