Inequality Rising

July 11, 2014

The encampments are gone: young people no longer sleep in tents at Zuccotti Park near Wall Street or in the financial centers of other cities. But the impact of the Occupy Wall Street movement continues to be felt. Its participants performed a vital public service by making  Americans aware of how economic inequality has gotten worse in our country. The issue of inequality has now become a force in our politics and culture, and it’s fueling new forms of protest and fightback by members of the 99 percent, particularly the bottom 20 percent who work hard but are cruelly underpaid.

Shocking new statistics have emerged and gained national attention, illustrating how deep the economic divide has become between the very rich and the rest of us. In January we learned that the richest 85 people in the world have as much wealth as the bottom half of the world’s population. In the U.S. since 2009, the wealthiest one percent have received 95 percent of the economic growth in the “recovery” that came after the financial crisis, while the bottom 90 percent became poorer. Median compensation for CEOs in 2013 passed the $10 million for the first time. The median pay for CEOs of S&P 500 companies is $10.5 million, an increase of 8.8 percent from 2012. CEO pay now averages 331 times what the average worker earns. In 1950, that ratio was only 20 to 1.

Inequality has always been worse for workers of color, and that’s been true of the recent crisis. Since 2005 the median net worth of households dropped 58 percent for Latinos, 48 percent for Asians, 45 percent for African-Americans, and 21 percent for whites. Women have historically been paid less than men, and despite some progress still earn only 77 cents for every dollar paid to men. Of the millions of workers toiling in poverty at minimum wage, two-thirds are women.

We could go on for pages with statistics about how inequality has gotten worse. Some of those numbers are illustrated on page 7. But here are two more to think about: While inequality is getting worse in many countries, the U.S. now has the worst inequality of any wealthy country. And among all the 141 countries in the world, only three have worse economic inequality than the U.S.: Russia, Ukraine and Lebanon. 

Interest in the subject of economic inequality has grown to the point that suddenly one of the bestselling books in the U.S. is a dense 600-page work, Capital in the Twenty-First Century, in which French economist Thomas Picketty analyzes the reasons for increase of inequality under capitalism. Last year another big book on this subject, The Price of Inequality: How Today’s Divided Society Endangers Our Future, by Nobel Prize economist Joseph Stiglitz, was also a best seller.

Picketty, Stiglitz, Robert Reich and other economists concerned about increasing inequality cite a number of reasons for its growth, including non-productive Wall Street speculation becoming a bigger portion of our economy; profit growth exceeding economic growth; and the failure of governments to implement effective policies to prevent monopoly, equalize opportunity, and stimulate the economy for working people.

UNIONS DOWN, INEQUALITY UP

The worsening of inequality has a lot to do with the losses suffered by unions have a lot to do with inequality getting worse, especially in the U.S. but in other countries too.  Inequality in the U.S. was at its low point when unions were strongest, from the 1940s to the 1960s. The rate of unionization of the U.S. workforce has plummeted from a high of 35 percent in the 1950s to just 11.3 percent today. The drop has been most dramatic since the 1970s, a decade in which two relevant things happened: the beginning of  the “deindustrialization of America”, and the emergence of modern union-busting. Half of the U.S. manufacturing jobs that existed in 1970 are now gone. Many of those were jobs where workers had achieved a middle-income standard of living by bargaining through unions. Also since the ‘70s, the number of firms engaged in “union-avoidance consulting” has mushroomed, and they perfected the tactics of surveillance, disinformation, and high-pressure coercion that we see deployed today against virtually every effort by private sector workers to organize.

The weakening of the union movement occurred not only in manufacturing. In the same service sector industries in which low-wage workers are organizing today, unions were once much stronger. One of the labor’s heroic victories in the ‘30s was a 1937 sit-down strike in Detroit not in an auto plant, but by female workers at a big Woolworth’s Five and Dime store. Woolworth’s and other “five and dime” chains were the low-cost retail equivalent of today’s Walmart, Target and Costco. Workers in large urban department stores were often organized in the Retail Clerks Union. Unions in grocery chains were much stronger and grocery workers made decent wages.

In the 1930s organizing upsurge, the Hotel and Restaurant Employees Union (HRE, predecessor of today’s UNITE HERE) brought union wages and contract protection to thousands of restaurant workers, hotel workers and bartenders. In logistics, the trucking industry was much more organized before the past few decades of union busting took its toll, and many warehouse workers were organized by the Teamsters, Longshoremen and other unions.

THIS IS OUR MISSION

UE exists to fight against economic inequality, and it’s what we do every day through organizing, collective bargaining, community and political action. In the preamble of our constitution, our founding members pledged, in 1936, “to perpetuate our union and work concertedly with other labor organizations to bring about a higher standard of living for the workers.”

One of the top resolutions adopted by delegates to UE’s 73rd National Convention in 2013 calls for “A Just Economy for All” and what is needed to move in that direction. (You can read this and other UE policy resolutions at the UE website, ueunion.org, under the “About UE” tab at the top of the page.)

Addressing the problem of out-of-control requires raising the minimum wage; enacting a serious federal jobs program to put the unemployed to work; cracking down on Wall Street abuses; and reforming our taxes to make the rich and the corporations pay. A solution demands saving public education and making college education affordable, and to restore decent retirement security to all by increasing Social Security. And it demands that we actively support struggles by the lowest-paid workers, and all workers, for rights on the jobs and a living wage.

The most important anti-poverty and anti-inequality program our government could enact, and which we must fight for, is legislation allowing all workers to organize without interference, negotiate their wages and working conditions, and strike if needed to achieve justice. Until our country restores a measure of equality of power between workers and their employers, economic inequality will continue to get worse.

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