Workers face an economic power gap

By Harold Meyerson, Published: September 2

On Labor Day 2012, U.S. workers are in dire straits, and an increasing share of elite opinion says it’s their own damned fault.
Not quite so bluntly, of course. But it’s impossible to read the business press and the editorial pages without encountering the argument that the economy hasn’t perked up because of the “skills gap.” U.S. workers, this thinking goes, just don’t have the skills required by our advanced economy. If only our workers and schools were better, if only teachers unions ceased to exist, all would be well.
There are indeed some skills-gap problems plaguing the economy, but the downward mobility of U.S. workers results far more from their lack of power than their lack of skills.
Since the recession bottomed out in June 2009, median household income has fallen by $2,544, to $50,964 — a 5 percent drop — according to a new report by Sentier Research. It’s no mystery why wages are falling even during the recovery. In a study released last week, the National Employment Law Project found that 58 percent of the jobs created since 2010 pay between $7.69 and $13.83 an hour. New jobs in the mid-range of the wage distribution, paying $13.84 to $21.13, account for just 22 percent of the positions created since the recovery began, though they constituted 60 percent of the jobs lost in the downturn. Higher-wage jobs are just 20 percent of the newly created positions. The biggest increase in jobs has come in food preparation and retail sales.
These numbers underscore the question of whether our primary problem is the lack of skills or, rather, the lack of good jobs. And the problem isn’t just that mid-range jobs were offshored or fell prey to the construction bust. It’s also the declining or stagnating wages and benefits in a far wider range of sectors — even where U.S. workers have the skills they need and then some.
Is it really insufficient education that’s dragging down Americans? Since 1979, the share of U.S. workers with college degrees has increased from 19.7 percent to 34.3 percent, the Center for Economic and Policy Researchfound this summer. Yet the percentage of college graduates with good jobs — which the center defines as jobs paying at least $37,000 and providing health insurance and some kind of retirement plan — had declined from 43 percent in 1979 to 40 percent in 2010.
Are American workers becoming less productive? On the contrary, a Wall Street Journal survey of the Standard & Poor’s 500, the nation’s largest publicly traded companies, found that their revenue per worker increased from $378,000 in 2007 to $420,000 in 2010. The problem is that workers get none of that increase. As economists Ian Dew-Becker and Robert Gordon have shown, all productivity gains in recent decades have gone to the wealthiest 10 percent of Americans, in sharp contrast to the three decades following World War II, when Americans at all income levels shared in the productivity increases.
The primary plight of U.S. workers isn’t their lack of skills. It’s their lack of power. With the collapse of unions, which represented a third of the private-sector workforce in the mid-20th century but just 7 percent today, workers simply have no capacity to bargain for their share of the revenue they produce.
This is not to say that there is no skills gap or that U.S. schools don’t need improvement. But the decline of unions has both weakened workers’ bargaining power and diminished the kind of apprenticeship programs that the building trades unions have long (and ably) provided. Under increasing right-wing pressure to justify their very existence, however, some unions in other sectors are embarking on skills training or professional development programs.
The most notable is that of the American Federation of Teachers (AFT), which has created an interactive professional development Web site for teachers called Share My Lesson in response to school districts cutting back on their ongoing teacher education. “Teachers want and need to share best practices with each other,” AFT President Randi Weingarten told me, so her union is rolling out this site as the school year begins.
Unions can address the skills gap just as, in the days when they were larger, they could address the economic power gap. But if the war that business and Republicans are waging on labor isn’t defeated, good jobs will continue to dwindle and work in America will grow steadily less rewarding.
And a happy Labor Day to you.