Our Financial Mess Isn't Unions' Fault
Recent assaults on the collective bargaining rights of public employees reflect an inadequate understanding of the economic conditions that spurred the creation of industrial unions and the larger organized labor movement in the United States.
Labor unions can be faulted for some excesses, but these pale in comparison with the abusive treatment of workers (excessive hours, unsafe working conditions, under-compensation in relation to contribution) that occurred under the industrial magnates and monopolistic corporations in the late 1800s and early 1900s.
This “Gilded Age” was characterized by massive accumulation of wealth by very few individuals and generally poor living conditions for the working class.
Unfortunately, these characteristics are increasingly reflected in our current economic structure.
In 2007, three-fourths of the total wealth in the United States was possessed by one-tenth of the total households. Between 1979 and 2007, only the top fifth of all households experienced an increase in the share of total after-tax income, with the top 1 percent doubling its share. This distribution has likely worsened during the recent economic turmoil as investor profits have increased and home equity values have declined. Such a distorted concentration of total national income and wealth in fewer households does little to bolster overall domestic buying power and demand — a key factor in job growth.
At the same time, the percent of federal tax coming from corporations has steadily declined from 27 percent in 1950 to 7 percent in 2006, and the effective tax rate for households with $1 million or more in annual income has been halved between 1945 and 2010.
Our financial problems are not due to worker rights and collective bargaining. They are grounded in the increasing corporatism through mergers that create “businesses too big to fail” and tax policies that are increasingly skewed to benefit the very wealthy.
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