Incomes getting more unequal, tied to anti-union efforts

Bill Knight column for Thursday, Friday or Saturday, July 27, 28 or 29

It’s been almost six years since the notion of income inequality became part of the national conversation, and recent evidence shows a correlation between that harmful phenomenon and the decades-long war on organized labor.

Income inequality had been discussed globally for some time. However, it wasn’t until Occupy Wall Street in September 2011 demonstrated throughout New York City’s financial district – and encamped at Zuccotti Park there for two months, protesting greed, the influence of corporations on public policy, and resulting income inequality – that Americans started talking about the powerful and prosperous 1% and the rest of us – the 99%.

Since then, studies have tied income inequality to the strength or weakness of unions, which helps explain why the well-to-do often attack labor.

Meanwhile, statistics on financial survival show that income inequality – which has manifested itself in “Fight for 15” campaigns since 2012 – is hurting millions of Americans.

Since 1957, when union membership peaked (representing 34.8 percent of all U.S. workers), overall income inequality has risen dramatically.

Today, the top 1% takes 25 percent of all pay and also owns about 40 percent of the nation’s wealth, according to economist and Columbia University professor Joseph Stiglitz, author of 2015’s “The Great Divide: Unequal Societies and What We Can Do About Them.”

True, other factors also occurred in the last 60 years. More and different skills increasingly have been demanded compared to decades ago, many requiring less-affordable college educations. Also, globalization tempted too many employers to exploit workers in low-wage countries, forcing U.S. workers to compete with virtual slave labor.

Nevertheless, there’s a clear correlation: The nation’s wealthiest gained enormously as union representation fell. Dierk Herzer of Helmut-Schmidt University in Hamburg, Germany, in Economic Development Quarterly last year wrote that “there is a negative long-run relationship between unionization and income inequality in the United States, and that causality is unidirectional from unionization to inequality.”

As unionization falls, inequality rises, he showed.

Besides deepening divisions in a relative sense, in the absolute, almost half the country is now at or near poverty. That’s according to the Census Bureau’s “Supplemental Poverty Measure,” which pegs it at 47.1 percent, or its “Selected Economic Characteristics” report, which totals households earning less than $50,000 at 46.6 percent. That’s 54.2 million Americans.

The poverty level, according to the U.S. Department of Health and Human Services, is $12,060 for an individual and $24,600 for a family of four.

Remembering that the U.S. minimum wage is $7.25 an hour and Illinois’ minimum wage is still $8.25 an hour (despite popular support for a wage hike), it’s not difficult to appreciate how difficult it is to achieve or remain in the middle class. That requires making a “living wage,” meaning wages needed to pay for the basics without public assistance and letting families deal with emergencies and plan ahead.

A “living wage” in Illinois is $17.57 – more than twice what a minimum-wage worker earns, according to the People’s Action Institute report “Waiting for the Payoff.” And it’s worse for working families. A household with two working adults with two kids needs an income of $22.78 per hour to make ends meet.

Workers must organize, and voters must demand that labor laws reflect the economic goals of a society aspiring to empower its citizens to be taxpayers, consumers and stable neighbors.

“When unions are strong, they can advocate for rules and regulations that help all workers,” wrote Alana Semuels in The Atlantic. “European countries also experienced waves of globalization and increased reliance on technology, but their workforce hasn’t seen the same declines in union membership or non-union wages.

“It could be hard to return to substantial wage growth, and greater income equality, without organized labor,” she added.

But the political party now most beholden to the 1%, the GOP, is also behind the worst anti-union efforts in decades. Such Right-Wing attacks not only divide the nation farther, but ultimately harm the country.

“I think Republicans need to take income inequality more seriously,” said social psychologist Jonathan Haidt, who teaches Ethical Leadership at New York University's Stern School of Business. It’s “not because I favor equality of outcomes. I do not. I think the Right is correct to stress merit and earned rewards, not handouts and forced equality. But I think what Republicans are blind to is that power corrupts.”

[PICTURED: economic Policy Institute chart, based on "Historical Statistics of the United States," unionstats.com, Piketty and Saez 2003 and "The World Top Incomes Database."]