Will unions revive the middle class?

I noticed a recent newspaper headline that stated: “As the U.S. consumer goes, so goes the U.S. economy.”

After citing the latest economic growth statistics, the story observed that a main reason for our most recent economic growth is the increase in workers’ disposable income.

I agree, but the headline statement needs to be tweaked a bit to make it more appropriate. I believe it should shout: “As the U.S. middle class grows, so grows the U.S. economy.”

Unfortunately, middle-class percentages have been declining while income inequality continues to mount since the advent of President Ronald Reagan’s failed “trickle-down economics” was initiated in the 1980s.

Today’s wage and economic situation is detailed quite thoroughly in an Aug. 28 report on Labor Unions and the U.S. Economy, issued by Laura Feiveson, the

U.S. Treasury’s Deputy Assistant Secretary for Microeconomics. Her report states:

“Over the last half century, middle-class households have experienced stagnating wages, rising income volatility … even as the economy as a whole has prospered.”

I perceive that statement as referring to corporate management making many billions of dollars in profits after healthy Reagan-era tax cuts. And then those high profits were well distributed to stockholders, CEOS and other management personnel while workers were shortchanged in receiving an appropriate share of the pie.

But that situation can only continue for so long before we face a recession and declining sales. It’s inevitable that as prices and living costs increase, while wages fail to keep pace, that workers’ percentage of disposable income declines. Then they have less money to purchase the products and services that our volume-sales-oriented capitalistic economy requires.

As a result, we’ve heard numerous warnings during the past couple years that we were heading toward a recession, which prompted some cuts in sales and services.

But two other recent factors have helped to avoid that predicted recession. One is the labor shortage and the other is successful union activities. Both have brought substantial increases in wages and workers’ disposable income.

It’s a lesson corporate management obviously has failed to learn from our history. When wages fail to keep pace with living costs, sales suffer. And when wages climb faster than living costs, sales soar.

That brings us back to the newspaper headline – pulled from the end of one sentence in the story, which said: “Consumption spending makes up twothirds of the U.S. economy on average, so as the U.S. consumer goes, so goes the U.S. economy.”

The U.S. Treasury report adds that a “Pro-union policy can make a real difference to middle-class households by raising their incomes, improving their work environments, and boosting their job satisfaction. In so doing, unions can help make the economy more equitable and robust.”

We must credit one of our nation’s best growth periods – the 1950s and ‘60s – to both the education effects of the GI Bill and strong union activities.

Union membership “peaked in the 1950s at one-third of the workforce,” when

“overall income inequality was close to its lowest level since its peak before the Great Depression,” the Treasury report noted. In subsequent decades, membership steadily declined while income equality began a long and steady increase.

Last year, union membership included 10% of workers while the top 1% of income earners received 20% of total income.

The decades of union membership decline resulted from changes in the labor force, years of unfavorable conservative political regimes, laws restricting union influence such as right-to-work laws, and tarnished union reputations including occasional reports of union corruption and excessive demands.

I recall when some of my friends during the 1970s were steelworkers who bragged about how much sleep they were able to get on the job. Their job descriptions were written so narrowly they provided for loafing at work.

The Treasury report, however, noted unions provide a positive effect on productivity, excellent health care and retirement benefits, workplace safety, high worker satisfaction and benefits for communities. It says union workers vote 12% more often than nonunion workers, and are more likely to donate to charities.

Unions also mandate explicit antidiscrimination measures and assist in promotions from within the workforce.

Meanwhile, union workers earn 20% more than other workers while helping to raise the wages of nonunion workers as their employers grant increases to remain competitive.

I grew up in a union household that was able to provide university educations for both my brother and me. So I have seen how their many benefits outweigh their occasional faults.

And the Treasury report summarizes that “public opinion in support of unions is at its highest in over 50 years.”

Darrell Berkheimer, a retired Grass

Valley journalist, filled editor positions in Pennsylvania, Utah, Georgia, Texas and

New Mexico during his 60 years of writing. He has nine books of essays available through Amazon Books. Contact him at mtmrnut@ yahoo.com.