The Politics of Labor
Often, CEOs get raises even when business performance slumps. Hourly workers get pink slips, and those still on the job work longer hours.
In 2004, Americans worked an average of 1,824 hours per year. The OECD average was 1,628 hours, from 1,357 in the Netherlands to 1,826 in New Zealand (a much more agrarian country than the US).
And how do we feel about this? According to Pew Research, compared to two or three decades ago, we believe we have less job security, more on-the-job stress, reduced retirement benefits, and reduced health coverage.
Poverty, Minimum Wage
And with the poverty line set at 50% of median, the US leads here, too, with 17% of the population compared with 14.3% in Australia and 5.4% in Finland.
Yet Congress remains bogged down on raising the minimum wage in the US. The real minimum wage (contrasted with nominal) has been on a fairly steady decline since the late '60s. Since its creation in 1938, 1997-2006 is the longest stretch with no adjustment in the federal level ($5.15/hour).
There is a perception that only teenagers make minimum wage. However, according to the Bureau of Labor Statistics, 59.8 percent of all wage and salary workers are paid an hourly wage. Of minimum wage workers, eight in 10 are 25 or older. Only 7% are teens aged 16-19. Of the four census regions, red states (the south and the mid-west) have the most minimum wage workers.
Over-the-top Rhetoric
High-ranking political leaders seem, by their rhetoric, to believe class war is a good re-election gambit. From the San Francisco Chronicle
U.S. Education Secretary Rod Paige labeled one "a terrorist organization." Former House Majority Leader Tom DeLay, R-Texas, called them "a clear and present danger to the security of the United States." And U.S. Rep. Charles Norwood, R-Ga., claimed they employ "tyranny that Americans are fighting and dying to defeat in Iraq and Afghanistan" and are thus "enemies of freedom and democracy," who show "why we still need the Second Amendment" to defend ourselves with firearms.
Who are these supposed threats to America? No, not Osama bin Laden followers, but labor unions made up of millions of workers -- janitors, teachers, firefighters, police officers, you name it.
Bashing organized labor is a Republican pathology, to the point where unions are referenced with terms reserved for military targets.
Why union-bashing? Unions "cost" business more money -- on average, union workers have better benefits and greater wages than non-union workers. And there appears to be a ripple effect, as well. "Princeton researchers found in industries that are 25 percent unionized, average nonunion workers get 7.5 percent more compensation specifically because of unionization's presence."
And even though the conventional wisdom is that we independent -- individualistic -- Americans eschew unions on principle ... data suggest otherwise. "A 2005 nationwide survey by respected pollster Peter Hart found 53 percent of nonunion workers -- that's more than 50 million people -- want to join a union, if given the choice."
Perhaps this disconnect -- worker concerns about job security, CEO compensation -- will become an issue in the fall elections. If it does, it's the GOP that will draw the short end of the stick.
Also, see Mixed Layoff News; GM Lands a Broadside, As Goes GM ..., Senate Hears Pension Plan Woes, Is There A US Pension Crisis?, Pension Protection Act of 2006
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The major union groups - ‘janitors, teachers, firefighters, police officers,’ and nurses… work for the government or health care organizations, and instead of CEOs, in many cases, it is ‘the public’ who end up bearing the increased costs (and possibly low quality due to the inflexible labor market), either through higher tax or health insurance premium. The war is quite often between the organized union vs. tax payers (or insurance bearers), rather than vs. a handful of CEOs.
So … by saying that there is a “war” for compensation in these fields … are you implying that teachers, firefighters and police are *overpaid*? If so, relative to what?
FWIW, there are other “private” fields with rates higher than the national average of 12.5 percent of workers belonging to a union:
– Transportation and utilities, 24.0 percent
– Information industries, 13.6
percent)
– Construction, 13.1 percent
– Manufacturing, 13.0 percent
What’s more interesting to me is that very high % of American workers who say that they would join a union if they could.
Kathy
Whether one is over or underpaid should be decided depending on each individual’s productivity. (= wage/productivity) When a worker A significantly underperforms than a worker B, it is natural for a firm/organization to try to replace A with someone else with higher productivity. The problem of a union is that it makes an organization hard to fire its workers, inducing many Bs’ to act like As’ (who would work hard if they can get same salary by working less…!). (And, again, even in cases of private firms, it is usually the ‘consumers’ who have to pay the price - e.g. more expensive public transportation or to build a house-, either due to the poor quality or the higher labor costs).
Given that one can be guaranteed for a job security, can work less, or can easily get higher wage by performing the same, who would not want to join a union…?!
Unions provide employees with counterveiling power … there are very few (if any) labor markets that are “free” in the Adam Smith definition of that word.
You didn’t answer my question … are you suggesting that teachers, police, firemen are overpaid? If so, relative to what? If not, what did you mean in your first post?
Kathy
Kathy,
We all know that that is a question to be dealt in the market+bargaining power between the labor and ‘employer’. What I was getting at in my first post is that since the tax payers nor insurance bearers are not as well organized, if not at all, they are inherently in a weak position when it comes to the ‘bargaining’. Worse, there is neither market nor competition that will provide some ‘guideline’ for the wages in case of ‘monopolized’ labor groups (= 100% unionized)). Therefore, if there is any ‘change’ (always upward) in the wage rate, it tends to be an outcome serving mostly the unionized labors, rather than tax payers or consumers. At the initial stage of the unionization, I believe that many part of the process was ‘towards’ balancing out the ‘inequalities’ and ‘injustice’ - but at certain point, we should be able to predict that the ‘balancing’ is certain to be tilted and begin to generate ‘inverse-injustice’, given the lack of organized voice from the tax payers/consumers. Whether we are already beginning discriminating the rights of the latter group or not is not an easy question to answer, but should be taken into consideration when we deal with issues like ‘wage war’. (we are not anymore living in Max-Lenin era, where the ‘fight’ was solely between the CEO vs. employees, and the power imbalnce was significantly skewed towards the employers) As for me, I would need to go, visit, observe, and talk to them, to see how they (as an individual) work, under what circumstances, with what ethic etc., at least once, to judge whether we are ‘over-paid’ or not. Unfortunately, I did not have such a chance, and it is hard to tell.
Plus, apart from all those things, you understand that what you are asking is a pretty ‘politicized’ rather than ‘economic’ questionm, given the ‘mythical/ideological power’ of those groups you mentioned: A simple tax payer would not ‘dare’ to say, ‘yes, firemen (teachers, or police) are overpaid’ (even if they are) when they know they are in a position of ‘national heros’ (so, certain to be hated by many - including those groups). He or she may find that paying $10-$20 or more a year is relatively easier or even ‘right’.
I really hope this is an opinion piece and not something offered to the public as fact.
Unions have raped America and everybody knows it. The general public is sick of it. Dunlop tire workers on strike because $19/hour isn’t enough, workers elsewhere get much less. Average GM employee, when benefits are tallied, gets $159k/year.
The worst part of unions is the intimidation and coercion they use against those who want to work and not be part of the union. This is fundamentally un-American. They have no problem beating up a scab if he threatens their payments on the bass boat.
Let’s not even get into government unions. These should simply be illegals. Look at the NYC transit strike a few years ago. Held the entire city hostage during Christmas, cost $800 million in lost business. Poor subway conductor, only makes 90k/year. These guys should have gone to jail for contract violations.
Ronald Reagan, may he rest in peace, did the right thing by firing the air traffic controllers and we need to continue the precedent.
Thanks for writing, UKA.
However, the article contains clearly cited facts, contrary to your opinion piece, which is long on explosive rhetoric and short on documentation of claims. Please write back and give us some cites for your claims.
I joined the firefighters union because every couple of years I get a new boss elected.
He or she wants to save money by cutting my pay ,pension ,benefits,equipment (but never his)
He wants to reinvent the wheel makes insane changes and then he is gone and we start over with someone new.
And you should try living on workmens comp after getting injured by a drunk at a car accident and fighting for your medical bills to be paid.
I dont find 62,000.00 a year after 26 years overpriced for my 56 hour work week.
.
If you dont like the FD guys making this much ,you can allways disband the Dept and try a volunteer department.
Or on your next emergency try calling you county commissioner..I am sure he will come quickly at 2 am.